Collins puts NOVL on buy list
Collins Sees Blue Skies Ahead (NOVL) Thursday, February 18, 1999
Legendary growth stock investor Jim Collins' model
portfolios saw double-digit gains in each of the past three
months, and he sees "plenty of indications that there will
be more gains to come." These include the strong
economy (GDP at 5.6% for Q4 98), inflation at a 40-year
bottom, and the lowest unemployment rate in a generation
boosting consumer confidence. He expects the economy will
grow "faster in the first quarter than most economists
anticipate," and that will create strong earnings for
corporate America.
But Collins sees some clouds in the blue sky. For instance,
he says most of his recommended stocks are "fairly to
slightly overvalued." He cautions that the market will
need a rest (read: correction) after three months of
14%+ returns, a rate that the average small stock returns
in a year. And though Collins says the worst may be over
in Asia, he believes investors underestimate the threat
in Brazil. "It seems the government giveth, and giveth
too much in the way of pensions, and cannot take it back,"
he says.
"What should you do as an investor?" he asks. "Do not panic
if any of the above causes a decline in (my recommended)
stocks. Treat it as a buying opportunity." Collins goes on
to list his 12 favorite stocks for current purchase; the
list includes Novell (NOVL), MCI Worldcom (WCOM), Sepracor
(SEPR) and Sun Microsystems (SUNW).
For more on Jim Collins' recommendation see "Investment
Outlook & Strategy," February 1999, OTC Insight. Jim Collins
focuses on the inefficiently priced OTC market using
analytical techniques to select stocks and create
portfolios.
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