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Cool Headed On Two Hot Net Stocks


BusinessWeek Investor -- Inside Wall Street

Cool-Headed on Two Hot Net Stocks

As a growth stock investor with a long-term perspective, Peggy Farley is a buy, hold, and "buy some more when they dip" kind of player. That's how she has reaped big gains from MCI WorldCom: She stocked up on shares of WorldCom when it fell after first trying to acquire MCI. And she bought more when the stock fell to 67 during the wooing of Sprint. So what of late has caught the eye of the president and CEO of Ascent/Meredith Asset Management?

Wind River (WIND) and Solectron (SLR) are high on her favored list. Farley takes advantage of Wind's volatility: She buys shares of this maker of operating systems for electronic devices whenever they drop. She thinks the stock, now at 18, will leap to 35 based on its "explosive growth." She got into the stock when it was at 13. Wind's products are embedded into such hot products as Intel's network processor and America Online's set-top cable box. Wind management, she says, expects sales to grow tenfold, to more than $1 billion, in the next few years.

Farley is high on Solectron for its "great management." It builds electronic systems for such biggies as IBM, Cisco Systems, and Sun Microsystems. After every split, the stock unfailingly surpasses its pre-split stock price, says Farley. Now at 68, Solectron should double in a year, she believes. Its success is partly due to the trend among electronics makers to outsource specialized manufacturing jobs, says Farley.By Gene G. Marcial


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