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September 24, 2000
The cloud that has hung over the stock market this year does have a silver lining:
Now there are many tech stocks available at reasonable prices. The sky-high
prices of many Internet .com stocks have returned from the stratosphere,
to some extent anyway, and many promising high tech companies are now
available at prices that more fairly reflect a fundamental evaluation.
The euphoria seen last year is over, and for a buyer that's a good thing.
Here are some stocks that look good right now, both the point of view of
Buffettology and more traditional measures of values, such as price/earnings
and price/book ratios.
Sabre Holdings (TSG - NYSE) $30
This is the pioneering travel reservation system spun off from American Airlines.
They lead their industry and are poised to benefit from increased use of the
Internet to book travel.
PE is a reasonable 13, and Buffettology projects a five-year rate of return of 46%.
IBM (IBM - NYSE) $124 (Dividend 52¢/share)
The grand old man of the computer industry is looking pretty attractive these days.
Products are good, they are diversified and under strong leadership.
Buffettology says 35%.
First Data (FDC - NYSE) $41 (Dividend 8¢/share)
These guys do the back office data processing work for many credit card companies.
Cards are everywhere and Internet purchases are almost always by credit card.
PE is a nice low 14 and Buffettology says 33%.
Biogen (BGEN - NASDAQ) $60
My favorite biotech stock these days. They are second to industry leader Amgen,
which also looks like a pretty good buy. Buffettology 33%.
Symantec (SYMC - NASDAQ) $43
This software company is mostly known for security and utility
software for PCs. They are a good growth candidate at a reasonable price:
PE is 15 and PB is 4. Buffettology says 29%.
© Copyright 2000 by Richard Gillmann. All Rights Reserved.
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