Ten Safe-Harbor Stocks, As Selected By Fortune Magazine - Report
Newstraders - December 01, 1998 11:59
(NewsTraders.com)-- When looking for blue chip stocks that can handle any economic condition while sustaining top- and bottom-line growth, investors might consider examining Fortune Magazine's "Ten Safe-Harbor Stocks," which appears in the firm's December 21 issue.
Below is a list of the companies, with a few comments from Fortune and the analysts interviewed for the story:
- Pfizer (PFE) -- This drug giant has been in the news this year primarily for its hit impotence wonder drug Viagra, however, the company has numerous potential hits in the pipeline. "I don't think there's much doubt that Pfizer is the best company in the industry," said J.P. Morgan analyst Carl Seiden. He thinks the stock could jump 25% from a recent price of $111.
- Pharmacia Upjohn (PNU) -- CEO Fred Hassan's efforts to streamline the company's vast bureaucracy and the installation of a new management team has received respect from Wall Street. Michael Kagan, manager of the $1.7 billion Salomon Brothers Fund that owns $25 million of PNU, says the company's P/E multiple 10% below that of the typical drug company, while earnings are predicted to rise 14% in 1999.
- American Home Products (AHP) -- Despite its plans to merge with Monsanto were derailed in October, the company is still a long-term pick, especially since it's cheaper than other drug companies. Next few quarters could be tricky as it tries to recoup from the broken merger, but it has a bunch of potential drug hits in the works.
- MCI WorldCom (WCOM) -- Following the union with MCI, this company now has the world's largest Internet-services business. The company is also the nation's second largest long-distance carrier, and has its fingers in virtually every aspect of the telecommunications business. "There are few, if any companies anywhere in the SP that are as large as WCOM, that have WCOM's growth potential -- and more importantly, that have the visibility that WCOM has for continued top-line growth…This company remains the must-own large-cap growth stock for anyone's portfolio," says Salomon Smith Barney telecom guru Jack Grubman.
- BellSouth (BLS) -- Company has the fastest revenue growth of any of the Baby Bells and has a commanding presence in one of the nation's fastest growing regions. "We see this stock in the $95 to $100 range in about 12 months, a 20% gain," says BT Alex Brown analyst Kevin Moore.
- Microsoft (MSFT) -- Software giant continues to dominate the industry and should maintain its steady growth through its Windows NT product. "The market is open from 9:30 a.m. to 4 p.m., five days a week. Anytime during those hours is a good opportunity to buy Microsoft," says Lehman Brothers software analyst Mike Stanek.
- Lucent Technologies (LU) -- Company should maintain its leadership role as the $200 billion market for telecommunications equipment should grow by 12% to 14% annually. The recent deregulation of the telecom market in Europe should increase the demand for Lucent's products.
- First Union (FTU) -- North Carolina-based banking giant should see its profits jump by more than 15% in fiscal 1999. Company is ahead of its peers in pleasing Wall Street by creating an integrated banking giant. Sanford Bernstein analyst Moshe Orenbuch predicts First Union's stock could hit $80 within 12 months.
- Bank One (ONE) -- Company dominates the Midwest, with retail operations in 14 states. Orenbuch forecasts Bank One could jump to $70 within a year.
- Wal-Mart (WMT) -- "There are some companies that are good at certain segments of retailing, but there's no one that does it as well across the board as Wal-Mart," says A.G. Edwards analyst Don Spindel. In addition to being a retailing powerhouse, the company is also becoming a formidable force in the $400 billion market for groceries. Spindel predicts the stock could trade around $90 by the end of 1999.
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