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

To: Elwood P. Dowd who wrote (30804)	8/11/1998 7:38:00 PM
From: John Koligman	Read Replies (1) \| Respond to of 97611

From today's WSJ... Some Look for Bargains Amid Tech-Sector Woes By NICK WINGFIELD THE WALL STREET JOURNAL INTERACTIVE EDITION SAN FRANCISCO -- As renewed fears over Asian economic crises buffeted technology stocks in U.S. markets Tuesday, some analysts have begun turning their attention to the most bruised high-tech issues, hoping to find bargains. Following turmoil in Japanese, Russian and other international equity markets, the Nasdaq Composite Index plunged 46.51 to 1792.70, while Morgan Stanley's high-tech 35 index fell 15.80 to 588.61. "I think it's a continuation of the slow-motion realization that this stuff in Asia is not likely to turn quickly," John Rossi, managing director at BancAmerica Robertson Stephens & Co., said of the sell-off. As a result of the turmoil in overseas economies, Mr. Rossi has grown less enthusiastic about blue-chip companies because their market valuations have drifted upwards in recent months; he is telling investors to look for "defensive positioning" in lower-valued stocks. Within the technology sector, that means Mr. Rossi is beginning to turn more positive on "cyclical stocks" -- PC hardware companies, semiconductor firms and disk-drive makers -- that have suffered lately but are poised to benefit most during the holiday shopping season. "A lot are selling at single and low double-digit multiples," he said. "I come away thinking a lot of the cyclical companies are relatively cheap." Similarly, John Eade, director of research at Argus Research Corp., is bullish on several PC makers, including Compaq Computer and International Business Machines, which have suffered from inventory gluts in distribution channels. The gluts are now beginning to clear up, Mr. Eade believes, and the companies are heading into their strongest season -- two reasons he has both stocks on his "buy" list. Mr. Eade is also recommending the stocks of several communications firms, including Lucent Technologies, Tellabs and Qualcomm, because he expects the sector to continue to show strong sales growth. More generally, Mr. Eade believes Tuesday's sell-off represents the tail-end of another market correction, not the beginning of a bear market. "We think this move to the downside has just about run its course," he said. Peter Cardillo, director of research at Westfalia Investments, had a similar view: "I continue to believe we're approaching bottom here because I do think we'll see some sort of catalyst that will turn the market. That will probably either be G7 or central banks forcing Japan to take action to prop up the yen and avoid a Chinese devaluation" of the yuan. But like other analysts, Mr. Cardillo is on the hunt for bargains: He favors micro-cap and small cap technology issues. "I'm nibbling right across the board," he said. Tuesday's Market Activity