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Stock picks by the pros
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August 25, 2000: 1:02 p.m. ET
Microvision, Bluestone Software and Duke Energy among the top draws
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NEW YORK (CNNfn) - Money managers and analysts took a look at the technology and utility sectors for their top picks. TiVo and American Electric Power were among their top choices.
While in the markets edged lower, recent guests on CNNfn commented on the stocks they are buying and why.
 "I still like the name Microvision (MVIS: Research, Estimates) a lot. They are addressing a very interesting niche. It's a great play on the intellectual property in that particular space, and we believe there was a tremendous amount of market potential going forward. Again, the stock had been as high as $55, I think, since we spoke about it in June. The reason we hung onto it at that point is we think there's substantially more up side than that. We've actually been accumulating shares on this most recent pullback," said Keith Sabol, manager of the Federated Aggressive Growth Fund.
"They've actually just signed an arrangement with a company out of Groton, Conn., where they'll be providing a wireless access solution where people will be able to provide maintenance services using the retinal scanning technology to project images provided from the Internet," Sabol pointed out. "So maybe they're looking at a maintenance manual or a repair history for a particular history for a particular vehicle, and the mechanic will have access to this information without having to leave the scene on the vehicle that he's trying to work on. The real upside to the story though is on the wireless communications side. If you think about people trying to use the Internet and browse through a personal PDA or a cell phone, the resolution constraints are pretty limiting. The technology -- retinal scanning technology -- offered by Microvision will provide a very high-resolution, high-quality, low-cost image that will be actually added to a cell phone or a PDA. And industry data says that about three-quarters of a billion wireless Internet subscribers will exist in the year 2004, and we believe that just a small penetration into that marketplace creates most of the upside to this story."
He continued, "We still like TiVo (TIVO: Research, Estimates), and actually the day that we talked about it -- on June 14 -- was the day that America Online indicated they were buying one-quarter of the company in the open market. We like the stock prior to that, and had accumulated most of our position before that. In recent days, we began to add to it. They do have a tremendous intellectual property portfolio, again, in this name, and we believe the stock is poised to go dramatically higher from here. In addition to AOL's interest in the stock, Gemstar has previously talked about wanting to do something with TiVo as well. So we believe there is a substantial amount of upside to this story from here." [AOL has planned to acquire Time Warner, the parent company of CNNfn.com.]
"All of the stocks that I tend to invest in are particularly volatile, and Bluestone Software (BLSW: Research, Estimates) has had its ups and downs, like most others. Bluestone is a provider of XML-based e-commerce solutions from the Internet and wireless Internet. Company has about $10 per share in cash and marketable securities, and will be profitable by the third quarter of next year. The revenue growth, on a year-to-year basis, (is) about 100 percent. We believe that we've seen a couple of things impact the stock. One obviously the weakness in the e-commerce market, from the March time frame going forward. The expiration of the lock up of shares. And at this point, I think you've probably seen some tax-loss selling. We again have been accumulating - or increasing a position in this name, in the portfolio, and we believe it's poised to go substantially higher. And again, that's why we hung onto it once it was at 35," Sabol said.
 Utility analyst at AG Edwards, Doug Fisher discussed what he feels needs to be done to improve the sector. "Well, the primary thing that needs to be done is to clear any roadblocks to building new peaking capacity from a permitting and from other issues -- political issues, environmental issues -- that prevent companies, that slow down the construction of new generating capacity. And the same needs to be done," he said. "We need to boost the capacity and remove some of the roadblocks in the transmission systems. So, these physical editions need to be made to the system because, at the bottom, the problem is a lack of capacity and a lack of ability to move that capacity where needed at periods of peak demand."
"We still like a number of names. Certainly a lot of the easing money has been made, but the group still trades at a significant discount on a PE basis to where it typically trades. And we continue to like, on a longer-term basis, Duke Energy (DUK: Research, Estimates). It's one of the better ways to play the need to build out peaking capacity. And on the more yield oriented basis, more traditional utility, we like American Electric Power (AEP: Research, Estimates), which recently closed the acquisition of Central and Southwest, a Texas-based utility," he said.
"There are a number of issues that were going on with American Electric Power -- one-time items in the second quarter, but on an operating basis, certainly they were well in the black," Fisher said. "And as they return their second of the two Cook nuclear units to service early next year, we see a significant improvement in their earnings outlook. We're estimating $3.35 for 2001."
-- compiled by Staff Writer Lucy Banduci
* Disclaimer 
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