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 Rational Analyst -- Ignore unavailable to you. Want to Upgrade?

To: Greg Butcher who wrote (1097)	6/8/1998 2:46:00 PM
From: HeyRainier	Read Replies (6) \| Respond to of 1720

[ One Stock, One Basket ] Is anybody a proponent of the One Basket Theory? Put all your eggs in one basket...and watch that basket carefully. Rainier

To: Greg Butcher who wrote (1097)	6/13/1998 11:30:00 PM
From: Scott H. Davis	Read Replies (1) \| Respond to of 1720

[ADPT followup] Since you brought up ADPT before, Investools has several research options, and sends out a weekly e-mail with summaries of some of their pundits' picks. Here's a mention in the last on on ADPT. FYI Scott ----------------------------------------------------------- 9. Value Investor Finds Undervalued Market Segments (ADPT) Monday, June 8, 1998 "Is the market really as overvalued as pundits claim," asks John Buckingham. He says it is, if you define the market as the DJIA with its blue chip stocks like Disney, Coca Cola and Proctor & Gamble, which trade for price-earnings ratios more than twice their predicted long-term growth rates. The same goes for the major tech stocks like Microsoft, Cisco and Dell which dominate the NASDAQ. These trade for price- earnings ratios near 50 but are likely to grow at only 25% to 30% yearly for the next five years. On the other hand, Buckingham sees a number of undervalued sectors, such as copper, steel, disk drives, semiconductors and other technology and small-cap stocks. One bargain is Adaptec (ADPT), his stock of the month for June. As Adaptec products include SCSI host adapters, disk drive controllers and ATM and Fast Ethernet adapters, Buckingham is not surprised that FY 98 was disappointing considering the turmoil in the disk drive market and pricing pressures in PCs and workstations. "Still, ADPT managed to post operating earnings of $1.54 a share on revenues of just over $1 billion," he says. Though a recent $775 million acquisition of semiconductor and storage system maker Symbios Logic should provide a big boost in sales, Buckingham predicts an EPS of "only" $0.98 per share for FY 99. But he also predicts earnings will recover to $1.93 per share in FY 00 and the firm should post 20% yearly earnings growth for the next five years. "We would buy financially sound ADPT up to $19," Buckingham says. "Our three-to-five year target price is $38." For more on John Buckingham's recommendation see "Stock of the Month," June 1998. Al Frank and John Buckingham recommend out-of-favor, undervalued stocks trading for low valuations relative to what they think the business will be worth over the next three to five years. investools.com