John,
briefing.com commented on the y2k stocks on Friday last week
and Monday this week. Its a pretty good pay site but you can get
access by using the id: etrade and the password: briefing. As I
recall, they said that CHRZ and VIAS were the established y2k players
that had their runs a few months ago. A few new y2k players enjoyed
the run up this time (i.e., ZITL, TSRI, and ACLY). A few analysts
were recommending y2k stocks and these three in particular benefited.
On Friday, TSRI announced that they had a trial with a Fortune 500
company that they thought went well but would not know for sure until
the Fortune 500 company (anonymous) reviewed the results. Based on
this, TSRI rocketed taking ZITL and ACLY with it on Friday. I think
these stocks benefited because they have automated software that
will automatically replace code.
I wouldn't short the "weak swimmers" outside this small group
discussed above. Most of the y2k companies have yet to be
discovered and haven't had the benefit of momentum money. For
instance, I've come across people recommending TPII, CCEE, ISLI,
and UCMP as the next ZITL. TPII and CCEE trade for about $1 per
share. ISLI trades at $9 per share and has a PE of 12. UCMP
nearly doubled in price on Monday from $5 to $8 per share but they
had news of a $100,000 contract in hand and their PE is low (12?).
The best list of y2k companies that I've come across is at
year2000.com. When I get some funds, I might go long
on TPII and ride up on the hype.
I didn't see the y2k show on Dateline (or was it Nightline?) last
night. I'm aware that the Gartner Group (?) estimates the y2k market
to be $300 to $600 billion. They seem to have pulled this number
out of the air in my opinion. Even if the y2k problem is big, it
may be simple to fix. Additionally, in house IT people might
do most of the work rather than contracting out the work. Or maybe
companies will migrate to more sophisticated systems using UNIX or
C rather than patching up their COBOL based mainframes. What
happens if IBM, ORCL, MSFT, CA, or some other established company
comes up with a y2k solution? The y2k market may be big, but it
will only last for 3 years and anyone who knows how to program can
get in the game. I think that ZITL, ACLY, and TSRI just announced
that they would provide y2k software a few months ago. So, even
if the problem is big, there is no guarantee that any company will
capture a large share of the market. Better yet, maybe someone
will come up with a "silver bullet" solution and distribute it
for free over the internet <ggg>.
I would watch ZITL, VIAS, and ACLY very carefully tomorrow as it is
the last trading day before Monday, January 6th when ZITL is
scheduled to make their announcement. Judging by the action today,
ZITL is the only y2k stock that is making a major run (+5 today to
close at 50). It could rally in the morning tomorrow and have a
sell off in the afternoon in anticipation of the announcement.
Happy hunting.
JW |
