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Selkin bullish on SDL
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December 28, 2000: 3:58 p.m. ET
Joseph Gunnar strategist says quick profit should never be the goal
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NEW YORK (CNNfn) - Donald Selkin, chief investment strategist at Joseph Gunnar, said he is very bullish on SDL Inc. despite recent market volatility, but he warned that no investor should put oneself under pressure to score a short-term profit.
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Name: Joseph (location unknown)
Question: Applied Micro Circuits (AMCC: Research, Estimates). I bought the stock at $78.18 this morning, about its high. I understand that tomorrow it will be part of the S&P 500. Will it go up again tomorrow, because it is currently trading around $75? I bought this as a short-term money maker. What do you suggest?
Answer: First, one should never put oneself under the pressure of trying to make a quick profit. Fundamentally, this is a very good company with strong earnings growth, but it is very volatile. I am certain over the next few days that you will get a chance to sell it higher than where you bought it, but no guarantees. I would rather treat this as a long-term hold, because the fundamentals are so strong.
Name: John, Ohio.
Question: WorldCom (WCOM: Research, Estimates). What's the outlook for the next six months?
Answer: One can argue that the stock is "cheap" at current levels, because its multiple is now around 10 to 1. The only problem is that the growth prospects for this industry are extremely low, and there is just too much competition in the long-distance business to generate any kind of multiple expansion. If one has patience, and is willing to have a two to three year time horizon, I believe the stock could go higher. But, basically, there are better places to put one's money.
Name: Gail (location unknown)
Question: Corning Inc. (GLW: Research, Estimates). We have 5,500 shares through work, and we are worried.
Answer: This is a stock that has fallen despite positive preannouncements, not only for this year but for next year. This makes the stock at this price very attractive. I would urge a strong buy at current levels, because the fiber-optic area is still a very high-growth area.
Name: Sam, Louisiana.
Question: SDL Inc. (SDLI: Research, Estimates). What is the short-term outlook? Will it reach its high of 440 again?
Answer: SDL will be merging next month with JDSU, and I am very bullish on the prospects of this merged company. Profit growth is projected for the next two quarters at close to 100 percent, and both stocks are down considerably from their highs. At these levels, I would put a strong buy on both of them at current levels.
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--compiled by Joseph Lee
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