A New Look at "Old" Tech
01/07/2005 12:00 am EST
Joe Battipaglia is one of the most popular Money Show speakers, and as chief investment officer for Ryan, Beck & Co., one of the most respected seers on Wall Street, for both his general market and economic assessments and his portfolio allocation strategy.
"The economy should expand between 2% and 3% in real terms next year amid a relatively balanced global expansion. Challenges include the potential for volatile energy prices, high levels of risk aversion among business leaders and investors, and ongoing efforts to combat terrorism and enhance homeland security. Nevertheless, we believe that we have entered the beginning of the expansion phase of the economy's growth cycle, and our overall measures of risk to reward across the various asset classes lead us to conclude that equities remain the preferred asset class.
"Within this environment, Western Digital (WDC NYSE) is our selection as a top pick for the coming year. The company, which designs, manufactures, and markets hard drives, is overlooked as an 'old' technology play. However, in our opinion, the hard drive business is still alive and growing with new applications coming in the audio-video and gaming marketplace. Western Digital trades at an attractive valuation relative to revenues and earnings. We own this stock in our portfolios."