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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Ibexx who wrote (73621)	2/14/1999 12:32:00 AM
From: puborectalis	Respond to of 186894

February 12, 1999 The Market's Hottest Stocks By Jason Tanz YOU WERE kicking yourself in 1997 when you saw Dell shoot up 216%. Surely, you told yourself, it's too expensive now. But the stock continued to explode, and with each uptick you assumed that you'd missed your chance. Our March cover story, "Market Beaters," addressed this common dilemma: At what price should you buy 10 of Wall Street's hottest stocks? We pored over the data to make our decisions, comparing past P/E multiples to the P/E history of the S&P 500. We then used those numbers -- along with some common-sense tweaking -- to come up with our target prices. When these companies hit the inevitable snag, these are the prices that represent real buying opportunities. So how are our dream stocks doing now? Are they any closer to our targets? Well, not yet -- in fact, all 10 are slightly higher than when we picked them -- but there's still reason for hope. America Online (AOL), for instance, shot up 20% after it trounced second-quarter earnings estimates and announced a 2-for-1 stock split payable Feb. 22. The stock is still higher than when we picked it, but it has already fallen 7% from its lofty 52-week high of 177 1/2. Likewise, Cisco Systems (CSCO) shares rose to over 117 in advance of its earnings announcement on Feb. 2. But the stock fell back to 96 after earnings beat estimates by only a penny, and a hoped-for stock split wasn't announced. Now, the stock is near where it was when we picked it, about 105. Intel's (INTC) stock saw some action when the company announced an increased dividend and a 2-for-1 stock split effective April 11. But most of those gains were taken away when prices on Intel's Celeron chip were lowered on Feb. 8. Merck (MRK) has performed solidly since meeting fourth-quarter earnings estimates on Jan. 26, in advance of a 2-for-1 stock split to take place on Feb. 17. Microsoft (MSFT) built up tons of investor goodwill in mid-January when it beat quarterly earnings estimates by 24% after announcing a 2-for-1 stock split taking place on March 12, sending the stock as high as 175. But its highly publicized snafus in the continuing Department of Justice lawsuit brought shares back down to 160, again supporting our claim that the suit might temporarily create a buying opportunity. Still, we aren't there yet. Dell Computer (DELL), General Electric (GE), Charles Schwab (SCH) and Wal-Mart (WMT) have all performed consistently since we picked them, despite a relatively rocky few weeks for the S&P, and for technology stocks in particular. IBM (IBM), however, has wavered from the low 160s to mid-180s over the past several weeks, a fact that lends credence to our argument that this company could face more serious negative pressure in a down market. This despite a 2-for-1 stock split to take place on May 10. For the full story, pick up the March issue of SmartMoney magazine. You can check this page to see how close these stocks are coming to our target prices. What Price Is Right? Company Curr. Price* Forward P/E Target Price 5-Yr. Revenue Growth 5-Yr. Earnings Growth America Online (AOL) 158.50 291 86 124.7% 99.0% Cisco Systems (CSCO) 99.06 76 80 64.8 50.5 Dell Computer (DELL) 89.88 98 50 48.2 116.3 General Electric (GE) 97.63 35 85 12.2 12.9 IBM (IBM) 172.75 26 120 6.0 48.2 Intel (INTC) 126.50 36 97 27.6 29.8 Merck* (MRK) 150.50 34 110 18.8 14.2 Microsoft*** (MSFT) 157.75 65 125 33.5 39.1 Charles Schwab (SCH) 62.69 76 41 25.5 24.2 Wal-Mart Stores (WMT) 84.38 46 70 14.0 11.4 * as of 2/12/1999 6:30 PM Based on consensus EPS estimate for next fiscal year. * Prices do not reflect announced 2-for-1 stock splits: Merck, Feb. 17; Microsoft, March 12. << SMARTMONEY STOCK UPDATE ARCHIVE Comments about this story? Please email your thoughts on this and any other subject to letters@smartmoney.com. DAILY SCREEN