This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Report Card: Steven Milunovich

Steven Milunovich
Merrill Lynch
Report Card
2* Overall rank
3* Rank by institutions
1* Rank by stock picking
Makes money for me
Saves me from disaster
Makes me think
Tells the truth
Meaningful service, not overkill
Well-connected
*Out of 25.
Best star rating is 3 stars. Click here for our methodology.
2nd Place Computer Hardware




Bio

B.B.A., University of Wisconsin-Madison; Master of Management, Northwestern University. Milunovich joined Merrill Lynch in 1997 where he covers the server and enterprise hardware sector. He worked at Morgan Stanley from 1992 to 1997, and prior to that worked at Salomon Brothers and CS First Boston.

Industry Outlook and Style

The Winners
By name
By category
By firm
Best stock pickers
Best firms
Milunovich sees two trends creating a positive environment for computer hardware. The analyst, who focuses on enterprise hardware and storage and does not cover PC hardware, is positive on his group, seeing a backdrop of strong spending. "We're probably in year three of a multi-year buying period for Internet infrastructure, which could easily go on for another 10 years." But the Merrill Lynch team has concerns about the PC sector (which is followed at Merrill by Steve Fortuna). As Milunovich explains, "We've argued that the profits in the computer industry are going above and below the personal computer: above, into enterprise computing and, below, into information appliances." The first positive trend he sees is renewed demand for large servers -- particularly UNIX servers. While demand for "big iron" declined significantly in the first half of the 90s, the requirements of current applications necessitate a return to powerful processors. Milunovich sees Sun Microsystems (SUNW) as the primary beneficiary. The second trend is in storage. Whereas storage used to be subservient to the computer, it is fast becoming an equally important and separate purchase decision; a customer, for example, may buy a Sun server but EMC storage to go with it. Milunovich likes Sun and EMC (EMC) in enterprise storage and Network Appliance (NTAP) in storage. (Merrill Lynch has done investment banking for Network Appliance.) He also sees growth among appliances, that is, devices that are optimized to do one thing well. As examples he cites Network Appliance again, as a server appliance specializing in storage, Cobalt Networks (COBT), which is for Web-hosting, as well as the companies making handhelds: Palm (PALM), Research in Motion (RIMM) and Handspring (HAND).

Where does Milunovich see trouble in the group? In what he calls the "legacy vendors" such as Unisys (UIS) and Xerox (XRX), and on the software side BMC Software (BMCS) and Computer Associates (CA), which have not positioned themselves to benefit from the infrastructure buildout. IBM (IBM), on the other hand, is between the two extremes, he explains, with parts of the company being more legacy-like and thus slow-growth while other parts are seeing a boost from the e-business phenomenon. In sum, he says, "We're modestly positive on IBM, more positive on the infrastructure pure plays, and less positive on the Unisys and Xerox names - companies that have had some real disappointments recently."

Stock Pick

Favorite stock for next 12 months: EMC

Comment:
"Storage demand is growing in units at 100+% per year and in revenue, maybe 25% to 30%, and while there's more competition, EMC is the king of the hill."


Rate Their Stock Picks:

Which stock do you like best? Milunovich: EMC Niles: Compaq Young: Gateway


Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs