Jewish World Review August 23, 2001 / 4 Elul, 5761
James K. Glassman
Stocks on the A-List
EACH YEAR, the personal finance magazine Worth polls its
readers on the products they use and enjoy. A lot of
magazines conduct reader surveys, of course, but there are a
few reasons why this one may be of particular interest to
For starters, the average Worth subscriber maintains an
investment portfolio amounting to $932,000 - yes, even after
the NASDAQ meltdown. So we're talking about a fairly elite
audience, one that has a lot of money to spend on the
consumer side, and probably a disproportionately large
influence on corporate purchasing decisions. In a word,
In addition, many of the product categories chosen by Worth
involve technology, so the results of this year's survey may
be interesting to consider as you look for the tech firms that
will continue to grow and thrive in coming years. Worth calls
it "The A-List," the group of products that are first in the
hearts of the people who read the magazine. Worth ranks
them in two ways -- those products that received the
highest satisfaction rankings among subscribers who had used
them, and a "Popular Choice" award for the products used by
the largest number of readers.
In just three of the categories, the same product won both
the top satisfaction ranking and the Popular Choice award.
And all three involve tech products. Morningstar.com was the
big winner among online financial research sites, so you might
want to check it out for its world-class rating system and its
abundant statistics on both stocks and mutual funds. But
since Morningstar is not a publicly traded firm, this pick
doesn't immediately suggest an investment opportunity.
The other two double winners represent intriguing investment
options. In the category for personal digital assistants, the
double winner was Palm, Inc. (symbol: PALM), maker of those
convenient handheld computing devices (also called PDAs, or
Personal Digital Assistants). The stock has been beaten up in
the past year, falling from a high of $67 a share down to a
recent $4. But Palm is still THE brand name in an industry that
appears to have enormous potential. And the Worth survey
represents a vote of confidence from a very influential group
of consumers. Will Palm and its often-maligned management
end up getting crushed by Microsoft in this space? Possibly,
but if the whole world goes wireless, being a scrappy #2 in
the PDA market might not be that bad. And if Palm can right
itself and continue to lead the industry, this stock looks
In the laptop category, Dell Computer Corp. (symbol: DELL)
won on both counts. Dell just reported that it lost $101 million
in the latest quarter (after a $700 million-plus write-off for
costs related to job cuts and plant shutdowns), but it is a
superbly managed company whose products and service are a
continuing hit with customers.
While the rest of its industry suffers through a slump, the
world leader in PC sales continues to grab market share and
chase the lead in servers as well. According to a report from
market research firm IDC on the second quarter of 2001:
"Dell's aggressive pricing and ability to react quickly to
changing market conditions allowed the market leader to
further distance itself from competitors. The company was
alone among the top vendors in growing shipments and
market share as its rivals struggled to preserve volume and
protect margins. Dell far outpaced growth in all regions,
including 10% growth in its core U.S. market, and over 40%
growth in the rapidly slowing Asian markets."
Dell is becoming the next IBM, and appears to be an
outstanding part of a diversified portfolio. As full disclosure: I
am a Dell shareholder. But don't let that influence you either
JWR contributor James K. Glassman is the host of Tech Central Station. Comment by clicking here.
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