Qualcomm Inc (QCOM)

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S&P's top ten stock picks(QCOM included)
By STEVEN HALPERN
June 30, 2004


Each week we look at the latest investment ideas from the nation's leading advisers. In its special mid-year report, Standard & Poor's The Outlook offers its favorite stocks for the next 12 months. Here are the top picks from analyst Sam Stovall:


Analog Devices (ADI NYSE)

"We project that this semiconductor maker's sales will grow 38 percent in fiscal 2004 and 30 percent in 2005. Its high-performance analog and digital signal processors convert sound and video into digital formats. The products are used in communications equipment, computers and consumer electronics. Our target is $70."


Avon Products (AVP NYSE)

"We forecast that 2004 sales will increase about 11 percent for this global marketer of beauty products. Revenues should be helped by solid volume gains in the core direct selling business, fueled by the growing ranks of sales reps and new products. Our 12-month target is $55."


ExxonMobil (XOM NYSE)

"ExxonMobil should be well positioned to benefit from improved energy demand as economies rebound and from strong U.S. gasoline markets. Also, its diversified businesses should provide a hedge against commodity price and geopolitical risks. We have a target of $52 and advise purchase for potentially superior total return."


Fiserv (FISV NASDAQ)

"This company provides technology systems and services primarily to financial firms. Our earnings forecasts are $1.96 a share for 2004 and $2.20 for 2005 vs. the $1.61 a share reported in 2003. The stock trades at notable discounts to its peers. Our 12-month target price is $45, and we advise purchase for potentially superior capital appreciation."


FMC Corp. (FMC NYSE)

"FMC is a producer of industrial and agricultural chemicals. We believe profits for industrial chemicals will rebound sharply in 2004 as demand continues to strengthen. The stock trades at p/e and cash flow multiples well below those accorded the shares of peers. Our 12-month target price is $54, based on relative p/e analysis."


Guitar Center (GTRC NASDAQ)

"With 130 locations, this is the leading U.S. retailer of musical instruments. We believe Guitar Center should benefit from growth in a fragmented industry, while the school band and orchestra market also holds opportunity for consolidation. The shares trade at 21 times our 2004 earnings estimate of $2.15 a share. Our 12-month target is $55."


Hartford Financial Services Group (HIG NYSE)

"We see a number of encouraging growth trends under way at this multi-line insurance and variable annuity company. Our 2004 earnings estimate is $6.30 per share, at the low end of the company's guidance. The shares trade at a slightly lower p/e than the peer group. Our target price is $74."


Landstar System (LSTR NASDAQ)

"This provider of trucking services uses independent drivers and brokers, who contract with other trucking companies. Given what we consider Landstar's superior operating model, strong growth prospects, low debt and high returns on assets and equity, we believe the shares are worth purchasing for potentially superior long-term capital appreciation. Our 12-month target is $56."


Qualcomm (QCOM NASDAQ)

"We view this wireless technology company as the best in its class, with one of the most attractive business models in the telecom industry. Qualcomm has unique intellectual property, known as CDMA for the mobile wireless industry. The strength of its patents has enabled the company to receive lucrative licensing fees. Our 12-month target is $80."


Zimmer Holdings (ZMH NYSE)

"Zimmer is the largest pure play in the global orthopedics industry. A recent acquisition gave the company a strategically important foothold in the spinal surgery market. We believe Zimmer can increase earnings per share about 23 percent annually over the next three years. Our 12-month target price is $107."


(Learn more about these and other advisers at www.TheMoneyShowDigest.com or contact editor Steven Halpern at DigestEditor(at)InterShow.com.)

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