In Focus

Stocks On Sale

If you haven't read much of the Chicks Eye View this week, let me fill you in. We've spent the last three days talking about market volatility. (That means your stock graph looks a lot like your labor and contraction ticker tape.) Tuesday's article explained why October is always such a scary market month. On Wednesday, Chick Cheryl cheered us up and reminded us we were long-term buy and holders. And yesterday, Chick Megan gave us an example of how fickle short-term investors can be, always making a buy or sell move depending on the latest news release.

I know we've said this twenty times this week, but I might as well say it once more to permanently tattoo it on your brain: "Chicks see downswings as a sale!" But be careful. a sale doesn't mean you should buy anything and everything that's discounted. Chicks are choosy investors. (And we select our peanut butter just as carefully too.)

Today I thought I'd introduce you to some companies that are looking like bargains right now and still meet our Chicks Dozen. I'm not saying you should buy them; your own stock purchases are up to you. I'm just making you aware of what's on sale from companies that meet our Dozen. The ultimate buy decision is up to you. (That was my disclaimer.)

First, here is a list of the ten worst performing industries over the past three months.

Five of those industries are in the technology sector. (Wireless, Semi-Conductors, Consumer Service, Communications Technology, and Technology, Hardware & Equipment.) The market usually runs in cycles, and this was a down Technology Quarter. But be not discouraged! If you can find one of your coveted companies on a downswing, it's worth taking a second look.

Starting with the greatest bargain, lets see what's on the Sale Table...

Yahoo (YHOO) - If you have never been to Yahoo, check it out. It's a website: www.yahoo.com. It is part of the Consumer Service Industry. (I had no idea this is what Internet stocks were now called, Consumer Service. Weird. I thought they were talking about the Customer Service people at JC Penney's catalog or something.) For more information on Yahoo, check out Chick Cheryl's latest tracking report. Of all of today's On Sale companies, Yahoo has the strongest numbers, is cash heavy, and happens to be down 50% in the last three months!!

Applied Materials (AMAT) - One of the industries hardest hit this past three months was the semi-conductors. Semi-conductors are the chips used in communications devices, (cell phones, computers, network servers, and almost everything that needs to communicate with something else, except living things.) The fall of 2000 marked the fall of the semi-conductors, particularly after Intel, a major player in semi-conductors, announced their sales were down. Applied Materials has Gross Margins of 50% and Net Margins of 20%. It might be worth pulling out your calculator and running it through the Chicks Dozen as its stock is down 30% in the last three months.

PMC-Sierra (PMCS) - Another semi-conductor stock, PMC had strong quarterly earnings and is a major supplier for Cisco and Nortel. It has the broadest product line in the industry and has steered clear of the PC sector to focus on the networking end. PMC looks like a bargain at $151 per share. That's down 25% in the past three months, thanks again to the Intel announcement.

Intel (INTC) - Intel's announcement warning in September that their sales had slowed dragged the whole industry down. So what if Intel had a down quarter in revenues. Big whoop. It's like asking yourself, "Am I the parent of a hopeless student if he gets one bad grade in the middle of years of great grades?" That's crazy. Intel's gross margins are 62% and profit margins 30%. but its stock is down 21%. I'm smelling a bargain.

Qualcomm (QCOM) - Qualcomm is in the digital wireless communications products and services industry. They specialize in CDMA technology as opposed to Chick held Nokia's TDMA. These two technologies do similar things, differently. Kinda like AM and FM radio. It's going to take time to see which one ends up being the most popular. Recently, QCOM has teamed up with Motorola, Samsung and Audiovox, but they have nowhere near the market share that Nokia has. If Nokia and QCOM could become friends, they would own this whole industry. In the meantime, QCOM has great numbers, and is still down 20% over the past three months.

Cisco (CSCO) - Cisco helps all the computers of the world talk to each other, no matter what kind of system the consumer is using. I can't believe I am going to admit this, but every time I see Cisco go on sale, I pick up a few more shares. Yep, I'd rather have more CSCO than another pair of black shoes. The computer-networking giant is down 17% in the past three months, and it won't be on sale for long. They have posted ten straight quarters of accelerating sales growth, and are still expected to grow more.

Oracle (ORCL) - Check out the Chicks Dozen report on this company. Oracle manufactures and supplies software to corporations to help them grow. At $29 a share, I'm opening my wallet as I type. I had no idea that it was down 17% in last three months. Oracle dominates the database market with 42% of the share.that's more than double its closest competitor, IBM. Can you say "Bargain Basement?"

Whew, Sale-O-Rama! Get out your calculator, pen and paper! A Chick looks at market volatility three ways: (1) Is one of your desirable stocks suddenly on sale or (2) Is it time to research an On Sale Stock and see if it fits the Chicks Dozen (or your investment approach), (3) The labor pains will end. Any which way, the final buy is up to you, but if you're like me, no sale passes without me doing a little sniffing!