Update: Harmon's Internet Picks
by Steve Harmon
CEO and Chief Investment Officer,
e-harmon.com
(Editor's note: Last December, Steve Harmon released his "Harmon 10 for 2000" list, a paid-subscription report that looks at Internet stocks.)
While paid subscribers received an update a few days ago, I wanted to highlight how some of the Harmon 10 for 2000 performed so far to everyone. Overall, I am very pleased with the group, especially Terra Networks {TRRA} and Redback {RBAK}, up triple digit percentages.
The basic premise behind recommending Terra was its ties to Telefonica and existing infrastructure it can leverage to sell Internet access into Spain and Latin America. TRRA is up 147% since 12/31/99.
Sitting in the middle of the broadband revolution, Redback made the top 10 back in January and hit a new all-time high February 24. Similar to JDS Uniphase, RBAK has become a must-own in my opinion. RBAK shares are up 48% YTD.
Let?s see the numbers, the reference is the day prior to my public announcement, in order to remove any market reaction to my picks.
HARMON 10 FOR 2000
Company
Ticker
Day prior to announce
24-Feb-00
Change to Date (%)
Terra Networks
TRRA
$54.75
$135.50
147%
Redback
RBAK
$177.50
$262.25
48%
Pacific Internet
PCNTF
$46.94
$68.50
46%
CNET
CNET
$56.75
$67.38
19%
Spyglass
SPYG
$37.92
$44.44
17%
Net Perceptions
NETP
$42.00
$ 49.00
17%
US Interactive
USIT
$43.00
$ 44.38
3%
Santa Cruz Op
SCOC
$19.19
$ 18.88
-2%
CMGI
CMGI
$138.44
$ 119.38
-14%
AOL
AOL
$75.88
$ 60.00
-21%
Singapore and Asian ISP/hosting/online platform Pacific Internet {PCNTF} has also been a strong performer in my group, up 46%. PacNet reported net income in its latest quarter of $370,000 on $16.6 million revenue, which I think is a strong showing for the company.
Portable Web device browser software maker Spyglass {SPYG} announced plans to open a Japanese software subsidiary, to be able to work closely with huge consumer electronic giants. This builds on Spyglass? Japan office presence. SPYG is up 17% YTD.
Personalization e-commerce solution provider Net Perceptions {NETP} has gained 17% also. The firm just completed its acquisition of ecommerce data analysis company KD1.
The biggest disappointments so far are America Online and CMGI. AOL {AOL} has an excuse in its misbalanced agreement to acquire Time Warner {TWX}. However, I do believe the AOL-Time Warner could become the world?s most valuable company if done right.
CMGI {CMGI} makes the right moves in its fund announcements but the stock is off 14%, year to date. I?m not 100 percent in agreement about its deal to acquire a small piece of Divine Interventures, an incubator in Chicago with no proven track record in the Internet nor no notable Internet moves in general.
Santa Cruz Operation {SCOC} is about flat from December 16 (day before I announced it publicly being on the list). Fourth-quarter Y2K slowdowns and Microsoft selling a small stake hurt this one. But its Tarantella product suite holds promise. Management must now execute on the integration platform it enables.
US Interactive {USIT} is up 3% year to date and still undervalued in my view relative to its peers and potential. The professional Web service firm, and the sector, is one I find very compelling at the apex of commerce.
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sherwoodcoastsgroup.com recommended SPYG at 10 per share in mid 1999, thus far it is showing 300% plus gains since posted to our site.
Hope all is well with everyone!
Bruce Cullen
SherwoodCoastsGroup.Com |
