High-tech firms among "most admired" despite declines

Despite losses in their stock values, companies including Intel, Microsoft, Dell and Cisco landed spots on Fortune magazine's annual "America's Most Admired Companies" list.

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Winning isn't everything.

Despite a vexing year of losses, some of America's best known technology outfits--including Intel, Microsoft, Dell Computer and Cisco Systems--landed spots on Fortune magazine's annual America's Most Admired Companies list.

Analysts say the list shaped up the way it did because investors and business leaders are smart enough to look beyond how companies weathered last year's economic slowdown and the stock market downturn.

"The ones at the top are outperforming over the long term, and that's what investors are looking at," said Sunil Sharma, a market analyst with Lehman Brothers. "They also look at management pretty closely and that's why these companies are still admired."

The top 10 companies on the list--including household names such as General Electric, Southwest Airlines and Charles Schwab--lost an average 10 percent in their stock value during 2000. By comparison, companies that were at the bottom--which were all non-technology types--gained an average of 52.6 percent in value.

These numbers stand in stark contrast, however, to the stock performance of these companies between 1995 and 2000, when the companies in the most admired group far outperformed those at the bottom of the list.

Conclusion: A poor stock performance for one year does not necessarily crimp a technology company's popularity.

Cisco, Intel, Microsoft and Dell were the only high-tech companies named to the most admired list. But these companies were also the list's biggest losers in terms of stock value, with the exception of Home Depot, which declined in value by 33.3 percent in 2000.

America's Top 10 Most Admired Companies, from Fortune magazine's annual list:
Company Rank
General Electric 1
Cisco Systems 2
Wal-Mart Stores 3
Southwest Airlines 4
Microsoft 5
Home Depot 6
Berkshire Hathaway 7
Charles Schwab 8
Intel 9
Dell Computer 10

Source: Fortune.com

Cisco, which won the honor of second most admired company, lost 28.6 percent of its stock value in 2000. Microsoft, which lost 62.8 percent in value last year, landed at number five. Intel came in ninth place, despite losing 26.9 percent in 2000 and Dell was donned the 10th most admired company, after posting a loss of 65.8 percent in 2000.

"The only ones I'd be concerned about are Microsoft and Dell," Sharma said. "While they have management teams that are highly respected, they are in markets that seem to have matured."

A widely reported slowdown in PC sales has hurt the performance of several technology companies during the past two quarters, and could continue to cut into revenue in the year ahead. Sharma speculates that if the slowdown continues, companies tied to the PC industry could drop off the top 10 lists held by Wall Street investors.

"Those are companies that I don't believe investors will flock to when the rebound occurs," he said.

Fortune compiled its list, which was published on the magazine's Web site Monday, after surveying 4,000 businesspeople last year.