STOCKPILE

John Miller, vice president of research for Ariel Capital Management (312-726-0140), thinks Wall Street has unjustly overlooked Specialty Equipment Companies Inc. (Nasdaq: SPEQ), a suburban Chicago maker of ice creak dispensers and restaurant grills. This company has built a long- standing relationship with its biggest customer, McDonald’s Corp., which uses Specialty products to grill its burgers and mix its shakes.

The brokerage industry’s big players don’t actively cover the stock, so Specialty shares are a bargain at $12.25 (at press time). This is a little under 10 times Miller’s earnings estimate of $1.32 for fiscal 1997, compared with an adjusted figure of $1.23 a share for fiscal ’96. Miller says that McDonald’s rapid worldwide expansion should help keep Specialty’s profits growing at a 12% clip over the next five years.

Pete Seeley, vice president of investments with Rauscher Pierce Refsnes Inc. (800-777-0289) sees a turnaround underway at Tandem Computers Inc. (NYSE: TDM), a maker of fault-tolerant computers. Tandem, whose heavy- duty systems are used in both the New York Stock Exchange and Nasdaq, surprised analysts with fiscal 1996 fourth-quarter earnings of 34 cents, compared with 20 cents a year earlier. At press time, it’s selling at $13.50.

This good news has begun to turn heads, says Seeley. With new management and strategic alliances with partners such as Microsoft, Tandem could serve up another earnings surprise above fiscal 1997 estimates of 88 cents a share.

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