Monday December 16 12:25 PM EDT
Montgomery Analysts See Bright Outlook for Technology Stocks in 1997
SAN FRANCISCO--(BUSINESS WIRE)--Dec. 16, 1996--Montgomery Securities analysts who attended presentations by
more than 150 high technology companies last week at Montgomery's 14th Annual Technology Week conference concluded
that the technology sector is poised for a strong year in 1997.
The analysts made their comments last Thursday in the closing session of the conference, which featured presentations by
industry leaders such as Microsoft Corp., Intel Corp., Seagate Technology, Applied Materials and Cisco Systems. More than
500 institutional investors attended the conference.
Investors reacted favorably to the presentations, and companies attending saw their stocks fare well during the conference,
despite the downturn suffered by the technology sector in general last week. Among the 112 public companies making
presentations, 30 companies hit a new 52-week high during the conference. Some of the week's winners were SeaChange
International (up 31.8%); Open Text Corporation (up 29.9%); and Information Management Resources (up 22.6%).
Several Montgomery analysts shared their observations about the outlook for their specific industry segment after nearly a
week of presentations by the companies they follow.
In the software segment, analyst David Readerman predicted an extremely strong year in 1997, with a forecasted 35 percent
growth in earnings compared to 1996. Microsoft continues to see strong demand and should be a "core holding" in all
technology portfolios. Among Readerman's stock recommendations is Open Text Corp., which he identified as a corporate
repositioning story.
Semiconductor analyst Jon Joseph said that the "semiconductor inventory correction is over." He was particularly impressed
that Micron Technology, a leading maker of memory chips (which suffered an 80 percent price decline this year), is still
extremely optimistic for 1997. After hearing the company's presentation, Joseph raised his rating on Micron Technology to a
"BUY." He also recommended Integrated Device Technology, which has experienced a 30 percent increase in sequential
quarterly orders.
Wireless communications analyst Matt Robison made several stock recommendations following the company presentations,
including DSP Communications, Proxim, Illinois Superconductor and Stanford Telecommunications.
Enterprise software analyst Bob Austrian reminded attendees that this is the "dawn of the enterprise software era." Austrian
noted that the size of the industry remains relatively small compared to the opportunity to assist corporations with the
development and implementation of software that can be used throughout their organizations. Austrian has calculated that the
combined sales force of the entire enterprise software industry is still only 300 people, suggesting that there is substantial room
for growth in the coming years.
Austrian suggested that investors look at Aspen Technology, Siebel Systems, Remedy Corporation, Scopus Technology, and
Restrac.
Semiconductor manufacturing equipment analyst Brett Hodess noted that after a major slowdown in orders for new
manufacturing equipment, "we are nearing an order bottom." Hodess reported that industry leader Applied Materials told
investors at the conference that its orders are expected to be up 5 to 10 percent in its current quarter compared to the
previous quarter. Hodess observed that semiconductor manufacturing equipment stocks are down about 40 percent from their
52-week highs, offering investors a buying opportunity now, before there is a more demonstrable upswing in new orders.
Among Hodess's stock recommendations are GaSonics, Altera and Actel.
Jeffrey Lin, data storage analyst, said that "the demand for data storage remains insatiable." Companies poised to benefit from
this ongoing trend include Seagate Technology, Quantum, Western Digital, Smartflex Systems, SCI Systems and Sanmina
Corp.
Montgomery Securities is one of the nation's premier investment banking and institutional brokerage firms. Dedicated to
growth companies, Montgomery combines focus and specialization in Research and Investment Banking with bulge-bracket
capabilities in Global Distribution and Large-Block Trading. |
