Goldman Adjusts Tech Growth Stocks Lists; Starent In Favor, EDS Out

Includes: EDS, STAR-OLD
by: Eric Savitz

Goldman Sachs Friday morning unveiled the latest shifts to its Technology Framework, which includes lists of its top five tech growth stock ideas, top five value ideas, and five least favorite stocks.

Goldman made two changes on the list Friday.

Starent (STAR-OLD) was added to the top growth idea list, replacing Oracle (NYSE:ORCL), which still remains Buy rated. Goldman notes that “channel checks suggest that Starent’s business is tracking well with Verizon (NYSE:VZ) and Sprint (NYSE:S).” The company provides multimedia infrastructure for wireless carriers.

As for Oracle, Goldman still likes the stock. But not as much as it likes Starent, apparently. “We remain highly bullish on both near-term prospects of product cycle momentum and longer-term share gains through effective cross-selling of complete solutions sets spanning applications, database, and middleware,” Goldman writes. “However, given the more catalyst-driven nature of this investment list, now that we are through Oracle’s earnings report and given the stock’s strong recent performance, we prefer to rotate into other names that have more immediate catalysts for now. We look to Oracle’s OpenWorld event in mid-November as the next important catalyst for the shares.”

Meanwhile, Goldman added Electronic Data Systems (NASDAQ:EDS) to its least favorite list, replacing Sapient (NASDAQ:SAPE). Sapient remains Sell rated, but was stopped-out on the list on a recent rise in the shares. EDS is actually Neutral rated, but the firm says that “our bias is guarded given the significant hurdles still required to achieve the company’s 2007 bookings and free cash flow targets.”

The full lists:

  • Top Growth Stocks: Accenture (NYSE:ACN), eBay (NASDAQ:EBAY), EMC (EMC), FormFactor (NASDAQ:FORM) and Starent.
  • Top Value Stocks: Cisco, Intel (NASDAQ:INTC), Hewlett-Packard (NYSE:HPQ), Symantec (NASDAQ:SYMC) and Verigy (NASDAQ:VRGY).
  • Least Favorites: Applied Materials (NASDAQ:AMAT), EDS (EDS), Intersil (NASDAQ:ISIL), Nortel (NT) and Teradyne (NYSE:TER).