TIP SHEET: Oak Ridge Pres Brings Cool Head To Tech Stks
January 3, 2000 Dow Jones Newswires
By SCOTT EDEN
NEW YORK -- David Klaskin, president of the Chicago money-management firm Oak Ridge Investments, missed out on last year's high-tech stock boom.
Waiting in vain for their lofty prices to correct on what he believed would be rampant Y2K-phobia in the third quarter, Klaskin was underweighted in technology shares until late October. He finally hiked his firm's tech holdings to a percentage equal to that of the Standard & Poor's 500, after realizing investors were by and large ignoring all the millennial hoopla.
Oak Ridge - a $425 million group of funds that invests mostly in shares of smaller companies - rose about 14% in 1999, Klaskin said. Compare that to the tech-laden Nasdaq Composite Index, which gained a whopping 80%, or the S&P, up 18%.
Still, Klaskin has partially made up for lost time, snapping up a few technology favorites this past autumn. And because he believes a high-tech "shakeout" will occur sometime in the first half of this year, he has brought to his stock picking a possibly healthy dose of cool-headedness - not a quality for which today's markets are particularly noted.
For starters, Klaskin likes In Focus Systems Inc. (INFS), a Wilsonville, Ore., company that makes liquid crystal display panels for video projectors. In late September Klaskin bought a little more than 200,000 shares of In Focus at about 21 1/2, and thinks the company could "blow numbers away and attract attention from the Street" when it reports financial results this year.
In Focus stock was up a hefty 158% in 1999, and currently trades at about 22 3/4 - or about 20 times projected earnings of $1.15 a share for 2000. But Klaskin said the company could report a bottom line as high as $1.30 a share this year, making for favorable upside potential on the stock.
Another favorite pick, Coherent Inc. (COHR), rose 121.6% in 1999, and now trades around 25 3/4. Klaskin has owned the stock for about 6 years, and added to his position "a few weeks ago" at about 19, just before its most recent spike.
"They're not a high-flier. Their earnings won't triple," he admitted. But largely ignored by investors is Coherent's lucrative industrial-lasers business. Known mostly for the lasers it builds for surgical purposes, Coherent, of Santa Clara, Calif., could see further stock gains if investors come to understand its business better, according to Klaskin.
Elsewhere, Comdisco Inc. (CDO) stock ranks among Klaskin's top long-term holdings, even though the company is "probably vulnerable to a pullback" over the short term. Up 130% in 1999, shares of the Rosemont, Ill., startup incubator, changed hands recently at 35 3/4.
The chief reason for Klaskin's Comdisco bullishness: Prism Communications, an Internet services provider that Comdisco could spin off early this year. "Prism is probably worth $10 more a share" on top of Comdisco's current trading price, Klaskin noted.
Finally, there's Zebra Technologies Corp. (ZBRA), Vernon Hills, Ill., a company that makes the device that sticks those bar code strips on merchandise.
At 56, the company's stock doubled in value in 1999, and trades at about 21 times projected earnings for 2000. According to Klaskin, however, it's also trading in line with its growth rate - about 20% a year - which represents, compared with other tech companies, a decent value.
That points to another reasons to own the stock, Klaskin said. Because of its inexpensive stock price, "I think going forward they might be a buyout candidate."
-Scott Eden, Dow Jones Newswires, 201-938-5253 |
