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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Senator949 who wrote (81571)	4/25/2000 10:05:00 AM
From: JDN	Respond to of 97611

Dear Robin: This morning before the bell Bloomberg announced there was heavy stock accumulation in AOL and CPQ. JDN

To: Senator949 who wrote (81571)	4/25/2000 10:08:00 AM
From: Piotr Koziol	Respond to of 97611

The Parnassus Fund follows a contrarian investment style - The following interview was conducted by Mark Johnson of the Internet Financial Connection on the Silicon Investor - Start Audio Now: THE PARNASSUS FUND GOES AGAINST the established wisdom of Wall Street by following a contrarian policy of investing in stocks that are out of favor with the financial community. The fund must be following the right approach, because the Parnassus Fund has generated an average annual return of over 29 percent during the last three years. Jerry Dodson, manager of the Parnassus Fund, notes that his fund is a socially responsible mutual fund. "Before investing in a company, we look for things like does it have a good environmental protection policy, does it make charitable contributions, is it a good place to work, is it an equal opportunity employer... things of that nature," he says. After looking at social factors, Dodson then leans towards the business prospects of a company over the next few years. Next, he figures out an intrinsic value for a company using various ratios such as cash flow, PE multiple, price to sales... etc. After determining the intrinsic value of a company, Dodson will pay no more than two-thirds of what he believes the company is worth. "We are bargain hunters, also known as value investors, so we like to make sure the stock we invest in is trading at bargain levels." "We think Compaq will make a strong comeback in 2000" Two technology companies Dodson considers "values" are Compaq (CPQ 27 1/2) and Apex (APEX 29 7/8). He mentions that Compaq has had some difficulty with its PC business, including competing with Dell and keeping costs down. "We think Compaq will make a strong comeback in 2000. Their server business is doing very well and we also expect them to be more profitable on the PC side... We think Compaq will provide a good return and it is at a bargain price." Apex is getting ready to undergo a merger with another company called Cybex. Dodson is high on Apex because it develops switching systems for the server computing market. "Apex is growing very fast and we think it has a lot of upside." Moving away from the technology sector, Dodson favors Freddie Mac (FRE 47 1/2), a buyer of mortgages. Freddie's shares have moved in the downward direction because of rising interest rates. Dodson believes Freddie Mac's earnings will continue to be consistent even if interest rates continue to rise. HSIC has a lot of upside potential... Schering-Plough (SGP 40 1/8) is trading at "bargain levels" because of concerns about its drug, Claritin, which is due to go off patent in the near future. Dodson adds that Schering should come out with a new drug similar to Claritin, which should keep earnings stable. "Schering's stock is a bargain below $40." Another name of value in the Parnassus Fund is grocery store giant Kroger (KR 17 3/4). Kroger ran into some problems in a merger with Fred Meyer. "We think most of those problems are over and think the stock is an excellent buy below $20." In the women's apparel area, Ann Taylor (ANN 24 3/8) and Nordstrom (JWN 29 5/8) are "trading at reasonable levels and can move much higher from present levels." Henry Schein (HSIC 14 3/8) is a dental equipment supplier whose shares have been knocked down from the $35 level. The company has reorganized its sales force and is regaining its market share, according to Dodson. "HSIC has a lot of upside potential and is trading at a bargain basement price right now." Internet stocks are way overpriced When Dodson was asked if there were any areas of the market he was specifically avoiding he stated, "Anything with a dot-com! Internet stocks are way overpriced and will come crashing down. They are not making money and their stock prices are too high...I would be careful of any Internet stock." (Note to readers: He made that statement on Monday April 10th, before the significant correction in dot com companies and the NASDAQ Composite). Recorded 4/00