Personal Finance > Investing
Parnes talks tech
December 29, 2000: 4:01 p.m. ET

Technomart Investment Advisors president pulls for Microsoft, AMD
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NEW YORK (CNNfn) - Joseph Parnes, president of Technomart Investment Advisors, was asked for his take on which technology stocks to buy. His recommendations included Advanced Micro Devices and IBM.

Every day at 1 p.m. ET, CNNfn viewers are invited to call in to the "Talking Stocks" segment and ask equity-related questions of the guest expert. The toll-free number is 800-304-FNET.

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Name: Mark, U.K.

Question: Will JDS Uniphase (JDSU: Research, Estimates) announce a stock split after the merger with SDLI, and what kind of a value is JDSU expected to trade at after the merger late January?

graphicAnswer: JDSU is a fiber-optic network provider. They are in the process of acquiring SDLI. However, because of the market condition and the possibility of a slowdown in the economy, the growth rate may slow versus the higher P/E it achieved two to three months ago. For investors with a one-to-three-year time frame, I would say that all the bad news is discounted on this stock. Accumulation would be in order if general market stability prevails.

Name: Melanie, CA

Question: What is the short-/long-term outlook on AOL (AOL: Research, Estimates) and PMC Sierra (PMCS: Research, Estimates)? I have been holding AOL for two years and I lost quite a bit from my principal this year. Should I hold, or buy more? Is PMCS a good buy ?

Answer: AOL's dilemma is subject to the proposed merger with Time Warner (the parent of CNNfn), which has been in stagnation because of regulatory agency decisions. I would say that once this uncertainty is removed, AOL would benefit. That would be the time for adding to your position, even if it's at a higher price.

PMC Sierra is a semiconductor company that provides specialty chips for wireless communications. It has been hit hard because of the tough market conditions and high multiples. If the market decline continues, chances are that PMCS will decline as well, because of high multiples. However, if you have a time frame of one to three years, I would buy at the prices of $95 to $100, rather than existing prices. It is better to buy at these higher prices, which indicates evidence of accumulation by institutions, which assures that the stock movement going forward is on the upside.

Name: Jerry, Memphis

Question: If you had to pick only one technology stock to buy right now, and hold it for 12 months, which one would it be and why?

Answer: If your objective is cautious (one to three years), my first choice would be Microsoft (MSFT: Research, Estimates). However, if you are risk-oriented and hoping for a rebound in semiconductors, I would buy Advanced Micro Devices (AMD: Research, Estimates).

Name: Doug, Missouri

Question: What is your outlook on Atmel (ATML: Research, Estimates)? Should I sell and take a loss or hold on to it?

Answer: Depending on what price you paid and your time-frame objectives, I would hold on to Atmel. I wouldn't be surprised to see a turnaround in semiconductors. This stock could reach $20 to $25 in one to three years. I would take advantage of the current prices and add to the position. This is a fine company.

Name: Melanie, CA

Question: When do you think the market will turn around and technology will be in favor?

Answer: It is difficult to say where the bottom is. None of us knows exactly. However, with the expectations of the Fed lowering interest rates and a Bush administration attempting to cut taxes, there would be a fiscal stimulant. And the recent selloff of Nasdaq to 5000-plus to the current level leads us to believe we are near the bottom. Tech stocks should be the ones to accumulate. However, attention should be paid to the top-tier/anchor stocks only -- e.g., Microsoft, Cisco (CSCO: Research, Estimates), IBM (IBM: Research, Estimates).

CNNfn welcomes your e-mail questions for our "Talking Stocks" guest. Please include your first name, state and one stock question per e-mail. Please keep in mind: "Talking Stocks" is for specific stock questions only. If you do not see an answer to your e-mail here, it is because our guest does not cover the company. graphic

-- compiled by Staff Writer Lucy Banduci
* Disclaimer


Selkin bullish on SDL - Dec. 28, 2000