One Brokerage’s Tech Bets
Everyone seems to have favorite tech stocks, and now the retail investor-oriented brokerage A.G. Edwards of St. Louis has weighed in. Its analysts Thursday released their six favorite “Y2K Technology Plays” for 2000. Here are the picks, along with analysts’ comments:
Applied Materials (AMAT)
Because it sells to virtually every major semiconductor maker, Applied Materials is poised to reap the benefits of the current semiconductor cyclical upturn, which we expect will last through 2001.
Cisco Systems (CSCO)
While competition is increasing, the total available market for networking products is expected to increase almost tenfold. We believe that Cisco’s dominance in the data networking market will enable it to capture more than its fair share of the networking product business.
Citrix Systems (CTXS)
Citrix is on the leading edge of a shift in client-server computing, from fat client to thin client, and is making strong progress in creating a diversified product line.
Comdisco (CDO)
Several key strategies should pay off in 2000. First, Comdisco is transitioning its mainstream business to focus on growth-oriented offerings and high return on investment leasing activities. Second, Prism Communications’ initial public offering this fall should document the value of this major investment.
EMC (EMC)
EMC is a strong enterprise storage company that is growing at a 35%-plus rate as it enjoys rapidly growing sales to Internet companies and to its traditional Global 2000 customer base, which is webifying its business. The gross margins of EMC are also increasing nicely due to higher software sales and a shift to higher-end systems.
Tellabs (TLAB)
The shares have been under pressure recently due to increased competition stemming from Cisco’s acquisition of Cerent and Monterey Networks. Although Cisco is better positioning itself in the telephone carrier market, we do not feel that the threat to Tellabs is significant enough to warrant the weakness in Tellabs’ shares.
P/E ratio = Price-to-earnings ratio for trailing four quarters
EPS = Earnings per share. Growth projections are annualized for the next three to five years.
Sources: A.G. Edwards, Bloomberg News
