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is through long distance carrier MCI-Worldcom. The company may play second fiddle to AT&T when it comes to reaching out and touching someone, but it’s a bona fide leader on the World Wide Web, owning approximately 50% of the Internet’s network. In other words, when you log onto AOL your communication in chat groups and online shipping goes through MCI Worldcom’s infrastructure.
MCI Worldcom is rated a “strong buy” or “buy” by 32 of the 34 analysts that cover the stock on Wall Street. The company is predicted to grow earnings about 30% annually over the next five years.
Leader: Cisco Systems (Nasdaq: csco)
honorable Mention: Lucent Technologies (NYSE: LU)
Think of computer networking as the surefire way to bet on the Internet. That’s because corporations and phone companies will likely suspend billions on the networking equipment designed to help companies plug into the biggest network going: the Web. That kind of demand, by some estimates, should help the computer networking sector grow sales by 30%-40% a year.
Leading the pack is Cisco Systems, a company whose market share hovers around 70%. Wall Street has the utmost confidence in Cisco’s continued dominance. Analysts believe the company can grow earnings by 28% annually over the next five years. That was enough to convince all 30 Wall Street analysts who cover the stock to rate it a “buy” or “strong buy.”
Lucent Technologies is another name you might want to look at. Formerly AT&T’s research and equipment manufacturing arm, Lucent is the leading maker of equipment phone companies from coast to coast use to keep everyone in touch. But now that the worlds of computer networking and telephone communications are colliding, Lucent has been busy snatching up companies such as the proposed $20 billion acquisition of Ascend Communications, that will help it better compete with Cisco. Wall Street projects Lucent to grow earnings by 22% annually over the next five years, and of the 29 analysts that follow the company, 17 rate it a “buy” or “strong buy.”
Leader: Microsoft (nyse: msft)
Next year might not be the best time to bet on software stocks. With the ominous Year 2000 bug likely to plague most corporate heads, software sales are expected to drop.
One segment that will chug along with nary a problem in sight, though, is operating software, a product synonymous with one name: Microsoft.
Microsoft has had its share of woes in 1998, grappling with federal investigators who claim that the company has gone out of its way to thwart the competitors. And, true enough, the government might beat Microsoft and pin an antitrust rap on the software king, but that’s no reason for you not to join Bill Gates & Co. For one thing, says American Century’s Goodwin, Microsoft expects to beat an antitrust rap on appeal. It has a virtual lock on the market-some say as much as 80%. That’s in part why Wall Street thinks the company will grow earnings at an average annual rate of 24% over the next five years. Microsoft is rated