Come On Board> WSJ,
May 27, 1999
Dow Jones Newswires
DJ TIP SHEET:Prudential's Sconyers Likes
Tech, Telcom Stks
By SHAWN YOUNG
NEW YORK -- Max Sconyers, a senior manager for the Prudential Quantum
portfolio, is using stocks like America Online Inc. (AOL) and Lucent Technologies
Inc. (LU) to leaven the performance of his value-oriented small-cap and mid-size
holdings.
The portfolio isn't a mutual fund, rather an investment vehicle for clients who can
invest at least $100,000 each. It currently manages about $500 million.
"Last July through October, we got slaughtered," Sconyers says. "It was our worst
quarter in 17 years." But now, with the help of some of the market darlings, the
portfolio is up.
On Tuesday, as the market sank, the portfolio was up about 5.5% for the year,
compared to about 7% for the S&P 500.
Sconyers says he expects to see the Dow Jones Industrial Average hit 40000 by
2008.
"We've barely tapped the income of the baby boomers," he says.
Within that overall progress, though, "sectors cycle, strategies cycle," Sconyers
says.
Right now, Sconyers' top sector picks are technology, telecommunications,
finance, some foreign stocks, pharmaceuticals and health care, except for the
HMO's.
"The fact that I'm holding Lucent is probably my biggest statement about
technology and telecommunications," Sconyers says. "Technology in my opinion is
going to continue to keep the U.S. the most productive economy in the world," he
says.
His other picks or holdings in technology and telecommunications include MCI
WorldCom Inc., (WCOM), Qualcomm Inc. (QCOM), Nextel Communications
Inc. (NXTL), Telefonos de Mexico SA (TMX), Sprint Corp. (FON) and AT&T
Corp. (T).
The sectors he is generally avoiding include futures, commodities and car-makers.
Although he holds AOL, he is wary of some other Internet stocks.
"I am not a believer in the seduction of these Internet portals like Lycos Inc.
(LCOS), Yahoo! Inc. (YHOO) and Mindspring Enterprises Inc. (MSPG)," he
says. "I'm just not sure they deserve the multiple. It's 100% theory."
And he doesn't chase companies rumored to be takeover targets.
"I don't look for them," he says. "I've been burned more than I've been blessed
looking for the next deal."
At the moment, his shopping list includes Citigroup Inc. (C), Electronics For
Imaging Inc. (EFII), Navistar International Corp. (NAV) and Qualcomm. His
other holdings include Alaska Air Group Inc. (ALK), Maytag Corp. (MYG),
Gulfstream Aerospace Corp. (GAC), Reynolds & Reynolds Co. (REY), USG
Corp. (USG) and Best Buy Co. (BBY).
Best Buy, an electronics retail chain undergoing a turnaround, is the holding he
says he worries most about. For the moment, though, he says he'll hang on.
"Every time I go to one of their stores, it's packed," he says." He has visited about
10 stores so far.
Another thing that worries Sconyers is the bull market's effect on investor
expectations.
"People believe - they believe - they're going to get a 30% return," he says. "That
scares the popcorn out of me."
- By Shawn Young; 201-938-5248 shawn.young@cor.dowjones.com
Briefing Book for: ALK | AOL | ARC | BBY | C | DJDAY | E.CGT | E.TMA | EFII | FON |
GAC | LCOS | LU | MSPG | MYG | NAV | NXTL | QCOM | REY | T | TFONY | TMX |
VRI | WCOM | YHOO |
