The run may be over for this one and SKYM, News out this morning:
U have hopefully made money on some. it looks like wall street is out to take back the money, these stocks could be in a free fall today.
Another tip from your Uncle Ernie!!!!!!!!!!
Tuesday, December 29, 1998
Fly-by-night Internet stocks keep soaring
Market Analysis
What is going on with these fly-by-night Internet stocks? SkyMall (SKYM) announces that its holiday Internet sales are up 600 percent over the prior year's period and the stock gains over 191 percent. Go figure! The company's Internet sales for the year will be $2.1 million versus $300,000 for 1997. The company's total sales for the year are expected to be approximately $65 million, compared to last year's $60 million. Hello! You mean that because 3.2 percent of the company's sales were generated from the Web, it deserves a $195-million increase in its market cap? I have to admit that things are getting out of line here.
I have to admit that things are getting out of line here.
Another Internet hero was Active Apparel (AAGP). It announced that it soon will be selling its Everlast apparel products over the Web and it gained over 820 percent in one day. Missed that one! Did anyone check to see if the company even has a Web site? To those of you who bought the stock, you may want to know that it doesn't have one yet. All I can say about these stocks, and all the other firms announcing that they have turned into Internet-focused companies, is that they probably are not focused on creating long-term, sustainable shareholder value. Now you see these valuations...now you don't. Good luck!
On the move...
Now you see these valuations...now you don't.
Network Equipment Technologies Inc. (NWK): The telecommunications-equipment maker said earnings for the third quarter will be "significantly below" forecasts because its Asian sales are weak and it is financing more purchases of its products. NET was expected to earn 20 cents a share for the quarter, based on the average estimate of analysts polled by First Call.
Ideas and trends
What do you do if you're not seeing your stocks jump 10 points in one day? Do you chase these issues and join the online casino trading sites? It's crazy to know that individual investors are trading in and out of stocks as if they were in Las Vegas. The ability to trade online has created a casino-type environment in the market.
Unfortunately, most of this craze has taken place in the Internet space. I can't see these investors really understanding what they are investing in. Most individuals' strategies are momentum based. If stocks are running, it's a sign to jump on in. There will come a point where momentum is completely out of the market and online traders will discover that their strategy doesn't always work. Good luck to those who are using the market as an online gambling opportunity. Enjoy the ride, because winning streaks can turn quickly into losing ones.
Reader ideas
Online trading has created a casino-type market environment.
After doing some research on Viasat (VSAT) I discovered that the stock has posted solid sales and earnings growth over the last several quarters. However, Wall Street has not awarded the stock with a price that better reflects its expected earnings growth. At current prices VSAT is selling at nine times next year's earnings estimates, which is well below its 20 percent expected earnings growth rate.
Analysts have been a bit concerned with the company's recent drop in its backlog. Certain defense contracts that were expected to be awarded during the recent quarter were delayed. Despite the lower backlog figures, I feel that VSAT shares are worth more that $8 per share or nine times 1999 earnings estimates. The stock has a favorable risk-reward profile and I think it is one to look into. VSAT should be a winner next year!
Please send us your ideas. Cousin Bob is always looking for suggestions, and he also welcomes any questions from readers.
go2net Stock Picks is a free service provided to our users with the purpose of outlining our approach to analyzing stocks. Those companies selected for inclusion within our virtual portfolio are done so based on exhaustive research that in our opinion reveals potential investment opportunities (please see Company Reports). go2net has no financial or other interest with these companies that in any way influences our unbiased investment opinion.
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