Stockhouse interviews Acampora from Prudential...
He is bullish about the long term prospects for the DOW and the NASDAQ....He also cites DELL as one of his top picks.
FYI...
stockhouse.com
<<"Leading Wall Street veteran Ralph Acampora is still bullish. The respected technical strategist at Prudential Securities started the year with a 5,000 target for the NASDAQ when the index was at 4,000 and many were doubting it could go higher. Now, in another exclusive interview with StockHouse, Acampora says he has revised his NASDAQ year-end target to 6,000 from 5000. Acampora's top five picks on NASDAQ are Qualcomm, Dell, Medimmune, Informatrix, and eBay. On the NYSE, his top picks are Sara Lee, Wal-Mart, Nokia, Motorola, and AOL.
With more rate hikes expected from the Fed, some Wall Street strategists have expressed concern over the aging nine year bull market. This past week, for instance, Goldman Sachs [GS] chief strategist Abby Joseph Cohen recommended a reduction in high-tech stock holdings.
But Ralph Acampora, leading Wall Street technical strategist at Prudential Securities, remains bullish.
With over 30 years in the investment business, Acampora's sterling record of accurate predictions has landed him a respected name on the street. His recent stock picking record is nothing short of impressive.
For example, in an interview with StockHouse in late December 1999, Acampora recommended taking positions in Immunex [IMNX] (increased 130% to date), Intel [INTC] (increased 46% to date), and eBay [EBAY] (increased 66% to date).
At present, while recognizing that many valuations are rich, Acampora is fully invested. He is a strong believer that this market is being driven by concepts, rather than earnings, and this will send the NASDAQ to 6,000 by year end. In a new book to be published soon, Acampora forecasts an 18-20,000 Dow Jones by 2006 and argues that world peace will be the new force driving the bull market for many years.
In this latest exclusive interview with StockHouse, Acampora names his top five NASDAQ picks with targets: Qualcomm [QCOM], Dell [DELL], Medimmune [MEDI], Informatrix [IFMX], and Microsoft [MSFT]. Acampora believes there are several NYSE stocks ripe for buying, with his top five picks being Motorola [MOT], Nokia [NOK], Sara Lee [SLE], Wal-Mart [WMT], and America On-Line [AOL].
StockHouse: When we spoke in late December of 1999, you had a 5000 target for the NASDAQ when it was around 4,000. We hit that 5000 milestone recently, with some retracing, obviously. What's your outlook now and your rationale behind it?
Ralph Acampora: I have raised that target to 6,000. My rationale for that it that there is good rotation within the NASDAQ. I understand there are some stocks in there that are over-extended, or over-valued. No doubt about it. You can point an accusing finger at some of the biotechs, especially the little genome plays. However, on the same vein, the reason why I was originally optimistic on the NASDAQ was the fact that there's rotation into things like Dell Computer, and Microsoft. They were not big leaders last year. For example, Intel, which is doing real well now, was not a big leader last year. I still think there's a lot of momentum. So the classic big names, the Oracles [ORCL] and Cisco's [CSCO] and the Sun Micro's [SUNW], just look fantastic.
StockHouse: There's also been some concern that the Fed is going to be raising short-term rates 3 or 4 times over the course of the year. With Greenspan's effort to slow the growth, what do you see as the main drivers going forward in this market?
Ralph Acampora: So far, whatever he's done, has not worked. Why? I don't know. These [NASDAQ-traded] firms? have stock, in other words, to raise the money. They don't have to worry about that much about increases in interest rates. Greenspan, in a way, is getting what he wants. I don't think [the rate increases] are over, and some of the real extended stocks within NASDAQ are coming apart like, as I mentioned, the biotechs.
StockHouse: You recommended Immunex in late December, and it has run up about 140%, even though it has slightly retraced. These are substantial gains in a single quarter. Why would you say the large caps are not that over-extended?
Ralph Acampora: It went from 80 down to 50. It had its correction. The quality ones have visible earnings; the quality ones are liquid, they're large. Institutions feel comfortable owning them. I just think they have to pay up for it. My whole mindset is that they're buying concepts and not earnings so much. It's the technology of the day. I'm writing a new book. I'm getting down to the final strokes of what my conclusions are.
StockHouse: What's your primary thesis?
"Peace is what's driving this market, world peace. It's the primary movement."
Ralph Acampora: Peace is what's driving this market, world peace. It's the primary movement.
StockHouse: What are the technical indicators that suggest this bull market still has more fuel to go in year 2000?
Ralph Acampora: I think it boils down to individual stocks. The lifeline of any bull market is rotation. I have no real disagreement with anyone when they say certain groups of stocks are parabolic or over-bought--that's true. For the last two years, they took old economy stocks and they crushed them. Value has come back to value. If for whatever reason you want to lighten up on the Intels and the Ciscos, that's fine. However, I wouldn't do it. But if they wanted to, at least they could get back into the Safeways [SWY], the Sara Lee's, the Caterpillars [CAT]. You can find tons of names. It doesn't mean over the long term that technology is dead. Rather, it just temporarily slows down. I still think that it would be a mistake to sell them because this bull market's going to last many, many years. I think the reality between here and June of the new year, is going to be very broad-based. The tide is going to lift all of them. It's going to lift up old company and new company stocks. The 'Old Economy' and the 'New Economy'.
StockHouse: In reference to Old Economy stocks, which ones are you talking about? Are you referring to one such as Philip Morris [MO], Wal-Mart?
Ralph Acampora: No, not Philip Morris. That's tobacco. I'm referring to the retailers, the Home Depots [HD], the Wal-Marts, the General Mills [GIS] of the world, Sara Lee, food stocks, and the airliners. These I think are going to do well.
StockHouse: Since we talked three months, the P/E multiples have expanded, with evidence of further momentum. For example, at the time, the Internet sector P/E multiple was 4,000; it is well above 4200 today. What's your long term forecast here?
"Everybody says this is unprecedented; that's not true."
Ralph Acampora: I'm right out there for a 18,000 to 20,000 DOW by year 2006. The problem that I have is everybody wants a number; the number is really immaterial. The reason for writing my book was to explain the "why" of what is happening. I think I know why. The fact is that this has happened before. Everybody says this is unprecedented; that's not true. It's not unique. That's the whole thing. This business about "everybody's in the market" and "everybody's playing" the market, the same thing happened in the 1950s
StockHouse: However, it seems like the concern is that the length of this type of market prosperity is unprecented; it's never gone on this long.
Ralph Acampora: No, that's not true. This is the fourth mega-market. The way I look at it, between 1877 and 1890 there was a 14-year run. Between 1949 and 1966, there was a 17 year run, with intermittent corrections and mini-bear markets.
StockHouse: Your record in predicting these short term corrections has been noteworthy. With the spring season around the corner, what's your forecast both in timing and magnitude?
Ralph Acampora: I don't want to talk about that. You know why? Because it doesn't pay. What's a correction? 5%, 8%, 10%? The point is that in January, when the DOW peaked, and hit a low about 2 weeks ago, that was the correction, the major correction. In the process, we finally bottomed-out in the value stocks. That's the point. You could argue with me about NASDAQ if you want. You can argue that we've had 10 percent corrections this year. And you have. The first week in January, the last week of January, and just recently, the NASDAQ went down.
StockHouse: If what you're saying is correct, if the market hasn't changed, then surely the valuation metrics have changed. How can you fundamentally justify these valuation levels?
"Concepts versus earnings. That's the whole theme behind my new book."
Ralph Acampora: I can. I can justify them fundamentally. The fact is that people are willing to pay for new technology, new concepts. Concepts versus earnings. That's the whole theme behind my new book.
StockHouse: Recently, Goldman Sachs strategist Abby Joseph Cohen reduced her equity allocation from 70% to 65% and raised her cash exposure from 0% to 5%. Some of the brightest minds on Wall Street are making the case that we should reduce some of these stock holdings because the valuations in some of these stocks are going off the charts. What are the indicators that the party isn't over yet?
Ralph Acampora: There are no indicators. Let's get back to what I said before. You have some stocks, where I have no argument if you want to say that Cisco's a little too high; I have no argument if you want to say Intel's a little too high. However, I really have a big problem when you tell me there are no stocks to buy, that you've got to raise cash. For two years the Old Economy has been going down--that bear market is over! I can find tons of stocks for you if you really are a value buyer. You know what a value buyer is? A value buyer is one who's willing to buy something real cheap and willing to hold it for a few years, not trade it. That's why I won't talk about trading. If you're willing to buy Sara Lee for a few years and hold it, double up.
StockHouse: Let's talk about those ones in the NYSE, such as the Sara Lee's of the universe.
Ralph Acampora: I'm talking about food stocks. I'm talking about chemical stocks. I'm talking about paper stocks. There's a fire sale out there--if you're willing to hold for several years. That's what a value buyer is.
StockHouse: You were also bullish on the biotech sector. In December of last year, we spoke about Biogen [BGEN] and Immunex.
Ralph Acampora: In December, do you know what that stock was? It was $25 or $30, Immunex, pre-split. Then it went to $70 . It tripled. It's still over double from where I talked about it. I wouldn't sell it.
StockHouse: Which ones are you looking at in the biotech sector? Are still bullish on Biogen and Immunex?
Ralph Acampora: Let's take a look at Medimmune. That stock late December 1999 was about $150. It went to $225, and is now $181. That would be on the top of my list.
"There's a fire sale out there--if you're willing to hold for several years. That's what a value buyer is."
StockHouse: What about Biogen, Amgen [AMGN], or even Genzyme [GENZ]?
Ralph Acampora: Amgen was about $60 when we talked about it, $55 or so. It then went to $75. It still looks great.
StockHouse: What is it about Immunex that you like?
Ralph Acampora: Our analyst likes it fundamentally, and the chart looks just dynamite.
StockHouse: What sectors are you looking at now, and your rationale behind it? Are you looking at semi-conductors, particularly on the NASDAQ?
Ralph Acampora: Well, still the same leaders.
StockHouse: I noticed the last time we spoke, you didn't mention anything about the wireless nor the telecommunications sector.
Ralph Acampora: Qualcomm looks beautiful. Late last year when we were talking, Qualcomm must have been around $125, and then went to $200, and then came back to $125. Now it's $154. It looks great. Qualcomm had a big move, big decline and is now ready to go again. I agree that in the telecommunications sector, many of them have done well, pulled back and are ready to go again.
StockHouse: Anything that's on the top of your list?
Ralph Acampora: Qualcomm would be. Nokia I like. I love Motorola, just love it.
StockHouse: What would would you consider to be your top five picks on NASDAQ in 2000? If you were to only select five, what would they be?
Ralph Acampora: Microsoft, and Informix.
StockHouse: Where do you see Dell going?
Ralph Acampora: $75.
StockHouse: Microsoft?
Ralph Acampora: $200 in a year and a half.
StockHouse: And IFMX?
Ralph Acampora: About $35.
StockHouse: And Immunex?
Ralph Acampora: I'd rather be in Medimmune, not that I don't like Immunex. I see Medimmune at about $225 (one year out).
StockHouse: These are all NASDAQ picks. You mentioned some NYSE stocks earlier. Any other picks on the NYSE?
Ralph Acampora: AOL.
StockHouse: In late December 1999, you were very bullish on eBay. However, eBay has had a huge run-up in the last three weeks. What levels do you see eBay going forward? Do you still see more upside?
Ralph Acampora: Absolutely. It has strong technicals, a lot of volume, and has hit all time new highs. What preceded it was a huge bottom, late 1999, early 2000. It looks fine.
StockHouse: Ralph, thank you very much for your time.>> |
