El: Another CPQ "mention" in Barrons :
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March 15, 1999
Winning Formula
Neutral on sectors, selective on individual stocks
By BARRY HENDERSON
Bob Turner ..... his investment approach is based on the concept that, to beat a benchmark, a portfolio has to resemble the benchmark...........
Top 10 Holdings
A big slug of his prime holdings are tech issues. And although he's bullish on technology, he admits that the first quarter has been somewhat confusing. With the recent blowups in Dell and Compaq and general nervousness about whether Intel will make its numbers, he's a bit skittish. Nevertheless, he's still been buying more shares of his favorites in recent weeks.
One is Cisco, because of its earnings visibility. (In Wall Street-speak, that means Cisco has a good order backlog and should have good profits.) He thinks that it's worth paying up to 55 times next year's earnings -- Cisco's recent multiple -- if you can bank on those earnings. He also likes the company's competitive position. With relatively few rivals making the electronic routers and switches that are its bread and butter, Cisco enjoys rare pricing power.
For the same reason, he's high on EMC, a data-storage outfit. "They just don't have much competition, and they're in a rapidly growing market that's going to expand even faster because of the Internet," he says.
As his firm's tech expert, he's doing some soul-searching about Intel, which accounts for about 3.5% of both the fund's benchmark index and its portfolio. A big fear on Wall Street last week was that the semiconductor giant's quarterly earnings, which will soon be reported, might be disappointing. Turner is clearly worried, but not convinced that he should pull back. "If I sell it, that means that, in effect, I'm shorting the index. I'm going to wait for the company to announce quarterly results," he comments, adding hopefully: "I think if there were a disappointment, they would have already pre-announced. That's what they've done in the past."
In addition to technology -- which makes up 29.75% of the fund -- Turner also has a big stake in drug stocks............... |
