Doc Stone Year 2000 Picks for 2000 -- Part #2
Tip for Year 2000: If you are hesitant to commit money to a stock, do
this. Decide how much you are willing to put in to a stock, divide that
amount into 3 equal parts, and invest one-third in the stock. If the
stock falls more than 20%, buy with another third. If it goes down
again, buy the last third. But to do this requires a strong level of
conviction about the stock. You have to believe in something!
Priceline.com (PCLN)
Nasdaq: $47 3/8
PCLN is a business-to-consumer electronic commerce company. They offer
a unique service: You purchase goods and services by naming your own
price. The computer software matches buyers and sellers. PCLN started
out with just airline tickets, but now they are offering hotel bookings
and home mortgages. Their newest service is groceries! The potential
market for these services is higher than any of us can count. Yes, the
"auction" space is crowded with EBay, Ubid, Cyberian Outpost, etc. But
the PCLN approach is unique, and they don't sell "junk" like the other
websites.
Target: $200
The Sabre Group (TSG)
Nasdaq: $50
TSG is a massive computerized airline reservation system that has been
in existence since the 1950s. It is 85% owned by American Airlines and
conducts 80% of business with AA. And that's the problem: Few other
airlines will use TSGs (excellent) system for fear AA will use the data
for some competitive advantage. So AA is doing what it should have done
years ago: It is selling off all its TSG holdings to the public. This
will free TSG to get business from other airlines, while keeping AA as a
customer. The potential market is humoungous. In addition, TSG also
owns Travelocity and Preview Travel, the two premier Internet travel
reservation sites! 2000 should be a great year for TSG.
Target: $150
Netsilicon (NSIL)
Nasdaq: $20 1/16
NSIL is a semi-conductor manufacturer that makes "embedded chips".
These chips are tiny computers that carry out preprogrammed functions
that operate machinery. For example, factory automation depends heavily
on embedded chips. A lot of companies make these sort of products
(especially Texas Instruments), but NSIL has an edge: The new Net+Works
embedded controller allows connecting factory floor machinery to the
Internet! So a food chemist in Poughkeepsie can dial up a connection to
a Coca Cola bottling plant in Uruguay and make sure that Machina Numero
6 is mixing syrup in correct proportions. The savings in engineering
consulting, travel and analysis are TREMENDOUS.
Target: How high can you count? No specific target, just big.
Starbucks (SBUX)
Nasdaq: $24 1/4
SBUX is best classified as a "specialty retailer". In just 5 years, it
has achieved a name as easily recognizable as Maxwell House. I strongly
believe in making stock bets based on demographics. And the fact is
that Baby Boomers are a huge group of people with huge amounts of $$.
They do not mind paying extra for the better things in life. And SBUX
offers this in many forms. Management has figured out a way to make a
lot of money in a crowded field with slim profit margins. Besides their
expensive coffee, SBUX is selling ice cream (try it, please!), coffee
flavored drinks (fantastic!) and baked goods. They are expanding coffee
sales by direct mail, through airlines (I believe Delta serves only
Starbucks) and through wholesale clubs (like Costco). The CEO just
announced that they will open up 400 new stores in 2000. And the growth
possibilities in Europe and elsewhere are breathtaking. SBUX introduced
European style coffee drinking habits to America, why not grow in Europe
where they should really be appreciated!
Target: $50
Information Resources (IRIC) or AC Nielsen (ART)
Nasdaq: $9 for IRIC, 24 5/8 for ART
AC Nielsen and IRIC are market research firms. They collect and analyze
survey data on the buying habits of customers in the packaged goods
industries. ART also does media audience surveys. These are the only
two companies in the world doing this. They both have Internet
divisions as well. There is a one billion dollar lawsuit between the
two. If this things gets settled this year, both companies will rocket.
Targets: IRIC $30, no target for ART
And that's it, a baker's dozen of stock picks for 2000. I created a
portfolio containing these stocks at my stock discussion site on the
Silicon Investor. I dollar weighted the portfolio, putting $5K into
each stock. You can track performance by going to:
siliconinvestor.com
If you want to review my 1999 picks (for those of you new to the list
who don't trust me), go here:
Internet Value!
siliconinvestor.com
Wild Ass Speculation!
siliconinvestor.com
Internet Infrastructure:
siliconinvestor.com
Small Cap Turnaround Stories:
siliconinvestor.com
Happy Investing in 2000!
DocStone
(M. Frank Greiffenstein) |
