The Internet & Casino Stock Report
July 6, 1999
Market Overview:
Stocks continue to gain strength with the Dow closing at 11,139 (a new all
time high). The charts suggest 12,450 as the next major objective. The
upcoming three weeks should be powerful as the averages trend higher into
what is generally believed to be a very positive outlook for 2nd quarter
earnings.
Casino Issues:
Starnet Communications (SNMM) gained 4 7/8 to 24 7/8 (+24%) .GIC Global
(GGNC) closed at 1 5/8; TTLN gained a fraction to 0.59
Money flow now favors the Nasdaq National Market, therefore we will avoid
trading in the OTC:BB over the next few weeks to focus on more pressing
markets (see below).
Stocks to Watch:
Going into Friday's trading we were expecting very little activity. However,
a shift in market dynamics has suddenly created a flood of buying in
previously neglected IPO's. Many Internet stocks offered in late May and
early June are now aligning themselves in valuation to match levels held by
their larger competitors. Several of these companies fell below their initial
offering price and have now begun to gain momentum. Buying is occuring at a
frantic pace offering tremendous opportunities. Adding to the buying frenzy
is anticipation that many of these companies will soon have favorable
coverage initiated by their underwriters. For many of these companies
coverage is expected in early July following the end of the traditional
30-day post IPO quiet period.
Considering the change in the overall market environment it became necessary
to cleanse our portfolio of all loosing positions. This is by no means a
reflection of the quality of companies being sold. In fact, we believe many
of these stocks will run higher in the coming days. It simply becomes a
matter of increasing the probability of a higher overall rate of return in
the days to come. Sold were Affinity Technologies (AFFI), Total Entertainment
(TTLN), Cosmoz.com (CMOZ), Mortgage Brokers Holding Corp (MBHC), 1-800-Travel
(IFLY), and Generation Entertainment (GNEN). Purchased were the following:
Online grocer Streamline.com (SLNE) at 8 7/8, Network Access Corp (NASC) 13
5/8, Digital Island (ISLD) 21, Dr. Koop.com (KOOP) 22 3/8, Flashnet (FLAS) 27
13/16, and SBA Communications (SBAC) 10 3/8. Still holding High Speed Access
Corp (HSAC) from 19 5/8, eLottery (ELOT) from 3.60, JB Oxford (JBOH) from 14
7/16, and Netgravity (NETG) from 19 3/16. Netgravity jumped 16% on Friday as
rumors suggested the company could be a takeover target of Doubleclick (DCLK).
Other recent IPO stocks to look at for Tuesday: Que Pasa (PASA), company is a
Spanish language search engine trading at just 18 9/16. Look for this one to
move higher following Infoseek (SEEK), Goto.com (GOTO), and Lycos (LCOS).
Earnings anticipation for high-flyer YHOO on Wednesday should underpin group.
Also on our watchlist for purchase tomorrow; Ramp Networks (RAMP), Zany
Brainy (ZANY), Edgar Online (EDGR), Peapod (PPOD), Fashionmall (FASH),
Cybersource Corp (CYBS), and Cais Internet (CAIS).
This is the time to leverage up the portfolio and purchase fast-moving
momentum stocks. We will continue to keep you posted as events unfold. The
summer rally is now firmly upon us.
Links to business and financial sites...recommended reading from Amazon
traderjohn.com
The information provided above is believed to be accurate. Earnings and
revenues may be estimated for the purposes of evaluation and comparison. This
letter is a general circulation publication. We do not give investment
advice, nor do we at any time manage or direct the funds of any person or
company other than our own. Positions contained in this report are the
publisher's personal trades, and are not intended as trading advice for
readers. This report is issued solely for informational purposes and content
is not to be construed as being an offer to sell or a solicitation to buy any
security. We do strongly recommend that readers contact their personal
investment advisor or broker for advice pertaining to any investment
questions they might have. The publisher is not a registered investment
advisor, but rather a news editor and a stock trader for his own account.
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