For those interested, here are some solid investments for 1998. It is a
good time to buy, as the market is still depressed from the recent slide.
Cisco Systems (CSCO ~$90/sh) : The world's leading producer of network
routers and switches (roughly 2/3 of the entire market) is climbing fast
and for good reason. The demand continues to grow as networks proliferate,
and Cisco has virtually unstoppable market presence. While pricey, this
stock should continue to perform well for the foreseeable future. This
would be a good long term "value" investment.
CUC International (CU ~$30/sh) : I've been watching this well-managed
membership organization for a while. However, the agreed upon merger
between CUC and HFS ( Avis, Ramada, Century 21, et al ) is a match made in
heaven. The new organization (which will be called Cendant, I believe),
will be able to snag customers (and profits) coming AND going. CUC has
also managed to smoothly move their $2.9 billion discount business to the
Internet to great effect.
Intel (INTC ~$78/sh) : No matter which way you slice it, Intel's share of
the total market is increasing. With competition weakening from the clone
vendors, and the pool of major architectures getting smaller, Intel is
poised to become an even bigger force in the market as it moves into the
high-end with the IA64. Native architectures that will likely all but
disappear from the desktop over the next 5 years: PA-RISC, Alpha, MIPS, and
PowerPC. Doesn't leave much, does it?
Merck (MRK ~$95/sh) : Long considered a solid value investment, great
things are expected of this company in 1998. FDA approvals are expected in
1998 for new drugs to treat baldness, asthma, and migraines. Additionally,
Merck's recent introduction of the drug Fosamax for osteoporosis is
expected to rack up enormous sales.
Updates regarding previously discussed stocks:
Triquint Semiconductor (TQNT ~$20/sh) : After getting slammed
successively, first by an unexpected inventory glut, and second by the
market slide, the market value of this company has suffered severely.
However, this company still has strong support in the industry and
continues to attract large deals with top wireless vendors. Consensus now
puts Triquint at $40-45 in 1998. Earnings are expected to rebound sharply
next year to $1.20-1.40/sh.
-James Rogers
jamesr@best.com