Texas Instruments - Good buy now or should we wait? Message Board

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Technology Stocks : Texas Instruments - Good buy now or should we wait?

TXN 168.27

+1.8%

Nov 28 9:30 AM EST

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To: Angela who wrote (2827)	1/16/1998 12:42:00 AM
From: DJBEINO	Read Replies (1) of 6180

GARZARELLI'S NO. 1 SECTOR: CHIPS (smartmoney) ÿ SEMICONDUCTORS are suffering through a terrible stretch thanks to Asia: The Dow Jones Semiconductor Index is down 23% over the last six months, and the sector's well-publicized problems are keeping investors away in droves. If you're Elaine Garzarelli, it couldn't be a better time to buy into the bad semiconductor news. In her latest January report, the SMI No. 6-ranked pundit says semiconductor stocks offer investors the most potential (95.3%) for out-performance versus the S&P 500 index. That percentage is far higher than her second-most attractive sector, homebuilding stocks, which she believes only have a 69.3% potential for out-performance. "We probably have much lower S&P earnings expectations than most other analysts," says Garzarelli Capital's senior analyst, Alida Melknian, who notes that her research firm is predicting that S&P 500 profits will decline 1.5% in 1998, down from an 8% increase in 1997. Melknian says that they only see semiconductor earnings being "flat" in 1998, but that's better than the average S&P sector. We used Garzarelli's sector analysis to choose the 10 stocks in our "Where to Invest in 1998" portfolio, focusing our research on five of her favorite sectors, including semiconductors. Garzarelli's favorite picks are Intel (INTC) and Texas Instruments (TXN) because she doesn't think the Asian influence will be as bad as people say. "The key for us is that the final demand for these memory chips is mostly in Europe and the U.S." What about all those worries about memory chips? "They are already factored into the price," says Melknian. "This sector just recently hit bottom, and now we expect the sector to out-perform in 1998."

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