Here's how to discover value in tech-even at current prices

摘要

The Recovery In The technology industry is just beginning, yet the tech-rich NASDAQ index is up 46% for 2003 and the search for value is tough. Laura Conigliaro, Goldman, Sachs & Co.'s technology strategist, can name lots of great companies she thinks are just adequate investments at current prices. "Where is the valuation reasonable?" she says. "A well-hidden company nobody knows." Or maybe not. There are still tech companies whose stock prices are reasonable―considering their bright prospects. First, find companies riding genuine long-term trends such as the growth of e-commerce, the fight against hackers, and the search for technology to store―and crunch―ever-expanding files of corporate data. Then look to see who outspent rivals during the downturn. A 2002 BusinessWeek study of the 1985 and 1990 tech downturns showed that companies that outspent rivals on research & development and marketing during busts outperformed in recoveries. Finally, look for operating leverage―a cost structure that will give them big profit gains on small sales boosts as business investment turns up in 2004. That search leads to companies in network security, the consumer Internet, and data storage, which are all bets on fundamental changes in how consumers and companies do business.