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U.S. ON PATH OF SLOW RECOVERY, MODEL OF CONTINUOUS IMPROVEMENT; INVESTORS SHOULD FAVOR ECONOMY/INTEREST-SENSITIVE STOCKS: COWEN & CO.

 U.S. ON PATH OF SLOW RECOVERY, MODEL OF CONTINUOUS IMPROVEMENT; INVESTORS SHOULD FAVOR ECONOMY/INTEREST-SENSITIVE STOCKS: COWEN & CO.
 NEW YORK, Aug. 6 /PRNewswire/ -- Economic expansion abroad will drive up U.S. exports, stabilize depressed cyclical earnings, and effect company restructurings which will maximize "flow through" from sales to earnings, according to the Cowen Summer Investment Strategy Report released today.
 Based on their findings, Cowen strategists believe that cyclical stocks should remain the primary building block of an investor's portfolio.
 "However, investors should increase their weighting of property- casualty, insurance broker and p-c oriented multi-line insurance stocks," said Richard J. Hoffman, chief investment strategist.
 "We also believe now is a good opportunity to nibble at 'true' growth stocks such as Merck, which generally have been out of favor this year but still offer a long-term opportunity for multiple expansion," said senior investment strategist Steven R. Resnick.
 Hoffman/Resnick believe that there is considerable leverage for S&P 500 earnings over the next two years:
 -- A cyclical turnaround in the operating income in volatile depressed industries (i.e., autos and oil), should contribute $4 to $5 to the S&P 500 EPS.
 -- Write-offs should fall from $4.58 in 1991 to about $1 in 1993.
 -- Many companies have learned how to boost profits by taking advantage of decelerating unit labor and material costs and falling interest expense.
 Cowen & Company is a privately held securities and investment banking partnership in New York City, with research and investment banking offices in Boston and San Francisco. In corporate finance, Cowen is one of the top 10 underwriters of equities in the healthcare and technology sectors. The firm also has a significant presence in correspondent services and asset management. Cowen's more than 1,200 employees serve its institutional and individual clients domestically and internationally through 18 offices in the United States and abroad. Cowen has more than $240 million in revenues and $90 million in capital.
 Major Themes of Cowen & Company's Summer Investment Strategy Report
 -- Stock market trading range for next 12 months: 3000 to 3750.
 -- Bull market intact but penned in by economic and political uncertainties.
 -- Portfolio strategy: foundation in cyclical stocks.
 -- Asset allocation: stocks over bonds and cash.
 -- Transition market blurs distinction in leadership between growth and cyclical stocks.
 -0- 8/6/92
 /NOTE TO EDITORS: For copies of the report, or to speak with the authors, call the contacts below./
 /CONTACT: Surya Shah, 212-704-8172, or Jim Bruni, 212-704-8126, both of Edelman Public Relations, for Cowen & Company/ O: Cowen & Company ST: New York IN: FIN SU: ECO


CK-TM -- NY004 -- 7431 08/06/92 09:00 EDT
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Date:Aug 6, 1992
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