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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: J. P. who wrote (3052)	7/17/1998 7:27:00 PM
From: William Hunt	Read Replies (2) \| Respond to of 21876

THREAD ---Interesting reading about the short term for LU--- Updated 17-Jul-98 Ten Trading Buys in Tech Sector Back on June 9th, we issued a Brief in which we noted that the tech sector was showing signs of emerging from its corrective phase. Our belief at the time (since proven correct) was that the worst was behind the sector, and that it was a good time to consider (re)entering the long-side. Given the scope of the declines, we expected normal corrective activity to result in rather sizable near-term gains for a number of stocks. We listed 10 such trading opportunities. As the table below shows, we hit on 9 out of 10 (Tony Gwynn eat your heart out) for a return of 35.1%. The "Briefing 10" significantly outperformed the Nasdaq Composite (+11.9%) and the S&P 500 (+6.1%) over the 5-wk period. Stock Original Price Yesterday's Close % Gain or (Loss) America Online (AOL) 84 3/4 122 3/8 44.4% Applied Materials (AMAT) 30 1/8 31 3/16 3.9 At Home (ATHM) 36 1/2 50 1/8 37.3 Dell (DELL) 83 11/16 113 3/4 35.9 Kulicke & Soffa (KLIC) 16 7/8 15 7/16 (8.5) Novell (NOVL) 12 3/16 13 1/2 9.6 PeopleSoft (PSFT) 46 7/16 48 3/8 4.2 SCI Systems (SCI) 35 3/16 42 13/16 21.2 Texas Instruments (TXN) 53 1/2 62 15/16 17.6 Yahoo! (YHOO) 109 3/8 186 11/16 70.7 Conditions Change Conditions have changed considerably since 6/9, at least from a psychological perspective. Techs are back in favor, with Internet stocks the star attraction. PC and select telecom equipment stocks have also come on strong. And in the past few days, even the badly deflated chip, chip equipment and disk drive sectors are showing signs of life. Given the change in climate, we thought now would be a good time to generate a new top ten. As we noted in the June Brief, inclusion is not an endorsement of the company's long-term fundamental outlook. These are, as the title of the Brief implies, buy candidates for highly aggressive, risk-tolerant, short-term traders looking to exploit current conditions. We stayed with large-cap stocks since we continue to believe that until events overseas settle down and the earnings picture clears up, we expect institutional money to favor the liquidity of the large caps, and thus we confined our search to that universe. The new "Briefing 10" America Online (AOL 122 3/8): We begin the new list with an old face... AOL remains one of the top brand names on the Internet, and despite recent run up in price remains "cheap" relative to the industry... Management continues to execute... Initial target 135, secondary objective 150. Chart Airtouch (ATI 59 15/16): Leader in the wireless services group, stock showing good momentum... Also one of the few in the group to post a profit... Though competition is intensifying, expect ATI to deliver the goods due to strong management... As long as they hit their earnings target, low-70s is a lay-up. Chart Dell Computer (DELL 113 3/4): Another familiar name but can you blame us? Stock has come roaring back from most recent correction as it usually does. Still tops in PC group and by all accounts business remains strong... Valuations excessive, but as we noted above this exercise isn't about value but momentum... Target is the 140-150 range.Chart Lucent Technologies (LU 92 3/4): After brief bout of sideways action, stock has broken out to a new all-time high... Quickly becoming the dominate player in the telecom equipment area... Briefing expects LU to be the Intel of the 90s, due to paradigm shift from processor speed to increased bandwidth. Management top notch... Target 110. Chart Oracle (ORCL 27 11/16): Software maker beginning to bounce back... Company has been able to overcome Asian flu and post solid revenue and earnings growth... Problems at its competitors in the relational database business has enabled company to build on its leadership position... Given market dominance and respectable growth stock cheap relative to the group... Look for move to the low- to mid-30s. Chart Qwest Communications (QWST 42 1/8): Dynamic leadership, start of the art technology and recent acquisitions position company for rapid growth... AT&T this is how its done... Company also a rumored takeover target, though we don't put much stock in the speculation... Leader in the telecom services industry is poised for test of 50-52. Chart Sun Microsystems (SUNW 49 15/16): Despite Asian difficulties, company posted another quarter of solid growth beating estimates by two cents... Strong management team, solid balance sheet and relatively consistent earnings growth suggest that company will extend its recent gains... So far, company has met the Microsoft challenge... If stock can break through resistance at 53 5/16, 60 will be right around the corner... Chart Tellabs (TLAB 84 3/4): Like Sun Microsystems, company reported better than expected earnings on a 32.5% jump in revenues... Product acceptance, the merger with Ciena and skilled management team leaves TLAB knocking on Lucent's door... Stock could ease back a bit from yesterday's strong gain, but bullish chart configuration and impressive fundamentals suggest that stock will hit the 98-100 area in the not too distant future... Can you say stock split? Chart Veritas (VRTS 50): Another company to have beaten estimates handily, VRTS is poised to extend its recent advance and make a run at the low- to mid-60s... Stock dominates its space and is expected to post average annual earnings growth of 50% over the next 5-years... That's better than 8x the market rate... Deserves multiple expansion and with 23% sequential revenue growth it's going to see it. Chart Yahoo! (YHOO 186 11/16): Is sentiment clouding judgment? Maybe... Let's face it stock not likely to climb 70%+ every month... But in our humble opinion company is tops in the Internet arena, and as such deserves to remain on our list... Upcoming stock split should also underpin the stock... Target = 230.Chart BEST WISHES BILL