"This time is different," said crack analyst Kim Caughey Forrest (and FOBO: Friend of Breakout) to Matt Nesto and me. She's forecasting a recovery in tech stocks, but with a catch: The big winners won't be consumer plays like Apple (AAPL) or Best Buy (BBY) but chipmakers and M&A leviathan AT&T (T).
Caughey-Forrest says AT&T and Verizon (VZ) have the scale and the pricing power to benefit from the seemingly endless boom in smartphone plays. She sees Apple as priced for perfection but thinks AT&T's purchase of T-Mobile will give them the spectrum and market penetration to cash in on the deal in a way AT&T never did with the much-vaunted Apple iPhone contract.
When asked about the AT&T/T-Mobile merger, she says she thinks the deal will go through and that "the Obama administration really loves the fast trains -- and broadband for everyone...This deal allows (AT&T/T-Mobile) to serve the heartland, and I think that's how they get through this regulatory mess."
Finally Caughey Forrest suggests looking to the inside of the smartphones and getting long the guts with companies like Sandisk (SNDK), which makes commodity NAND chips as well as patented solid-state drive technology.
"Tech is really here to stay," Caughey-Forrest says, "if you are extremely selective about what you are buying...if you know how the company makes money and how it's going to grow."
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