Dain Rauscher's Toomey Picks NW Stks
By PAULA L. STEPANKOWSKY WSJ NW Edition
LONGVIEW, Wash. -- A company that makes data storage products and one that makes flat panel displays top the list of Pacific Northwest stocks recommended by Robert Toomey, a Seattle-based managing director for Dain Rauscher Wessels.
Toomey, an analyst who has long covered Northwest stocks, said that overall, the stocks of companies headquartered in the region have fared as well, if not somewhat better, during recent market turmoil than those of companies based in other parts of the country.
"We have seen a real resurgence in a lot of the tech names in the last month or so," he said. "Some of the more established companies that we follow tend to be holding up very well."
Three of the top five stocks he's recommending now are high-tech. They are Advanced Digital Information Corp. (ADIC), InFocus Systems Inc. (INFS) and Tektronix Inc. (TEK). The two others are older companies that are value plays, Albertson's Inc. (ABS) and Esterline Technologies Corp. (ESL).
Toomey said shares of Redmond, Wash.-based Advanced Digital are down about 35% since the beginning of the year after a sell-off in computer data tape storage stocks. The stock reached a high of 50 1/2 on March 1 before plunging along with other data storage stocks later in March.
"The decline in valuation is overdone and the stock is down in the mid-teens, making it very attractive," Toomey said.
He said he likes the stock because demand for data storage is growing at a rapid pace, and "that's benefiting companies that can deliver creative and cost-effective solutions to data storage issues. We think ADIC is positioned to do that."
He said the company's new Scaler100 product is doing extremely well and a new product, StorNext, set to be introduced at the end of the third quarter, also looks like a winner.
Advanced Digital stock was trading recently at 16 3/4, down 3/4 from Friday's close. Toomey said he has a 12-month price target of $32 and estimates the company will earn 55 cents a share in 2000 and 65 cents a share in 2001.
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