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Stock picks by the pros
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October 5, 1999: 12:16 p.m. ET
Enthusiasm for MCI WorldCom, Intel, CitiGroup, Galileo, LSI Logic
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NEW YORK (CNNfn) - Praise today for a telecom heavyweight, a microprocessor maker, and several semiconductor companies; they're among the picks analysts and money managers are giving the thumbs-up this Tuesday. Here are some of the stocks recent guests on CNNfn are buying and why:
Michael Farr, president of Farr Miller and Washington, likes one stock in particular that he's keeping for the long haul. "Intel (INTC) has the ability to continue to create new products that are going to be essential to the computer market. The Celeron processor, for instance. They have (a real) ability to expand their capacity and productivity, to create new products that are going to be essential to the market place."
"(Intel) is a well-run, well-managed company with a great track record. There`s no comma in the P/E multiple. This is not a dot.com anything. This is a good, solid technology company. And yes, I think you`d want to own it for the next 5, 10 years, easily".
Farr is also a fan of telecom giant MCI WorldCom (WCOM), which today announced its $129 billion bid for rival Sprint (FON).
"WorldCom is a fabulous merger manager. That's not the case with some companies. If you`re a $2 billion company and you`ve been managing a $2 billion company, by acquisition, you grow to be a $20 billion company. There`s no indication that the same management can run a company that`s 10 times as large. WorldCom is a proven manager of larger companies, of being able to integrate these things. We like this merger and we think that the ramifications in the marketplace (mean) a sympathetic rise in a lot of telecom stocks, part of what you saw in AT&T (T) yesterday."
"The PC markets in the semiconductor business have really driven the industry for the last decade or two," notes Dan Scovel, semiconductor analyst at Fahnestock & Co., "but we see that changing over into the communications market: wireless, telephone, networking. All of these things are really creating a bigger piece of the pie and a bigger opportunity for chip makers."
Scovel sees opportunities in some half a dozen firms poised to be the leaders in the semiconductor arena: "Texas Instruments (TXN) is one that we think is a good play in terms of communication. LSI Logic (LSI) is also positioned well to work with the Internet. The PLD (programmable logic device) makers like Altera (ALTR) and Xilinx (XLNX) are also doing well".
"There are also a number of pure plays in the group," says Scovel, "companies like MMC Networks (MMCN), Galileo Technology (GALT), Broadcom (BRCM), Maker Communications (MAKR). All of these companies are smaller, younger, are newer to the business, but they have a clear well-defined focus in the market niche."
Now may be a great time to pick up stocks down from rip-roaring highs, according to Bill Danzell, chairman and CEO of Danzell Investment Management. "The majority of stocks are down over 20 percent, so yes, we are in a bear market, but I do think that we found a bottom here, at least a temporary bottom. This is the time to do it (to buy stocks that are down from their highs). The correction, if it`s not over with, is almost over with and (certain stocks have) weathered the correction very well."
Among Danzell's top picks are "Wal-Mart (WMT), which owns a chain of discount retail stores, Intel (INTC) on the technology side, and CitiGroup (C) on the financial services side."
Danzell also finds value in IBM (IBM) and GE (GE), saying "those are the stocks that (international) investors are going to look at." 
The views presented here are solely those of the analysts quoted. They do not represent the opinions of CNNfn on whether to buy or sell shares of a particular stock.
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