EDDIE ---Dow Jones Newswires -- May 14, 1998
Loomis Sayles' Schettewi Bullish On Selected Tech Stocks
NEW YORK (Dow Jones)--Philip Schettewi, managing partner of Loomis Sayles & Co., recommends that investors carefully pick and choose their technology investments.
In a CNBC interview Thursday, Schettewi said Hewlett-Packard Co. (HWP), which warned late Wednesday that its fiscal second-quarter earnings will be considerably below Wall Street expectations, would be an attractive stock in the low 70s.
Hewlett-Packard was recently at about 71 in premarket trading. It closed Wednesday at 81 5/8.
"You want to buy technology on bad days," Schettewi said.
However, he prefers Compaq Computer Corp. (CPQ) and Gateway 2000 Inc. (GTW), the latter of which is experiencing an inventory correction.
Gateway went through a similar correction in the third quarter of 1997, and its stock has climbed to the mid-50s from the mid-20s since that time.
Calling most Internet stocks "very extended," Schettewi said he is playing that sector by looking at satellite-based systems. He believes satellite companies, particularly Loral Space & Communication Ltd. (LOR), will be the Internet service providers of the future as data transmission speed becomes more important.
Concerning year 2000 stocks, Schettewi feels the millennium problem is serious in the near term, but he finds the long-term prospects of such companies questionable.
"The thing about the year 2000 problem ... is that it is really a specific item that's going to happen at a specific point of time, and once we move past the year 2000, what are these companies going to do?" he asked.
Schettewi's top technology picks, other than Loral Space, Gateway and Compaq, include Texas Instruments Inc. (TXN) and Sun Microsystems Inc. (SUNW).
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