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To: ms.smartest.person who wrote (1165)	5/3/2001 2:10:28 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

DJ FEER Stock Watch - Back To The Future For Tech Cos 15:58, 2001-05-03 By Ichiko Fuyuno Some investors are claiming to be able to see through the current atmosphere of doom and gloom that hangs over Japanese technology stocks. At first glance, there's much to complain about. A glut of electronics parts since the bursting of the hi-tech bubble and slower-than-expected growth in personal computers and mobile phones are just some of the sector's aches and pains. Japanese technology heavyweights are taking a battering in the market. Take Murata, for example, whose stock price has plunged by almost 50% in the past year. But some fund managers see long-term value in innovative companies, which stand out in an industry beset by what should turn out to be short-term woes. Atsuto Sawakami, president of Tokyo-based Sawakami Asset Management, has been accumulating what he sees as undervalued hi-tech issues since last summer. Hi-tech counters now make up 60% of his 16.1 billion ($130 million) fund. Sawakami says economic factors, balance sheet and price are of little importance when he looks at a stock. ""Why don't we buy cheap stocks which promise to be interesting in five years' time?"" he asks. The 35-year veteran fund manager focuses his research on how companies allocate their resources, especially on R&D, and their vision for the next few years. He looks at how a company has managed to grow and steers well clear of start-ups. Electronics maker Fujitsu is the third-largest holding in his 180-stock portfolio. The company is planning to spend 100 billion on an R&D facility for advanced chips in Tokyo. Sawakami also likes Rohm, which has been popular with many investors of late. The semiconductor manufacturer is likely to halve its investments this year and instead concentrate on developing high-end, value-added products like the light-emitting diodes used in chips. Rohm, which started as a small maker of carbon-film resistor parts in Kyoto, has grown into an industry powerhouse with a market capitalization of $20.9 billion. ""Rohm still has the spirit of a start-up, like cost-consciousness and the ability to move quickly in business,"" Sawakami says. Yukihiko Shimada, senior analyst with Credit Lyonnais Securities (Japan) in Tokyo, says Rohm is the benchmark in the electronics sector because the company covers three key areas in the hi-tech industry -- audio-visual equipment, PCs and mobile phones. Its diversified operations enable the company to remain balanced even when one area deteriorates. Shimada expects the stock price to hover around current levels of 20,000 over the next 12 months. When it comes to optical-device makers, FDK is the top pick of Hisashi Moriyama, who also covers the hi-tech market for Credit Lyonnais. The subsidiary of Fujitsu is one of the world's leading makers of optical isolators, devices that filter out unwanted interference from extraneous light beams and reflections on a fibre-optic circuit. Moriyama says orders for this product nearly doubled in the year ending March 31, 2001, and expects new demand to emerge this year. FDK shares have fallen by 42% to 700 each so far this year, partly due to slowing momentum in the mobile-phone business. But Moriyama is hopeful that the price will hit 1,200 a share in six months' time. Copyright c 1999-2000 Dow Jones Inc. All rights reserved. quamnet.com