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Stock picks of the week
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June 30, 2000: 3:22 p.m. ET
Motorola, Times Mirror, Citigroup, Walgreen, Affymetrix mentioned
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NEW YORK (CNNfn) - Analysts and portfolio managers highlighted their favorite stocks in the tech, media, consumer products and biotechnology sectors, mentioning names such as AOL, Texas Instruments, Merrill Lynch, Safeway and Abgenix.
Every week CNNfn asks some of the top U.S. analysts and money managers to comment on their favorite picks.
Here's a rundown of their recommendations, culled from CNNfn.com's daily feature, "Stock picks by the pros."
"We think the Internet is tremendously profound. It will continue to have an effect on the global economy over the next five-to-10 years. But there's no way that it is a large enough opportunity to support the 400 companies that have gone public. And I think if you look back in history at different emerging industries, we've often had this feeling that the PCs for example are going to change the world. All you have to do is buy a PC company and you're safe. And actually out of the PC industry, only a few companies emerged to do very well, and we think the same thing will be out of the Internet industry," said Henry Blodget, Internet commerce analyst, Merrill Lynch.
"If you're looking in B2B, Ariba (ARBA: Research, Estimates) is doing very well. That's a leading company; it's very strong. That stock has come back. In B2C, AOL (AOL: Research, Estimates) and Yahoo! (YHOO: Research, Estimates) are hanging in there. They are some of the strongest companies. Ebay (EBAY: Research, Estimates) is also a profitable company.
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"I don't know if the word, paper, will always be after the word, news, but you're [always] going to see companies that know their communities, know how to gather news, how to disseminate information, how to advertise to local communities, how to understand the issues that surround the living of those communities," said Rudy Hokanson, media analyst, CIBC World Markets. "You're going to see the companies today maybe transformed in certain ways, but the Internet is something that we think the newspaper companies are becoming expert at, more than many people realize."
"We like Tribune (TRB: Research, Estimates). We think that their acquisition of Times Mirror (TME: Research, Estimates) was a very good acquisition, and makes them a strong player in the larger media space."
"We like Dow Jones (DJ: Research, Estimates) because of what they're doing, not only with the Wall Street Journal, but also online, electronic publishing."
"We like a small newspaper company, McClatchy (MNI: Research, Estimates), which has very attractive properties and is very good at the Internet."
"Besides Gannett Company (GCI: Research, Estimates), we find that The New York Times (NYT: Research, Estimates) in its strategy is very attractive, and the stock is priced right as far as we're concerned."
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"The fact of the matter is this economy needs to pull back a little bit, build a base, and once it builds that base, I think we're going to take off and see all-time new highs in the market. And you're going to see prosperity like we've never seen since World War II because of that," said David Elias, chief investment officer at Elias Asset Management.
"We continue to like the technology stocks like Texas Instruments (TXN: Research, Estimates), Motorola (MOT: Research, Estimates), and Intel (INTC: Research, Estimates)," he added. "We would be aggressive buyers in here, because again three to five years from today, all of those stocks have the potential of doubling. Their earnings are growing at double digits. That is not going to slow down."
"The same thing [is true] in the financial service area," he said. "Citigroup (C: Research, Estimates), AIG (AIG: Research, Estimates), Fannie Mae (FNM: Research, Estimates), all of those companies are going to do very, very well in the environment that we're in. And what's interesting even though interest rates are up significantly over the last 18 months, Citigroup is selling near its all-time high, AIG is selling near its all-time high. Merrill Lynch (MER: Research, Estimates) is also selling near its all-time high."
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"I think that what we have to understand now is that interest rates had been rising for a year and a half, and now there is this fear that the economy will slow down, and it has," said Louis Holland, chief investment officer, Holland Capital Management. "Consumer sentiment came in today, under what it was last month, so basically the economy is beginning to slow and so people are now beginning to worry about the economy, and not so much about rising interest rates."
Within this environment, he said that, "the staples are probably going to do well and the financials stocks. When I say 'staples,' I'm talking about Safeway (SWY: Research, Estimates), Walgreen (WAG: Research, Estimates) and Pepsi Cola (PEP: Research, Estimates), those kinds of companies."
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"The biotechs have had a very strong comeback the last couple of weeks in anticipation of today's announcement that scientists have completed a rough working draft deciphering the sequence of the human genome. So while it is incredibly positive, and we're probably going to see a lot of announcements by companies that are part of the genome research, I think some of this has been discounted already," Robertson Stephens biotech analyst Jay Silverman said.
"Abgenix (ABGX: Research, Estimates) is the leader in monoclonal antibody technology for the next generation, and basically antibodies have been the dominant drug-driver of biotech stocks the last couple of years. And so far, Abgenix has deals with Human Genome Sciences and Millennium, two of the leading genomics companies. So the first genomic targets, or discoveries for commercial drugs, are going to be antibodies, and Abgenix is by far the best positioned."
Other stocks on Silverman's list included Affymetrix (AFFX: Research, Estimates) and Millennium Pharmaceuticals (MLNM: Research, Estimates).
For more Monday picks, click here
* Disclaimer 
--compiled by Alexandra Twin
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