OK AS - here is my value response as promised:
First on VZ - As I noted - it does have a few things going for it - but it has more going against it IMO. You mention LD - it has filed and has been actively fighting to sell LD in Pennsylvania - so I would say they are more than just thinking about it. And I would not get too excited over their wireless - every wireless company out there has been warning or disappointing. The demand isn't as great as anticapated. personally, of the 2 - I would rather gamble on WCOM instead of VZ.
You asked about ERICY, NT, COMS. I would pass on all 3. ERICY because of the wireless demand issues. All 3 of them because of the problems newer Telcos are having raising funds, etc. in this market. Without those funds, they can't rapidly build out their networks - so the companies that provide them get hurt. I used to be a big NT fan - but to me it looks like they have lots of problems. If you want value in the optical sector - I would buy GLW. If you want speculative, I would gamble a little on a CORV and AVCI. The one thing intriguing about COMS is they are indeed selling now for less than cash on the books. But I suspect their business is down with everyone else - and they may be eating into that. I guess downside risk on it is low if you have a long time perspective - but not sure what the near term upside catalyst would be.
Now - you asked, what value picks do I like? Well - first off let me issue the caveat that this is a dangerous market - and as such, I would be cautious in establishing new positions. A lot also depends on ones time perspective. If you are talking from a longer term perspective - and you are willing to scale into purchases - then these are the areas I see potential value in:
Select Semi's: I think the semi's will be the first to turn in the market. they actually have been fairly strong by comparison as of late. I would go with a basket approach - and the ones I like include IDTI, SSTI, SNDK, AMD, ATML, LSI, TQNT. Take a look at their forward p/e levels (although that is still a bit touchy as those estimates can come down) versus historical p/e levels. The majority of them are trading at historically low levels. Their still could be bad news ahead for them - so my caveat applies.
Other Tech: GLW, SAWS, IRF, perhaps AAPL. GLW as I noted above is perhaps the one value in the optical sector right now. Even with reduced demand, it still sells at a compelling forward p/e today. SAWS has been hammered with the wireless sector and also a bit misunderstood with respect to some of their prodcut competition. They are selling at valuation levels less than half of normal based on TTM and Forward p/e (even after their warning). IRF - I added a couple weeks ago at $32 - its now $37+. Ideally you could get it on a pullback - but it has held up very well in the midst of the recent market. They are growing, have been beating estimates all along - and say they are comfortable with estimates going forward. If - and in this environment, I stress IF they don't disappoint - they are pretty undervalued going forward. AAPL - I don't know - I think it is still a bit early for the boxmakers, and I never really liked AAPL. but they do have thier disciples out there, and Dan Niles who has been bearish was out today speaking positively on the boxmakers - so it might be worth a little risk if you want a foot in that sector given their nice looking balance sheet.
Others: I know many think the finacials may have run up, etc. And that after the drubbing on the DOW lately, cyclicals may not be in favor - but here are a few value's IMO based on continued fed cutting: BAC, MWD. BAC is trading at a historically low p/e ratio, has new managment at the top who should correct many of the past problems, and has an attractive 4.1% dividend yield while you wait for the fed cuts to take effect. MWD is also trading at historically low valuation levels - and the brokers will also benefit from continued fed cuts. I also like AA and IP as fed cutting plays - but not sure I would call them value stocks.
no remember my caveat on the market - and what your time perspective is. But if I had a gun to my head and had to buy a bunch of stocks I consider values - these would be it.
One last thing - one of the better value managers in the game (check his funds record) Bob Olstein also agrees with me on the semi's. He has a few I like and a few different ones:
thestreet.com
So there you have it - hope I answered your question |
