This is a strong BUY recommendation for COMPAQ from Gruntal being e-mailed out today to all Multex Investor clients:
Analyst Corner Q & A
Gruntal & Co.'s Peter Green
Peter Green
Bullish on energy, healthcare, and technology
This winter, we are bullish on the energy, healthcare, and technology sectors. Each stock listed below is followed by its ticker symbol, its closing price on November 18, 1999, and its upside price objective or objectives.
In the energy sector, we like Royal Dutch Petroleum (RD, $65-$74); Exxon (XON, $80.06-$86); Schlumberger (SLB, $66.68-$78); Apache Corp. (APA, $43.19-$53); and Burlington Resources (BR, $38.31-$53).
In the healthcare sector, our picks are Andrx Corp. (ADRX, $52.19-$75); Pfizer (PFE, $33.81-$58); and Watson Pharmaceuticals (WPI, $37.88-$45).
In technology, our current choices are Compaq (CPQ, $25.13-$29, $39); International Business Machines (IBM, $98-$104, $114); Intel (INTC, $78.50-$102); Micron Technology (MU, $69.50-$90); and Seagate Technology (SEG, $37.13-$46).
E-Mail: Daps@driveninc.net
Name: Dave Petkov
Recently, you accurately predicted NT, ORCL, WCOM, SEG and TLAB (to name a few). If you had to pick one stock that you liked the most right now, which one would it be?
Peter Green: I would pick two rather than one. From a technical point of view, we like Dell Computer and, among the pharmas, Elan Corporation, PLC. Our upside price objectives for Dell are $49 and $53. Our upside price objectives for Elan are $31, $35 and $47.
Name: Everett R. Gibbs
Which sector is the expected leader in growth in technology stocks?
Peter Green: We expect communications equipment to be the technology growth leader because of infrastructure growth in China, Europe, Latin America and the United States.
E-Mail: jroboz@sprint.ca
Name: Joseph Roboz
I have ridden Compaq up and down several times in the past 26 months. Given its poor earnings during that time and the fact that it doesn't seem know what its business model should be -- it tries to use the retail model, the two-tier channel model, the direct-to-order model, and these models create conflict and destroy brand loyalty among resellers -- how is the company going to move its business back to making money? Why do you think it is a buy now?
Peter Green: Compaq traded 169 million shares last week and was up over two points. The stock is under strong accumulation, and our upside price objectives are $29, $33 and $44.
E-Mail: RLaw829273@aol.com
Name: Rex Law
Why do you like CPQ? Do you see any downside in the near future?
Peter Green: Please see the previous question and my answer. The stock's downside price objective is $24.
E-Mail: sfca2345@aol.com
Name: John
I would like to know if you would buy Pfizer at its current price. What might the anticipated high be this coming year?
Peter Green: I would recommend buying Pfizer shares if you have a long-term horizon. Our upside price objective for the stock is $58.
E-Mail: grace8238@ aol.com
Name: Jerry Ritch
In 2002, Pfizer will launch its inhaled insulin product, which will be a huge convenience for insulin users. Where do you see the stock price?
Peter Green: As I said before, the PFE share price could move to $58 long term, but this price objective has nothing to do with any specific products.
Name: Scott Brooks
In your tech picks, I am curious about why you recommended the stocks you did, particularly CPQ (since I own it). For the long term, the company has to compete with DELL, GTW, HWP, etc., in what appears to be an increasingly commoditized market. Your target assumes a 50 percent rise in share price from its current levels. What would drive a price rise of this magnitude?
Peter Green: We like CPQ in 2000 based upon the strong accumulation taking place right now.
Name: Tom Carey
At what price would you buy IBM; at what price would you sell it? It is down to $103 today (at 10:00 a.m.).
Peter Green: I would buy IBM shares at $98 and sell them at $108.
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