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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: IQBAL LATIF who wrote (29836)	11/26/1999 5:47:00 AM
From: IQBAL LATIF	Respond to of 50167

Pat Dorsey has a point on some of these beaten down stocks.. Toys look good to me even MO.. <<The biggest loser so far has been high-tech consultancy Gartner Group IT, which I wrote about in late August just before the stock fell off a cliff. (D'oh!) I'll plead mea culpa to being too early on this one, although I'm not ready to throw in the towel just yet. Gartner's growth has slowed because the company is too good at what it does--providing research and consulting on technology trends. It has essentially saturated the market. Moreover, Gartner missed the Internet boat big time, allowing upstarts like Forrester FORR and Jupiter JPTR to take the lead in the fast-growing market for e-business research and consulting. The good news is that Gartner has realized its error and is investing aggressively in its Internet business. The stock trades at only about 14 times next year's earnings. I may live to regret this, but I think the stock's still worth a look for bottom-fishers. After all, if you liked it at $20, you should love it at $12, right? (I sure hope so.) Philip Morris MO has been another dog and is down about 30% since I wrote about it in February. This is another one I'm not ready to give up on. It's just too darn cheap: $6 billion in annual free cash flow and another $6 billion in cash on the balance sheet will pay a lot of legal settlements. The company's food and international tobacco businesses are still doing well. Also, longtime Fidelity manager George Vanderheiden picked up about 1 million shares of Philip Morris between March and September, according to a recent SEC filing. Since Vanderheiden's Destiny FDESX and Advisor Growth Opportunity FAGOX funds have beaten the S&P 500 over the past 10 years, I figure he probably knows a thing or two. The one other loser I'll mention before moving on to the stocks that have actually gone up is Toys 'R' Us TOY, for which I will continue to unequivocally pound the table. The stock is cheap, the bricks-and-mortar business is turning around as the redesigned stores are driving high same-store sales increases, and the new toysrus.com Web site is starting to give eToys ETYS a run for its money. I'd back up the truck on this one. On to the winners. JDS Uniphase JDSU, Siebel Systems SEBL, Nortel NT, and Nokia NOK have all more than doubled since I wrote about them, and although none are nearly as compelling from a valuation standpoint, they're all still strong companies with businesses that are firing on all cylinders. I'd be pretty wary of putting any new money into JDS Uniphase or Siebel right now. JDS Uniphase is trading at 200 times next year's earnings, and Siebel trades at an only slightly less-astronomical 100 times forward earnings. Nortel and Nokia might still be worth a look for investors willing to stomach some pretty high valuation risk. I think they're both still worth their admittedly high prices. EMC EMC is another company I'd maintain is still worth the price. The stock isn't cheap by any means, and the recent merger with Data General could potentially cause a hiccup over the next couple of quarters, but EMC remains king of the hill in the burgeoning data-storage market. Keep an eye on the competitive landscape, however, since both IBM IBM and Hewlett-Packard HWP desperately want a bigger chunk of the high-end data-storage market. Also, Sun Microsystems SUNW has recently released an initial version of some promising storage-management software. EMC is ahead of the pack for now, but the competition is formidable. I'll finish up with some of the more speculative stocks: Aware AWRE, Global Crossing GBLX, and Globalstar GSTRF. After a gut-wrenching plunge down to about $20 or so, Aware has recovered to about the same level as when I originally wrote about it, on the back of a promising licensing deal with Intel INTC. The story on Aware is basically the same--a very high-risk way to play the fast-growing market for DSL access. Since this stock will be worth either $3 or $300 in a few years' time, it's not one for the faint of heart. Global Crossing has done nicely, and I think the company still has a very bright future as a bandwidth baron. The recent runup has more to do with telecom-takeover mania than anything else, however, so I'm a good deal less enthusiastic about the stock's valuation. Globalstar is another story. The stock is trading at about the same level as when I wrote about it in July. Recent satellite launches have been successful, and everything looks pretty much on track. Although there are still some uncertainties surrounding just how high the demand for Globalstar's phone will actually be when the service is rolled out some time next year, I think this company's about as worthwhile a speculation as you're likely to find. >>