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Sell-side picks for jittery market
By Susan Lerner, CBS.MarketWatch.com
Last Update: 3:42 PM ET Oct 16, 2000 NewsWatch
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NEW YORK (CBS.MW) - They aren't giving out nail files on Wall Street but there certainly is quite a bit of nail biting out there as investors contemplate what to do given current market sentiment. So leave it to the sell-side to provide investors with a much-needed manicure, providing its selection of stocks "poised for a rebound."
"It is unclear whether the great bull is now a bear," Chase H&Q analyst James Furey told clients, "but when the conversation turns to such topics, sentiment is sufficiently bearish to realize it is too late to consider selling quality companies and it is time to consider selectively buying stocks in hopes of a rally in market psychology."
Furey, who said "winners will emerge from the current carnage," highlighted what he called beaten down technology stocks that he believes are poised to rebound when sentiment recovers.
"Stocks most likely to rebound first are those where estimates have remained firm, revenues are growing, earnings are present or within sight, and valuation is reasonable," Furey said.
Included on the list Furey called "Stocks for Self Selecting Skeptical Optimists" were AT&T Wireless (AWE: news, msgs), Art Technology (ARTG: news, msgs), Celestica (CLS: news, msgs), Chartered Semiconductor (CHRT: news, msgs), Cisco Systems (CSCO: news, msgs), Clear Channel (CCU: news, msgs); Compaq (CPQ: news, msgs), DDI Corp. (DDIC: news, msgs), Infospace (INSP: news, msgs), Macrovision (MVSN: news, msgs), Telecorp PCS (TLCP: news, msgs), Taiwan Semiconductor (TSM: news, msgs), and Xilinx (XLNX: news, msgs).
Although Furey's list is limited to "beaten down" technology stocks, Chase H&Q believes there are many other stocks offering "compelling investments."
"Many of the best performing stocks sit 30 percent off their highs," Furey said. "Stocks large and small have been beaten down in all but several sectors, namely healthcare/biotechnology and communications equipment."
Bullish bear?
Elizabeth Mackay, chief investment strategist at Bear Stearns also weighed in with recommendations for this turbulent market on Monday.
"Rather than raising cash at this juncture, we remain inclined to add to holdings, on balance," Mackay wrote in a note to clients. "We still believe earnings visibility will merit a premium, and we would take advantage of downside volatility these days to buy quality names as they correct."
Included on her list, she said, are players that have not disappointed such as Abbot Laboratories (ABT: news, msgs), American Intl. Group (AIG: news, msgs), American Express (AXP: news, msgs), EMC (EMC: news, msgs) and Tyco (TYC: news, msgs), and favored names in the S&P 450 mid-cap areas such as Biomet (BMET: news, msgs), CVS (CVS: news, msgs), First Data (FDC: news, msgs), Hershey (HSY: news, msgs), and McGraw-Hill (MHP: news, msgs).
"Barring the worst-case outcome, the stock market appears to be oversold, reasonably valued and regarded with a healthy skepticism by the consensus, and we are encouraged that equity market excesses and imbalances are being corrected, that the Fed is on hold, and that liquidity trends seem to be improving," Mackay said. |
