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Stock picks by the pros
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March 30, 2000: 1:42 p.m. ET
Genentech, Amgen, Gilead Sciences, PepsiCo, Schlumberger among top picks
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NEW YORK (CNNfn) - Pure techs and biotechs came in for praise Thursday among money managers and analysts as solid areas in which to find growth opportunities. An oil services firm and a beverage distributor were also mentioned.
Here are some comments on the stocks that recent guests on CNNfn are buying, and why.
 "The last three weeks have been very tough," said Franklin Berger, biotech analyst, J.P. Morgan Securities, of recent market swings, "and many stocks are off their peaks in the biotech market. During times like this you can buy top-tier names for prices you couldn't buy at even a month or two months ago. So this is the time to pick up some of the top-quality names."
"Without question," said Berger, "Genentech (DNA: Research, Estimates) is the finest company in the sector. It has the products, the profits and the pipeline. They're strong in R&D for heart drugs, in drugs for immunology, for cancer drugs, and right now the stock is down; it's a real opportunity at this point."
"In the biotech sector," Berger pointed out, "there's an enormous amount of volatility, and stock prices respond a great deal to news about clinical trials. A clinical trial result that's positive can send the stock soaring, and can take it down to the same extent. What's interesting about Genentech is that they have about four major drugs in phase II testing that are going into the FDA for approval. So some of that volatility will be damped down by the success these drugs will have. These are in cardiology, oncology, in allergy and asthma -- some of the biggest diseases in the world."
 "Amgen (AMGN: Research, Estimates), too, is clearly a winner, because they've got a drug called Epogen, used to treat anemia, and they've got a second-generation drug right behind it," Berger said. "In the smaller sectors, Alexion (ALXN: Research, Estimates) and Celgene (CELG: Research, Estimates) are both looking at new drugs for cancer and for treating heart disease, which are revolutionary because they're new classes of products that have never been used before."
"Gilead Sciences (GILD: Research, Estimates)," said Berger, "is another top-tier name. They are looking at a brand new class of drugs for HIV, and more results from that will be available, I think, at a very important conference in April down in Baltimore. And this will be a life-saving drug for HIV patients who have lost the ability to benefit from the current classes of drugs, people who are running out of time, who have moved on to the so-called 'salvage therapy.'"
 "I think beverage stocks are going to get increased interest," said Robert Morris, director of equity, Lord Abbett & Co. "If the technology sector is peaking here and the market's going to broaden out, the money that has gone into tech is going to look for stocks like PepsiCo (PEP: Research, Estimates) that have lagged, and that also have reasonably good fundamentals going forward."
 Oil services company Schlumberger (SLB: Research, Estimates) is another Morris pick. "We're seeing that OPEC is taking care of their business here," he said. "Oil prices are not going to come down dramatically, they're going to come down a little bit. As a result, with the oil price in the mid-20s, we're likely to see a lot more money going into exploration and development. Schlumberger is an obvious leader in that space. I think we're got a multi-year play in the oil service companies. And we're beginning to see it in stronger prices right now."
 "I think the technology area offers very compelling long-term [opportunity]," said David Sowerby, portfolio manager, Loomis Sayles. "It may the seventh inning of the technology cycle, but as one of my colleagues says, this is the 7th inning of a doubleheader and we're just in the first game. How do you participate? The growth investor can participate in the higher P/E technology stocks, but we as lower P/E investors still have about a 25 percent weighting in technology. We own Intel (INTC: Research, Estimates), for instance, and ADC Telecommunications (ADCT: Research, Estimates), which is a communication equipment company also at a compelling P/E relative to its peers and in a fast-growing area of the economy. I think even the low P/E investor can participate in this technology market along with their growth colleagues."
 "There are two thing we focus on," said David Soetebier, tech analyst, Bank of America Capital Management, "when making decisions about which stocks to buy. We want to play on the growth of the Internet, and we want to play on the demand for wireless services and products. We think Xilinx (XLNX: Research, Estimates) is a less risky way to play on the build-up of those two areas. Xilinx develops proprietary chips, programmable chips, so when those companies need to get a product out to market quickly, the programmable chips are a way to do that. About 70 percent of their chips go to telecom and datacom companies."
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. 
--compiled by Tatiana D. Helenius
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