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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (23005)	2/18/1999 3:44:00 PM
From: Ruffian	Read Replies (2) \| Respond to of 152472

JGoren, You Want OLD> 95/11-Ten Stocks to Avoid November 1995 Worth magazine/Need To Know TEN STOCKS TO AVOID By Edwin Vroom COMPANY/EXCHANGE/SYMBOL FAIR VALUE (REASONS) Advanced Micro Devices (NYSE: AMD) $22 (Increasing competition; Inability to dominate trend) America Online (Nasdaq: AMER) 50 (Increasing competition; Rising expenses) Home Shopping Network (NYSE: HSN) 8 (Outdated technology; Falling revenues; Weakening fundamentals) IBM (NYSE: IBM) 80 (Outdated technology; Not competitive in hottest markets; Shrinking profitability) Manor Care (NYSE: MNR) 28 (Uncertain regulatory environment) Qualcomm (Nasdaq: QCOM) 32 (Unrealistic expectations; Competitive technologies) Sun Healthcare Group (NYSE: SHG) 11 (Negative regulatory environment; Weak market position) U.S. Healthcare (Nasdaq: USHC) 27 (Margin squeeze; Eroding market share) Wabash National (NYSE: WNC) 28 (Industry slump; Overinflated earnings estimate) Williams-Sonoma (Nasdaq: WSGC) 18 (Slowing growth; Margins under pressure) Edwin Vroom believes in survival of the fittest. The founder of the $270 million New York-based Roanoke Asset Management,Vroom likes companies that are poised to dominate product trends.Positive signs include hefty research-and-development budgets and strict cost controls. Vroom is sour on the stocks of companies that don't exhibit these traits. For example, despite its apparentturnaround, Vroom believes IBM has failed to regain a leading position in high-growth areas such as operating systems, PCs, data networks, and the Internet. America Online is still adding members, but the cost of acquiring new members has been rising along with member turnover. Meanwhile, cheaper Internet services are reducing the number of potential subscribers. Advanced MicroDevices must go head to head with Intel in the competitive semiconductor and microprocessor industry. The company may not have the capital to develop and release a competitive next-generation product.U.S. Healthcare is caught in a competitive vise. Vroom believes the company has kept margins high by keeping reimbursements to hospitals and doctors low. But increased competition is forcing the company to cut fees and raise payments to doctors. In the wireless-communications market, Qualcomm's valuation relative to that of larger industry leaders appears excessive, Vroom says:The company's new product for the cellular-telephone industry must hit a home run to justify the current stock price. TEN STOCKS TO CONSIDER By Jim Melcher COMPANY/EXCHANGE/SYMBOL FAIR VALUE (REASONS) Caterpillar (NYSE: CAT) $60 (Strong product line; International and domestic growth; Strength in emerging markets) Citicorp (NYSE: CCI) 75 (International and domestic growth; Modest price for assets;Management strength) Fluor (NYSE: FLR) 60 (International and domestic growth; Industry growth) La Jolla Pharm. (Nasdaq: LJPC) 6 (Industry strength; Market niche; Innovative research) Liberty Technologies (Nasdaq: LIBT) 8 (Market leader; Innovative technology; Anticipated high growth) SunAmerica (NYSE: SAI) 65 (Industry growth; Earnings growth; Broad product line) Telebras S.A. (OTC: TBRAY) 40 (Inexpensive price for assets; Industry growth; Dominance within market) Vical (Nasdaq: VICL) 14 (Diversification; Market growth; Innovative technology) Westinghouse Air Brake (NYSE: WAB) 20 (Inexpensive price for assets; Industry growth; Market leader) YPF Sociedad Anónima (NYSE: YPF) 22 (Inexpensive price for assets) Jim Melcher qualifies as a grizzled veteran. The president of Balestra Capital survived the down markets of 1962, 1987, and 1990 and the extended bear market of 1973-74. His New York firm,which manages $100 million in assets for about 50 private accounts, has earned an annual 41 percent return for its "high growth" accounts over the last five years. To pick stocks, Melcher starts with a top-down approach that looks for industries poised to benefit from economic and demographic trends. He then searches to find the company in that industry that seems best suited to capitalize on the trend. Fundamentals such as financial strength play a role in the process, but Melcher will buy a great company only if it's strategically positioned to take advantage of one of the themes he's identified. Currently, Melcher's theme of choice is international growth. U.S. companies with a strong international presence make up 15 percent of his portfolio, while foreign stocks account for 30 percent. He likes Fluor because it has a strong record of marketing its engineering and construction services in developing countries. Similarly, Westinghouse Air Brake's new foreign sales effort will market air couplings and braking systems to the fast-growing foreign rail transportation market. Melcher sees Brazilian telephone company Telebras set to ride on the coat tails of Brazil's growing economy. Citicorp has built a global consumer business, but its stock is still modestly priced considering the value of its assets. KEYWORDS: Stock Investing Strategies Company Index Advanced Micro Devices, Inc. America Online Home Shopping Network, Inc. International Business Machines Corporation Manor Care, Inc. QUALCOMM Incorporated Sun Healthcare Group, Inc. U.S. Healthcare Wabash National Corporation Williams-Sonoma, Inc. Caterpillar Inc. Citicorp Fluor Corporation La Jolla Pharmaceutical Company Liberty Technologies, Inc. SunAmerica, Inc. Telebras S.A. Vical Incorporated Westinghouse Air Brake Company YPF Sociedad Anonima