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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Proton who wrote (18174)	1/7/2000 12:01:00 AM
From: Rande Is	Read Replies (3) \| Respond to of 57584

Tech Managers Eye Their Favorites Jan 06, 2000 Associate Editor: Len Hollie (1/6/00) Technology has been under siege so far this year. The technology laden NASDAQ composite on Tuesday dropped a record 229 points, shedding 5.55% of its value. By Wednesday, the NASDAQ was still suffering and ended down another 23 points. But doesn't that beg the question: ‘Isn't this a buying opportunity?' Well, yes and no. Many of the highest-flying tech names are still richly valued, but several mutual fund portfolio managers say some tech names have become more attractive. But first, we have some explaining to do. “The correction we're seeing so far in the technology sector is strictly a valuation one, and not a fundamental correction,” says Mark Herskovitz, portfolio manager of the $1.7 billion Dreyfus Premier Technology Growth Fund (NASDAQ:DTGRX - news) , which is weighted 81.3% in technology stocks. “We're seeing mainly profit-taking now, but the fundamentals haven't changed at all since last year. Of the two corrections, valuation is more preferable,” he adds. <:P> That said, Herskovitz says he considers telecom services a part of technology, and one stock that looks very attractive there is MCI WorldCom (NASDAQ:WCOM - news) , one of the fund's core holdings. “They didn't participate in the incredible run up in tech stocks in 1999, and they won't be hurt by Bell Atlantic's (NYSE:BEL - news) move into long distance in New York City,” says Herskovitz. “WorldCom has an excellent data business and a very good international business. It's a good value now and looks very attractive. It closed 1999 at virtually the same price that it began the year.” MCI WorldCom closed Wednesday at $51.69 per share. Another name he likes is Qwest Communications (NYSE:Q - news) , the broadband Internet communications company that recently joined the New York Stock Exchange. “It has also developed a very strong data presence and it looks very attractive at these levels,” says Herskovitz. Qwest closed Wednesday at $43 per share. The fund manager also likes several computer hardware stocks. “There were concerns about Y2K and the sector hasn't attracted a lot of (buying) interest, but Y2K didn't have much of an affect,” says Herskovitz. “What will really help the hardware makers this year is Windows 2000, a major new operating system, that will come out in February. Its impact will be similar to the change that occurred when Windows 3.1 supplanted DOS. Windows 2000 is a 64-bit operating system and almost all PCs are a 32-bit system. They can still run Windows 2000, but the performance won't be there,” he says. That's good news, he says, for computer hardware makers such as Dell Computer (NASDAQ:DELL - news) and Apple Computer (NASDAQ:AAPL - news) , which he says should benefit from the new system. Another beneficiary should be Lexmark International (NYSE:LXK - news) , a maker of low-end ink-jet printers. Dell closed at $49.94 per share, Apple closed at $104 per share, and Lexmark ended at $89.84 per share. “Fundamentals remain very strong, and the growth potential has been recognized in most of the technology sectors,” says Herskovitz. “But in terms of where to put new money, the above picks are some of the more attractive stocks.” Jim Grefenstette, manager of the $1.3 billion Federated Growth Strategies Fund (NASDAQ:FGSAX - news) , also says some of the fund's core technology holdings have gotten cheaper in the recent pull back. One of those is RF Micro Devices (NASDAQ:RFMD - news) , a leading provider of radio frequency integrated circuits (RFICs) for wireless communications devices. “The reason wireless phone giant Nokia (NYSE:NOK - news) can offer lower prices is because this technology uses a lot less energy,” says Grefenstette. “We've added to our position in the stock recently as cash comes in.” RF Micro Devices ended at $71.31 per share. Another holding is Mastech Corp. (NASDAQ:MAST - news) , a leading provider of information technology (IT) services, including network services and supply chain management. “Mastech has become a high value services company that also develops Websites, but it is still painted with the information technology brush,” says Grefenstette. “We own quite a bit of the stock already and we'd be looking at buying more in coming weeks if the price continues to be attractive.” Mastech ended at $23.06 per share. Grefenstette also says technology stocks still have very good fundamentals, and he believes that people had delayed taking profits last year due to tax purposes. Some of that activity is prompting the tech sell-off now. “Also, part of it is a fear of higher interest rates,” says Grefenstette. “High interest rates are not good for high P/E (price-to-earnings) stocks, so many of those companies are facing a challenge. Let's just hope that bonds don't go to a 7% yield.” Bottom Line: Even though many technology names remain richly valued, the recent tech stumble has loosened some bargains in a number of attractive sectors. fnews.yahoo.com