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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (1056)	3/29/2000 7:07:00 AM
From: sam	Respond to of 3951

Scudder Technology's Dougherty, Horton: U.S. Stock Comment By Phil Serafino New York, March 28 (Bloomberg) -- A comment on expected activity in U.S. stocks: Communications-equipment and semiconductor stocks are likely to rally further as communications companies invest in new networks, particularly to carry Internet traffic, said Brooks Dougherty and Robert Horton, co-managers of the $920 million Scudder Technology Fund. The fund returned 167 percent in 1999 and is up 41 percent this year. ``We're still seeing extremely strong spending on the part of carriers,' said Dougherty. UUNet, the Internet arm of MCI WorldCom Inc., has said its infrastructure will get 10 times bigger every year, he said. Companies such as Cisco Systems Inc., the fund's third- biggest holding, and Juniper Networks Inc. are the beneficiaries of that spending, he said. The fund is trying to capitalize on that growth by investing in companies that make fiber-optic network components. The fund's top two holdings are JDS Uniphase Corp. and SDL Inc., which both make fiber-optic network equipment. Cisco, the fund's top holding six months ago, now is No. 3 because JDS Uniphase and SDL have faster growth, said Dougherty. ``We have a `greedy-hogs-at-the-trough' philosophy,' he said. ``We're always trying to trade up in quality and in growth rate.' The fund's other top holdings include Juniper, BroadCom Corp. and Xilinx Inc. The managers aren't put off by the relatively high price- earnings ratios of the stocks they own. ``We're valuation- insensitive,' Dougherty said. The high PE ratios are justified by the rapid profit growth, as long as the companies make good on that promised growth with no missteps, they said. ``We're in the early years of a 20-year cycle' of growth in computer networking, Dougherty said. The fund also owns some consumer-oriented Internet companies, such as America Online Inc. and Yahoo! Inc. ``We still see big growth out of those companies,' said Horton. Both companies also dominate their industries, he said. quote.bloomberg.com