From Personal Finance, by Stephen Leeb:
<<Technology's onslaught is drawing to a close. That means big profits for some, and ruination for others.........The driving force in the computer technology arena has been the PC. Currently there are about 200 million PCs worldwide. Over the next five years continued growth in the Western world plus rapid growth in the developing world should raise the number close to a billion...The Wintel duo and a few others will be the beneficiaries of the inevitable slowdown in technological progress.....Ironically, the broadening market for PCs is temporarily hindering PC and chip makers.
As PC prices go lower, manufacturers are sharply reducing inventories to control costs.....Compaq and Intel are the best examples. Both will have disappointing first quarters. Over the next five years, however, both companies will ride the wave of PC growth and should grow revenues about 20 percent annually - a rate that easily justifies the current valuations of these companies.....For Intel, which controls and will continue to control about 85 percent of the microprocessor market, long-term prospects are better than for Compaq, which faces more long-term competition. Still, Compaq is a contender. The company's marketing prowess is evidenced by a six-fold increase in revenues over the last five years. Only Dell has comparable numbers. But Compaq has higher operating margins, greater financial flexibility, and thanks to the recent acquisition of Digital Equipment, a much broader product line, as well as a top-notch service business. There's also a hidden jewel in the Digital acquisition: DEC owns one of the internet's most highly prized search engines, AltaVista. Compaq also trades at much lower valuations than Dell.>>
There is a chart of five "High Tech Honchos" that are recommended for purchase as technology growth slows: America Online, Cisco, Compaq, Intel, and Microsoft.
Robbie |
