|
Stock picks by the pros
|
 |
December 9, 1999: 12:42 p.m. ET
Retailers draw analysts’ attention; cellphone makers also rate highly
|
NEW YORK (CNNfn) - Retailers and tech companies rated highly with equity analysts and money managers Thursday. Here are some of the stocks recent guests on CNNfn are buying and why:
Flush in the middle of holiday shopping season, shoppers are really starting to show their preferences when it comes to certain merchants, says Britt Beamer, chairman, America’s Research Group.
"I would say the major department stores are the ones that are struggling the most because people expect more service out of them,” he said. "The discount stores are probably winning.”
"But what`s also happening too, is the category killers have done very well this year ...as their price image starts to get stronger,” Beamer added. "You’d expect better service for example at a Best Buy (BBY) and you get it. You’d expect a little more service at Circuit City (CC) and you get a little more service.”
"A retailer like American Eagle Outfitters (AEOS) "really impresses me because they have a great e-tail site out there where they’re attacking the marketplace,” he said. "The stores look sharp.”
Beamer says the Gap (GPS) stores are a little bit behind last year’s pace. "It’s amazing that The Gap is on trend, but it’s not as on trend as it was a year ago,” he said. "So, it’s doing well this year, but not doing nearly as well last year because of that reason.”
The market for retail furnishings is booming, according to Richard Church, Salomon Smith Barney.
"Consumers will continue to invest in their homes, whether it’s in areas like appliances, or electronics, or table-top housewares, or home fashion, I think that’s going to be an area where people will continue to want to invest in,” he said. "That bodes well for chains like Williams-Sonoma (WSM). Target, which is a division of Dayton Hudson (DH), has a very strong franchise as it relates to the home. And department stores will get their fair share out of the home category as well.”
If a company is not aggressive about making use of technology, says Dennis McKechnie, portfolio manager at Pimco, then "technology is helping their competition and technology is the winner of that game every time.”
Redback Networks (RBAK) and Juniper Networks (JNPR) are two tech stocks that McKechnie is particularly happy with, saying "we own a handful of [broadband services-related stocks] because we see a lot of great fundamentals out of there.”
"We also own companies like Broadcom (BRCM) that are doing extremely well,” McKechnie said. "We all want data to our home an to our office a lot faster than it came yesterday, so it’s a great theme”
McKechnie says technology stocks in general, despite nose-bleed highs, can be stupendous growth opportunities for the selective investor.
"You know, it goes technology by technology, but I would say second inning, that would be cell phones,” he said. "Cell phones are probably 20 percent of the way that they are probably going to go. Long distance, 20 percent; fiber optics through long distance. Semiconductors, 20 percent; it’s still quite, quite early [yet].”
Robin Griffiths, technical analyst, HSBC Securities, has some picks for the conservative investor looking for gold in the Dow hills.
"[The ‘right’ stocks have] to be household names that dominant their industry, not just here, but overseas as well,” he said. "So, Wal-Mart (WMT) is absolutely number one. And a company like GE (GE) is widely though to be one of the best conglomerates on the planet.”
"Even those Dow constituents that had a really bad year last year, like Coca-Cola (KO), are recovering very nicely now,” Griffiths added. "So, as long as it’s a superb business franchise it won’t stay down for long.”
On the other hand, said Griffiths, "These are [also] the kinds of stocks which in a few years won’t actually be in the Dow anymore. You see we’ve recently taken out some of the old stocks and put in the Microsofts. I think as we go through time, this index will more and more start to reflect the modern American economy as opposed to the old one.”
Some of Griffiths’ picks for that eventuality? "Nokia (NOK) and Ericsson (ERICY), Motorola (MOT). Motorola is an excellent company. They’re up against some of the fiercest competition in the world, but they’re doing well. I would currently rate them under Nokia and Ericsson, but they’re still good.”
"And when you look to China where the potential growth for cell phones is enormous, actually Nokia has got the right sorts of deals with China Telecom,” Griffiths added. "I think they`ve got a superb future.”
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. 
|
|
|
|
|
 |
|
