Goldman Goes to Bat for Tech
Tuesday’s intraday market plunge seemed a distant memory Thursday as analysts and investors alike were in a bullish mood.
Goldman Sachs & Co. came out with a “Super Seven” list of tech names it calls “core holdings” for a volatile market, and five of the stocks finished higher.
The list features electronic commerce specialist First Data Corp. (ticker symbol: FDC), software developer Oracle Corp. (ORCL), electronic systems maker Teradyne Inc. (TER), communications chip manufacturer PMC-Sierra Inc. (PMCS), data storage systems maker EMC Corp. (EMC), Internet gear maker Cisco Systems Inc. (CSCO), and PC retailer Dell Computer Corp. (DELL).
“During this period of extreme volatility, we recommend technology names [in whose fundamentals] we continue to have high conviction,” Goldman said in its report.
PMC-Sierra and other chip makers also got a boost as the Semiconductor Industry Assn. said worldwide chip sales climbed 33% in February from a year ago, led by rising demand in Japan and the Asia Pacific region.
“The year-to-year growth of semiconductor sales indicates a strong 2000 for the chip industry,” said George Scalise, the trade group’s president. Sales rose 19% in 1999 and are expected to climb 20% this year.
Intel Corp. (INTC), the leading maker of computer chips, eased 6 cents to $129.81, but most of its competitors got a lift, including Texas Instruments Inc. (TXN), which jumped $10 to $160.
Meanwhile, brokerage analysts issued positive ratings on several stocks in the tech sector and elsewhere, including:
* In the retail group, Limited Inc. (LTD; $46.81, up $5.13) was upgraded to “strong buy” at Banc of America Securities; Sears, Roebuck & Co. (S; $37, down 50 cents) was called “buy” at Lazard Freres & Co.; and Intimate Brands Inc. (IBI; $43.94, up $2.94) was raised to “strong buy” at U.S. Bancorp.
* In the struggling health-care sector, Oxford Health Plans Inc. (OXHP; $14.81, up 25 cents) was raised to “buy” at First Union Securities Inc.
* Internet security company Check Point Software Technologies Ltd. (CHKP; $176.75, up $18.25), which has sunk 40% from its recent peak, was upgraded to “strong buy” at Sands Bros. & Co.
* Two Internet incubators got recommendations, as Safeguard Scientifics Inc. (SFE; $50.50, down $2.50) was rated “buy” in new coverage by Merrill Lynch’s high-profile Henry Blodget, and Internet Capital Group Inc. (ICGE; $73.88, up 17 cents) was reinstated “strong buy” at Deutsche Banc Alex. Brown.
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The Goldman Touch?
Wall Street brokerage Goldman Sachs named its “Super Seven” tech stocks for a volatile market Thursday, and five of them gained ground on the day. Goldman’s picks:
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3-5-year Ticker Thursday close Est. est.EPS Company symbol and change P/E* growth** Cisco Systems CSCO $71.81, -$0.31 139 30% Dell Computer DELL 51.56, -2.36 57 33 EMC EMC 133.13, +6.63 92 31 First Data FDC 45.38, +2.63 23 13 Oracle ORCL 82.19, +3.94 129 25 PMC-Sierra PMCS 185.00, +14.19 253 40 Teradyne TER 96.25, +9.25 41 23 S&P; 500 index 1,501.34, +13.97 26 12
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*Projected price-to-earnings ratio for current fiscal year
**Projected annualized earnings-per-share increase
Source: Bloomberg News
