Nasdaq---Anthony (slow)
Focus on transportation stock
Interview: Trevor Stewart Burton & Jacobsen---Miller, Liz---Fund Manager
>> there is a proposed merger that would bring together a hardware and software company today. anthony massucci has more.
>> the nasdaq had a 14-month high. e.m.c. and legato, legato systems, the software maker that connects computer systems, e.m.c. interested in buying the company, making an offer, e.m.c. wants to get 30% of sales from software by 2005. 22% right now coming from software. they’ve made 10 software acquisitions since january, 2000. legato trading up, e.m.c. trading down today. one analyst thinks legato is a perfect edition. we are sense up 30% after second quarter revenue jumped. they make software as well here, that monitors how employees use the internet. their version has been a big seller that’s boosted sales and boosted the stock today. a few more computer-related stocks upgraded at lehman brothers. three that went higher, broadcom, silicon labs, marvell technology, all upgraded by lehman brothers today. and the trucking company, yellow corporation and roadway corporation, roadway up about 50%, yellow down on the day. basically, yellow looking to acquire roadway corporation. the stock trading higher on that news. and arkansas’ best up about $4. the only other nationwide trucker that combines multiple shipments. so that benefited on the back of the yellow and roadway deal.
>> anthony massucci. our next guest makes her investment decisions based on how the economy is doing, finding those benefiting in the current economic climate. liz miller is portfolio manager at trevor, stewart, and jacobson. thanks for joining us.
>> thank you.
>> one of the things you’re keeping an eye on, you’re interested in transportation and the big transportation story of the day involving these two big trucking names getting together. you concentrate more on the trains but what sense do you get from what it means to transportation, this particular deal?
>> i think this is very significant. we have the consolidated bankruptcy over the past year and this merger will bring together the last two major competitors in what we call less than full truckload. and it’s going to be a lot of cost savings and a very efficient move for a nationwide competitor.
>> are they really going to have economies of scale on this deal?
>> i think there will be. part of what’s happened over the years is technology has caught up, too, allowing trucking to be better managed, routes to be better planned, and bringing together two big competitors like this will really help the logistics.
>> let’s talk more about what you like. you don’t own those names. you look more to the trains at this point.
>> yes. in transportation, i think there’s more interesting upside in the railroads right now. in that area. all the majors have a lot to benefit from the early economic cycle. and most of the stocks have started to move and i think have a lot of upside as the economy picks up.
>> another name you like is jefferson pilot. we have it up on the screen. year to date it’s up 14% and we can see it’s had a strong move. take it out a little more than that, back to the beginning of 2001, and you can see it’s just beginning to get back to levels of it last saw about a year ago.
>> absolutely.
>> what do you like about them?
>> this is a very strong management team, very high-quality company over a long history, and as you can see, down with the market because it has a lot of exposure to life insurance and life annuities. we know the demographic play is there once investors come back to the market. a lot of aging baby boomers looking for life insurance and with their savings down, the annuity products and different life insurance products will be very attractive. the stock has started to move from that news.
>> what about other companies that it’s not the majority of their business? with the current deregulation client, is there an opportunity to sell or buy?
>> i think both exist. the company has held that little bit of communications for years, hasn’t done a whole lot with it. we’ve seen a lot of nice upside in the media companies and they own good media assets. i kind of view that as the second kicker to this story. i don’t expect them to see them make a major acquisition.
>> very interesting to watch that. everybody has been waiting for the other shoe to drop following the latest deregulation. let’s talk more about the market outlook. what are you seeing here? a lot of people say this market has come so far this year it shouldn’t have much farther to go. do you agree?
>> i think there’s plenty of upside in this market. i don’t think it’s a straight upside from here. i expect a volatile summer. i think this earnings period could be choppy. i view those as buying opportunities. we think the market, the s&p, could see 1,100 by the ends of the year. there’s still about 11% good upside throughout the rest of the year.
>> because of the economy?
>> absolutely. the market moving at its fastest ahead of the economy right at the turn, and we’re seeing evidence this economy is improving.
>> liz miller, thank you very much.
>> thanks.
>> portfolio manager trevor, stewart, burtson and jacobsen.
