"Street Critique"-Toan Tran, Equity Strategist at Morningstar
Wednesday, April 09, 2008SUSIE GHARIB: My "Street Critique" guest tonight specializes in growth and technology stocks and says when it comes to investing in this crazy environment, it's best to weigh things on a stock by stock basis. He's Toan Tran, equity strategist at Morningstar and author of Morningstar's growth investor newsletter. And Toan, welcome to NIGHTLY BUSINESS REPORT.
TOAN TRAN, EQUITY STRATEGIST, MORNINGSTAR: Thank you, Paul.
KANGAS: Tech stocks took a drubbing in the first quarter, as we know, with the NASDAQ Index down over 14 percent. And with that in mind, is it time to look at techs again or are you still kind of sitting on the sidelines here?
TRAN: Like you said, Paul, the NASDAQ had a tough time in the first quarter. But with bad news in the headlines, I think it's time for investors to start maybe taking a look at high-quality technology companies and start putting some on the radar screen.
KANGAS: Many of the big tech firms are really catering to the consumer and consumer spending is not looking very hot right now. So where do you see spending headed and improved (ph)?
TRAN: I think I'm not very optimistic about in the United States. The U.S. consumer is way over burdened with debt. But that won't always be the case. So if you're willing to take a long-term view of things, there are some good values today.
KANGAS: All right. Let's get specific. I understand you like Apple (AAPL), but not at the current price.
TRAN: Yeah. I think Apple is a great company run by a great management team. It got cheap about maybe a month or two ago. I think at $120 per share investors should start building positions. And Apple of course is exposed to the U.S. consumer so I think investors will get a shot at it.
KANGAS: OK. Your second choice is another big name tech stock. Let's have a look at that and we see none other than Intel (INTC).
TRAN: Yeah. Intel is definitely I think should be a core tech holding for any investor. If the shares were to get a little bit cheaper, I think investors again should start building position. Intel is diversifying away from its core PC business into chips for mobile devices and that could potentially be a very big business for them a few years down the road.
KANGAS: So you like INTC on the NASDAQ right.
TRAN: That's correct.
KANGAS: OK. Now your last choice is small cap play. Give me the name and symbol on that one.
TRAN: Sure. This is definitely a very small cap play. The company is called Isilon Systems and the ticker is ISLN. And what Isilon does is it provides storage hardware for things like digital video and digit music, all the things that everyone is producing more of every day. The company became public in late 2007 and it had just a horrid 2007 with a management change and an accounting restatement. But the company's put things behind it and has a great growth opportunity ahead of it. And the shares are exceptionally cheap right now.
KANGAS: OK, very interesting indeed, Isilon. I'll have to remember that one. Toan, do you own any of the stocks personally or have any other disclosure to make?
TRAN: Yes I own both Apple and Isilon personally.
KANGAS: Very good. I want to thank you very much for being with us and we appreciate your views.
TRAN: Thank you, Paul.
KANGAS: My guest, Toan Tran, equity strategist at Morningstar.
