The Individual Investor's Analyst
Why NTPL Is Our Top Pick For The Year 2000 With a target price of $50.
As we move forward into the Year 2000, we remain very bullish on Netplex,
which is our top stock pick.
Here are our reasons why we believe the stock price will appreciate.
NTPL At NRF Show
NRF stands for the "National Retail Foundation," which holds its annual
trade show in New York City January 16th. Netplex will set up a display to
generate new business, gain exposure and meet existing retail clients,
which number well over 100. This show is the most significant event of the
year for anyone in the retail industry.
The Pam Fredette Effect
Yesterday, you see a new $750,000 contract announcement for E-Solutions.
Did you know that NTPL's E-Solutions business has been growing at an
astounding 100% rate per year?
However, we expect to see this doubling of revenues to be spurred by the
well-liked Pam Fredette, who became president of NTPL in May of 1999. Now
that her non-compete clause from her previous company has expired (on
December 31, 1999), look for Pam to leverage her experience and contacts
as she pursues the financial services market in the New York area, her
home turf. E-Solutions has a great team of professionals and with Pam,
we'll see many new big contracts or alliances with major firms.
The Techcellence Effect
As Pam spurs the fast-growing E-Solutions business to even higher growth
rates, Gene Zaino is putting on his cowboy boots to get Techcellence into
full gallop. Techcellence is NTPL's much-copied new subsidiary that acts
as a "back office" (also called a virtual corporate infrastructure) for
independent IT (Information Technology) professionals, who number in the
millions in this country.
Techcellence has tremendous potential on its own. We must not forget the
possibility of an IPO spinoff this year, which would benefit shareholders
and the stock price.
B2B Play
Techcellence is a B2B-- business-to-business-- company, which is in a hot
sector and one which is the leader in its field. Here are three links to
new companies that are moving into this hot new field of the corporate
back office. These three companies have filed the S1 form to go public.
opus360.com
onvia.com
niku.com
More B2B
Many new companies are starting to become a back office to many different
industries. This shows this industry is going to be a hot issue of 2000,
and since Techcellence already has a big footprint for the IT
Professional, we believe Techcellence will emerge as a leader in back
office space for other industries, as well. NTPL expects that Techcellence
will move into other professions.
Opus 360
When Opus 360-- a company which tried to buy Techcellence-- comes to
market with their "Freeagent.com" early this year, it will bring major
attention to Techcellence, the prototypical corporate back office company.
Techcellence, which was internet-enabled from NTPL's "Contractor's
Resources" subsidiary, is already making money and growing revenues. If it
goes IPO, it should easily surpass the Opus 360 IPO.
Hot Office
Hot Office, in which Staples has a big stake, is a privately held company
with a Techcellence type corporate back office structure, proving once
again this B2B infrastructure is a money machine. Their web site is
www.hotoffice.com
Investment Boosts
We believe the combination of a fast growing E-Solutions business combined
with the hot new Techcellence B2B play will spark tremendous interest from
many institutions, mutual funds (especially internet funds), and
individual investors.
Analyst Coverage
With such success, there is little doubt we will see analysts initiate
coverage on NTPL this year, which will give the stock another big boost in
interest.
Qualified For National listing at the NASDAQ
NTPL stock has surged to a level in which it could qualify to move out of
the ranks of small cap companies very soon, at which time we might see the
stock qualified for options trading. NTPL will be a marginable security
soon, which will give the stock another tremendous investment boost.
Links To Job Sites
Already, NTPL has teamed with Skillsvillage.com. As the year progresses,
we look to see more deals of a similar nature with job sites on the
internet. These deals will grow the IT base of professionals for
Techcellence.
Buyout Possibilities
Techcellence is a very strong candidate for a take over or a complete
buyout. Even though management has said many times they are not interested
in selling the company, if the price was high enough, we are sure NTPL
would make shareholders happy. How much per share could NTPL fetch? We say
at least $70 a share because this would be equivalent to a $1 billion
market cap, the price of NTPL's competitors.
As an example, another company in the same kind of business as NTPL is
Xpedior Incorporated, <XPDR> which went public on December 15, 1999.
Xpedior Incorporated provides innovative, comprehensive e-Business
solutions for Global 2000 companies and emerging digital businesses. Guess
what its market cap is? It's over a billion dollars. NTPL has a market cap
of only $157 million.
The Netplex Area
Who would be a potential buyer of NTPL? We conjecture it could be a
company like CMGI, which has been gobbling up internet-related companies,
especially B2B. Or, if there is not buyout, we can "read between the
lines" and see big deals on the horizon from one or more of the companies
in the "Netplex" area of Reston, Virginia.
Did you know that in 1994 "Fortune" magazine dubbed the Washington
D.C./Northern Virginia/Maryland area as "the Netplex" because this is
where the internet got started and has flourished?
This catch phrase for internet companies really gives NTPL a "brand Name"
that none can surpass. This is very important to the success of Netplex.
What is a netplex? It is a grouping of internet companies in the same
area, the same as a metroplex is a group of cities in a certain area.
Dallas-Ft. Worth is a metroplex, for example. The Reston, Virginia area,
home of Netplex, is a netplex of internet companies, in this same general
geographical area around Washington D.C., and stretching across the
Potomac to include Northern Virginia. Oracle, America Online, CompuServe,
PSINet, Digex, Uunet and a host of internet companies got started in this
area and anyone of them could make big deals with NTPL.
Testimonial
Peter Lynch, one of our favorite business authors, says words to the
effect, "Behind every stock, there is a company, and the stock will only
do as good as management." We recently got reinforcement on both Gene
Zaino and Pam Fredette via an E-mail from a former Netplex employee. Here
it is for you to read in its entirety, as the sender gave us his consent.
Hello sshia,
Yes, I am a former Netplex employee. You are quite correct in your
assessment of the level of respect, or lack thereof, that Netplex gets on
the street. I believe that the primary reason is that, as a result of
going public through a reverse merger rather than an IPO, Netplex did not
receive the visibility early on that would have attracted the kind of
attention it deserved. I should tell you that even though I decided to
leave Netplex, I am very high on the company. Gene is one of the smartest
business people I have ever worked for. I spent almost 16 years at GE, and
had an opportunity to work for some great managers, including a couple who
are candidates to succeed Jack Welch. I can honestly say that Gene has
many of the qualities that I saw in the best executives at GE. Although I
only worked for Pam for a relatively short period of time, I have a great
amount of respect for her. She is the right person for the job. I believe
that she can take Gene's "baby" and nurture and grow it to phenomenal
success.
Within the bounds of my non-disclosure agreement with Netplex, I will be
happy to answer any specific questions that I can. I am encouraged by the
recent activity in the stock, and expect more good things to happen in the
future.
Ups & Downs
Please, do not be concerned about the short term ups and downs of the
stock price of NTPL. This is true with any of our stock picks, which are
long term investments. We have said before if you are the type of investor
who wants to buy one day and sell the next on hot tips, then we definitely
are not the analyst you are seeking.
SSHIA's picks are in the Peter Lynch/Warren Buffet style, meaning good
companies which you can hold. We will continue to monitor the goings-on
inside the company so that if a fundamental change occurs and we think it
is time to sell, then we will let you know.
The Netplex story, as this newsletter has today reiterated, continues to
get better and better, so the stock price will continue to go up.
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Thank you
Finally, we extend our thanks to our Hundreds of subscribers. Many of
them are elated with their gains in the market from our picks. This is a
full time job for us. |
