Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Night Writer who wrote (88620)	1/4/2001 7:16:18 PM
From: hlpinout	Read Replies (9) \| Respond to of 97611

January 4, 2001 Dow Jones Newswires TIP SHEET: Gabelli Value Manager Finds Tech Bargains By ALLISON BISBEY COLTER Of DOW JONES NEWSWIRES NEW YORK -- With the Nasdaq Composite Index down 40% in the year just ended, technology stocks have been turning up in unlikely places. Take the Gabelli Blue Chip Value Fund. Manager Barbara G. Marcin normally looks for inexpensive stocks among financial service providers, oil companies and consumer product manufacturers. But she has increased technology to 21% of her $21 million portfolio, up from 15.6% at the end of the third quarter. At the beginning of 2000, the fund didn't own any technology stocks. Marcin's top holding is Compaq Computer Corp. (CPQ). She started to buy Compaq's stock early last year and has been purchasing shares for $15 to $22 apiece, well below its 52-week high of $35. Compaq has fallen out of favor because some other personal computer makers, including Apple Computer (AAPL) and Gateway Inc. (GTW), have issued profit warnings. But Marcin said she thinks Compaq has been overly punished. She said she's impressed by the high quality of the company's products and applauds management for moving into servers, or heavy-duty central computers, a business with high profit margins. At $15 a share, Compaq trades at 15 times the earnings Marcin projects for next year, far lower than the price-to-earnings multiple of 25 of the Standard & Poor's 500 Index. Marcin said as a value investor she is able to take advantage of the emotion in the market. "Value investors tend to buy companies that have low expectations for earnings growth, while growth investors look for companies with high expectations," she said. "But when these companies disappoint, there's a lot of downside." She looks for undervalued stocks that are likely to recover within a year or so. She sells the stocks once they reach her target price. "There are always a lot of cheap companies," the manager said. "The hard part is finding the ones that will work for you over the next 12 to 24 months." Unlike other Gabelli value managers, Marcin doesn't pick stocks based on what a company would be worth to a buyer in the private market because that's too difficult to calculate. Still, six stocks the fund held this year met her price target after receiving a takeover offer. Seagate Technology sold its operating assets to a company formed by a group of private equity firms led by Silver Lake Partners and then merged with a unit of Veritas Software Corp. (VRTS) in November. Travelers Group and Associates First Capital were acquired by Citigroup Inc. (C) this year. Another financial holding, PaineWebber Group, was acquired by UBS AG (UBS) of Switzerland. Texaco Inc. (TX) has agreed to be acquired by Chevron Corp. (CHV). General Electric Co. (GE) has bid for Honeywell Inc. (HON). Gabelli Blue Chip Growth returned 11.08% in 2000, compared with an average return of 5.24% among large-cap value funds tracked by Morningstar Inc. of Chicago. -Allison Bisbey Colter, Dow Jones Newswires; 201-938-5298; allison.bisbey-colter@dowjones.com (Corrected 02:26 PM 01-04-01) With the Nasdaq Composite Index down 40% in the year just ended, technology stocks have been turning up in some unlikely places. Take the Gabelli Blue Chip Value Fund. Manager Barbara G. Marcin normally looks for inexpensive stocks among financial service providers, oil companies and consumer product manufacturers. But she has increased technology to 21% of her $21 million portfolio, up from 15.6% at the end of the third quarter. At the beginning of 2000, the fund didn't own any technology stocks.