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.

Strategies & Market Trends : The Thread -- Ignore unavailable to you. Want to Upgrade?

To: DebtBomb who wrote (37281)	3/13/2001 5:40:26 PM
From: AD	Read Replies (1) \| Respond to of 49816

Why Olstein Is High on Semis By Herb Greenberg Senior Columnist Originally posted at 10:00 AM ET 3/7/01 on RealMoney.com Tech talk: Always love talking to Bob Olstein of the Olstein Financial Alert fund, not just because he takes my call (heh-heh!) but because he makes so much sense. I was just checking in to see if he was still in love with J.C. Penney (JCP:NYSE - news), his fund's largest holding, which now appears to be everybody's favorite. (The answer is yes; he's in the money, but now he'll watch it closely to see if management can deliver on a goal of earning between 70 cents and 80 cents per share this year; he'll probably remain a holder if it can.) The conversation quickly turned to what he's buying: semiconductor and other tech stocks, which he started loading up on in the fourth quarter. His favorites include Cypress Semiconductor (CY:NYSE - news), LSI Logic (LSI:NYSE - news), International Rectifier (IRF:NYSE - news) (which I know some folks are short), Lattice Semiconductor (LSCC:Nasdaq - news), Atmel (ATML:Nasdaq - news), Tellabs (TLAB:Nasdaq - news), TriQuint Semiconductor (TQNT:Nasdaq - news) and Amphenol (APH:NYSE - news). What do they share in common? "They all have cash and no debt," Olstein says. "And you have every analyst telling you to sell it, and they're all generating positive cash flow in a tough environment." With Olstein, who likes to buy stocks early ("you can make money shorting stocks right after I buy them") you just let him talk: "Technology stocks are the steel stocks of 20 years ago; they're the engines of our economy, but that doesn't mean you pay 300 times earnings for them. Everybody is talking about excess inventories that could take as long as a year to work off." Doesn't matter to him. "I like buying them when they're down 70%, and I think each can double." But don't ask him when they'll double, because he doesn't know, but he advises, "You can't wait for a catalyst." Related Stories Count Your Penneys J.C. Penney February Same-Store Sales Fell 2.1% Big Rally? Not Until Investors Are Scared Witless and Stop Speculating Semiconductor Stocks Rally Despite Warnings From Sector TriQuint Semiconductor Lowers Projections What Southwest Bancorp Buried in Its Filings But, Bob, there's a recession in technology. "We understand that," he says, "but the stocks are priced right and we're prepared to wait. Someday, somewhere, somebody will say inventories are down and these stocks will be up 50% before you get a chance to take a look at them." Reminds him of the oil drillers, which he bought in 1998. He also bought Reader's Digest (RDA:NYSE - news) when it was down and out. Fine company, he says, but he recently sold it. Doesn't like the quality of earnings as of late. Oh, and don't go saying, "I thought he was a value investor." Value, to Olstein, is buying something right.