If this market takes out 1278 on SPC on two closing basis or 1292 on SPH we will go much higher and this is the guy who has some great picks, although we have been in some of these stocks for quite some time like EMC at 25$ Nok.a at 45$ and Txn as low as 39$, still some of this is really helpful...
Jubak's Picks
For me, the process of finding profitable stocks is almost as rewarding as the results. So I first write about the strategies, trends and emotions of Wall Street. Then to separate what actually works from what only seems like a great idea, I find individual stocks that embody the approach. Finally, I track these stocks to see how the ideas are playing out. For a full description, see my Nov. 7, 1997 column.
Here's a list of the stocks I'm currently following, along with a list of recently dropped stocks.
Quotes delayed at least 20 minutes.
Company Symbol Date
Picked Price
Then Price
Now Today's
Change Jubak's
Gain/Loss
UAL Corporation UAL 03/05/99 $65.438 $65.438 +$0.438 0.00%
As a wrote in my Aug. 28 column, (See "Will United soar above the cycles?") airline stocks fall when the stock market anticipates slowing economic growth and rise when future growth looks strong. After a year in which the stock was punished by worries that the U.S. economy would slow, I think UAL Corp. (UAL) is likely to be a prime beneficiary now that those fears have proved groundless. I'm adding the stock to Jubak's Picks as of March 5, 1999 with a 12-month price target of $82 a share.
Nokia Corporation NOK.A 02/02/99 $131.875 $145.938 +$7.688 10.66%
Nokia (NOK.A) blew away the earnings estimates for its fourth quarter by 11%. Revenue climbed 63% and earnings soared 75% over the fourth quarter of 1997. And still the stock tumbled -- as of Feb. 1, shares were down $17, or 11%, from the recent 52-week high. I think this has created a buying opportunity. Shares have sold off on the company's cautious comments. But at current prices, I think investors are getting enough potential upside to offset the dangers. I'm adding shares of the No. 1 maker of wireless handsets in the world to Jubak's Picks with a 12-month price target of $178. Full disclosure: I own shares of Nokia.
Nextel Communications, Inc. NXTL 02/02/99 $31.313 $28.813 -$0.438 -7.99%
You certainly can't value Nextel Communications (NXTL) on earnings. The company is still building out its national wireless network and is looking at years of red ink. But that buildout will give Nextel something only Sprint, PCS Group and AT&T have now: a wireless system that spans the U.S. On Jan. 6 and 7, the company introduced its new national service plan and cut long-distance rates to 9 cents a minute. I'm adding Nextel to Jubak's Picks with a 12-month price target of $42.50. Full disclosure: I own shares of Nextel Communications.
Inktomi Corporation INKT 01/29/99 $71.875 $62.875 +$0.688 -12.52%
I'm adding Inktomi (INKT) to Jubak's Picks now that the market has knocked the stock down about $50 off its high. (See "Jumpin' jitters -- this is one nervous market!") In the most recent quarter, its search engine made up just about 50% of sales. But it's Inktomi's new shopping engine, which will link its search engine technology with a database of product information, that should drive the company's growth and stock price. My post-split 12-month target price is $90. Full disclosure: I own shares of Inktomi.
Saville Systems PLC SAVLY 01/14/99 $21.375 $15.875 +$0.250 -25.73%
I'm adding Saville Systems (SAVLY) back to Jubak's Picks with a January 2000 price target of $36 a share. I dropped the stock from this list in June 1998 (after a 20% gain) because of problems in a major product transition. But as I wrote in "Nothing to buy? Hah!," I think the company is now back on track with a product that gives it a major competitive advantage.
Policy Management Systems Corporation PMS 01/14/99 $53.000 $37.250 -$1.313 -29.72%
As I said in "Nothing to buy? Hah!," I think Policy Management Systems (PMS) is an overlooked bargain. At a recent price of $53, the stock trades at just 26 times projected 1999 earnings of $1.99 a share. That's pretty reasonable for a company that I think can keep growing earnings at a 25% annual clip for the next five years. I calculate a January 2000 target price of $64 a share.
EMC Corporation EMC 01/11/99 $94.875 $104.563 +$3.438 10.21%
On top of the need to build ever more storage into the Internet, sales at EMC Corp. (EMC) will get a boost from new software sales to its customer base of 25,000 installed systems. As I wrote in "2 high-tech heavyweights and the tale of the tape," software sales are expected to grow from $400 million in 1998 to $1 billion by 2001, and the high margins in that business should increase EMC's profitability. I've set a price target of $125 a share for January 2000.
Texas Instruments Incorporated TXN 12/01/98 $77.500 $100.625 +$8.125 29.84%
I never should have dropped the stock in October. Texas Instruments (TXN) owns 45% of the digital signal processing market. As I wrote in "Do Intel, Sun and TI pass the 30 P/E test?" analysts project that the company is actually gaining market share, and margins are improving across the board. I'm adding Texas Instruments back as a Jubak's Pick with a June 1999 price target of $120 a share. Full disclosure: I own shares of Texas Instruments.
Electronics for Imaging, Inc. EFII 11/24/98 $28.750 $35.750 +$0.625 24.35%
As I wrote in "Dow 9,800 by year-end?" Electronics for Imaging (EFII) should reap the rewards from the chips it supplies for new color printers now going to market from Hewlett-Packard and Canon. The new chips carry much higher margins than the company's old product line. Analysts are looking for 60% earnings growth in 1999. I'm setting a June 1999 price target of $45 for the stock.
Lear Corporation LEA 10/02/98 $41.500 $35.188 +$0.625 -15.21%
Lear (LEA) has been on an acquisition drive intended to turn itself from a maker of auto and truck seats into a manufacturer of complete interiors. As I wrote in "Four stocks likely to thrive amid deflation," this positions the company for the selective deflationary trend I see ahead. My September 1999 price target on Lear is $60 a share.
Qwest Communications International Inc. QWST 10/02/98 $35.750 $61.375 +$1.625 71.68%
Qwest Communications International (QWST) is selling long-distance service any way it can and as fast as it can, and is now the fifth-largest long-distance carrier in the U.S. As I wrote in "Four stocks likely to thrive amid deflation," its willingness to cooperate with competitors and even compete with its in-house sales force well positions the company for the selective deflationary trend I see ahead. My June 1999 price target on Qwest is $65 a share. Full disclosure: I own shares of Qwest.
First Union Corporation FTU 09/14/98 $52.875 $53.563 +$0.563 1.30%
First Union (FTU) is quite a package. It's cheap on a historical basis at a price-to-earnings ratio of 15.4 (once you add back the charges for recent mergers). And most importantly, as I wrote in my Sept. 15 column, ("When to buy in this market"), earnings are about to take off. In recent quarters operating earnings have grown by more than 20%, but thanks to a global financial crisis that's given a haircut to every financial stock, I expect that cheapness to vanish as the company absorbs the last of its merger-related costs by the December quarter. That will make it easier to see the growth at the company and it's likely to free up some cash for a modest program of share buybacks. I'm adding First Union to Jubak's Picks with a September 1999 price target of $75 a share.
MCI WorldCom, Inc. WCOM 08/14/98 $50.188 $82.813 +$0.938 65.00%
WorldCom (WCOM) is the first telecommunications company to put it all together. As I wrote in "A buy in this market?", when the purchase of MCI closes in the third quarter of 1998, the combined company will be able to offer domestic and international voice services, data networking, Internet access and management. The company also seems to have earned new respect from institutional investors, who snapped up WorldCom's record $6 billion bond offering at a very modest interest rate. I'm adding this stock to Jubak's Picks with a $95 price target for August 1999.
Level One Communications, Inc. LEVL 08/11/98 $23.000 $45.000 +$17.875 95.65%
Level One Communications (LEVL) shares are down more than 25% since July 16. As I wrote in "Driving safely in an earnings fog," that gives me a chance to pick up this fast-growing, well managed chip maker without much downside risk. Analysts project 30% earnings growth for Level One over the next five years -- and the company's portfolio of new products seems ample to support that growth rate. I'm adding this stock to Jubak's Picks with a target price of $50 by June 1999.
Schlumberger Limited SLB 07/09/98 $67.375 $55.000 -$1.375 -18.37%
I added Schlumberger (SLB) to Jubak's Picks in July 1998 ("Take a walk on the dark side") with a price target of $85 in a year. Now it's late November, and while I continue to like the stock and believe that over time the shares of this industry leader will reward investors, it continues to suffer along with the rest of the drillers from cutbacks in oil industry spending. So I'm trimming my target price for July 1999 to $65.
Broadcom Corporation BRCM 06/29/98 $34.938 $53.750 +$3.688 53.84%
Broadcom (BRCM) wins no matter which way the battle among cable, copper wire, wireless and satellite for delivery of voice and data to homes comes out. As I wrote in "The real winner of the AT&T deal," the company specializes in building systems on a chip for delivering broadband signals at high speeds. I've set a price target of $85 a share by February 2000. Full disclosure: I own shares of Broadcom.
Citrix Systems, Inc. CTXS 04/24/98 $58.000 $82.188 +$2.125 41.70%
As I wrote in "Don't Kill the Cockroach Strategy!," I think Citrix (CTXS) is set up for a string of big, positive earnings surprises later this year thanks to its new Metaframe software, set to ship this summer, and the continued explosive growth of Microsoft's Windows NT operating system, which ships with Citrix's Winframes product. I've set a price target of $95 a share by April 1999.
Tellabs, Inc. TLAB 03/17/98 $64.625 $82.750 +$2.688 28.05%
I always like companies that stand a good chance of beating analysts' earnings estimates. Tellabs' (TLAB) new Cablespan technology that I wrote about in my March 17, 1998, column, "Picking Up on Telecom Mergers," lets cable operators deliver telephone service over their coaxial cable -- one of the hottest growth areas in telecommunications. Add in projected 30% growth from the company's products to handle multiplexing and digital cross-connects and I think Wall Street's projections could wind up a bit low. My target price is $108.16 a share by June 1999. Full disclosure: I own shares of Tellabs.
Advanced Fibre Communications, Inc. AFCI 03/17/98 $40.125 $8.063 +$0.188 -79.91%
I think the last shoe has dropped on Advanced Fibre Communications (AFCI). As I wrote in my March 17, 1998 column, "Picking Up on Telecom Mergers" I like the company's Universal Modular Carrier, but management got so carried away with touting the prospects of this technology that it forgot to sell its product. I'm keeping the stock in Jubak's Picks, but I'm slashing my target price to $18 a share by October 1999.
Whole Foods Market, Inc. WFMI 02/24/98 $56.563 $30.750 +$0.188 -45.64%
Whole Foods (WFMI), the leader among natural-food supermarkets that I wrote about in "Hat's Off to Market Cap," seems well positioned to move up the food chain. Wall Street analysts believe that while sales at conventional grocery retailers will be essentially flat, they can easily grow at 20% a year for natural foods. Earnings growth at Whole Foods is pegged at 26% a year over the next five years. My September 1999 target price is $46 a share. Full disclosure: I own shares of Whole Foods.
Cisco Systems, Inc. CSCO 09/12/97 $32.111 $100.813 +$2.563 213.95%
I first recommended Cisco Systems (CSCO) in September, 1997 "Catching The Cisco Express," calculating that at a split-adjusted price of $31.35 or less, buying it and holding for a year would be essentially risk-free. The stock has doubled, but as I wrote in "I'll take Cisco's word for it," I think it still has room to grow. My new price target is $121 a share by February 2000. Full disclosure: I own shares of Cisco Systems.
Recently Dropped
Quotes delayed at least 20 minutes. Company Symbol Date
Dropped Price
Then Price
Now % Change
Since Dropped
Union Pacific Corporation UNP 02/02/99 $52.000 $48.563 -6.61%
Union Pacific (UNP) has climbed faster than I thought it would when I added it to Jubak's Picks on Oct. 6 at $44.50 a share ("Fear turns the tables on 6 stocks") Still, after a 17% run-up in the stock since October 1998, I think investors are likely to see slower appreciation ahead. I don't see a sound reason to raise my target price of $58 for October and that projects out to just a 12% gain over the next nine months, less than I require for a stock in this market. So I'm selling Union Pacific out of Jubak's Picks with a 17% gain.
CheckFree Holdings Corporation CKFR 01/29/99 $40.500 $33.500 -17.28%
For weeks, it's been rumored that CheckFree Holdings (CKFR) ("Hands on the levers") was about to sign a contract with a major Internet player and put its billing and payment service on the Internet. That story has been driving the stock, up 90% in the last month. But the stock is now way above my $25 target and even with the rumored deal, it's also way ahead of the fundamentals. Actual business momentum in the electronic bill presentment and payment industry remains sluggish. I'm dropping it with a 60% gain since I added the stock on Jan. 30, 1998 at $24.75.
FDX Corporation FDX 01/29/99 $81.438 $95.688 17.50%
I continue to like FDX Corp. (FDX), the holding company for Federal Express, as a long-term play on two trends -- the continuing integration of the global economy and the growing need for just-in-time inventory delivery and tracking. But I think this stock is in for a few rough quarters. So, even though it hasn't hit my February price target of $95 a share, I'm dropping the stock out of Jubak's Picks. I have a 17% gain since I added it on March 20 ("Mining for market secrets") at $70 a share.
Lucent Technologies Inc. LU 01/08/99 $115.250 $104.313 -9.49%
Long-term, Lucent (LU) is clearly a core player in construction of the next generation of communications systems. But it's already exceeded my July 1999 price target, and within the 12-18 month time horizon of Jubak's Picks, I think it's time to drop the stock. It has appreciated about 22% since I recommended it in "Who Has Networking's Inside Track?" on July 30 1998 at $95.25.
Vitesse Semiconductor Corporation VTSS 12/08/98 $45.500 $50.313 10.58%
I'm dropping Vitesse (VTSS) from Jubak's Picks with a 152% gain since I added the stock on June 17, 1997 "Chip Investors, Roll Up Your Sleeves," at a split-adjusted $17.375 a share. The company could still grow earnings by 40% a year but that would represent a decline from recent 60% growth. With the stock trading at better than 60 times earnings, I think I'll book my gain and hope I get a chance to step back in. Full disclosure: I own shares of Vitesse.
|
