The pummeling that tech stocks took in April has shaken up a lot of investors. But quite a few tech fans are unfazed by the bloodbath. "We're still very much in technology stocks because, fundamentally, tech companies will continue to be the strongest," says Jerry Apodaca, who heads Apodaca Investment Group.
He thinks the techs will lead the market over the long haul. "We focus our portfolio on companies benefiting from the build-out of the Internet," says Apodaca. That strategy works: The Apodaca Small-Cap Growth Fund racked up gains of 356.5% in 1999 and 59.9% in 2000's first quarter. He has made few portfolio changes--just some small additions.
Two new picks: Media 100 (MDEA), which makes Internet streaming tools for such customers as Microsoft, Apple Computer, and Adobe, and Ditech Communications (DITC), a telecom-gear supplier for voice and data networks. Both stocks have been beaten down: Media 100, trading at 52 in late March, has dropped to 20 1/8. Ditech, which hit 140, has dived to 78. But Apodaca is confident Media 100 will streak back to 50 this year and Ditech to 140. Apodaca says Media 100, also a supplier of digital video-editing gear, has become a major streaming media company.
Analyst Randy Scherago of Prudential Securities, who rates the stock a strong buy, expects that Media 100's Net streaming tools will account for 45% of total sales by yearend. He sees the company earning 40 cents a share this year and 70 cents in 2001, up from 1999's 20 cents.
Ditech has started to make money. Apodaca expects earnings of $1.18 a share for the year ending Apr. 30, 2000, and $1.50 next year. Both Ditech and Media 100, says Apodaca, have potential for huge growth in the New Economy.