The hottest b-to-b stock picks
March 29, 2000
by Adam Feuerstein
With business-to-business commerce booming, Upside consulted
several analysts and forecasters to pick their hottest stocks of the
moment. Here are a few of their picks:
Net market constructors (the software and technology providers
that are creating the platforms for b-to-b commerce):
Ariba (ARBA), Commerce One (CMRC), Oracle (ORCL), i2
Technologies (ITWO)
The competition between these companies is fierce, as each tries to
become the dominant builder of Net marketplaces. It's still early in the
game, but investors have flocked to these stocks as the best way to
profit from the b-to-b boom.
Ariba and Commerce One are the upstarts of the
bunch. Both went public last summer in zooming IPOs
that continue to sizzle. Commerce One was the
second-best performing new offering of 1999, and has
risen 2,800 percent to date. Ariba is right on its heels,
up 2,200 percent since its debut.
Among Commerce One's biggest deals: a blockbuster Net marketplace
for the auto industry being spearheaded by General Motors (GM),
Ford (F) and DaimlerChrysler (DCX). This week, the company is
expected to announce a landmark deal in the aerospace industry
involving Boeing (BA), Lockheed Martin (LMT), Raytheon
(RTNA) and British Aerospace.
Ariba can match Commerce One deal for deal, including Dell (DELL),
American Express (AXP), Chevron (CHV). The company also inked
a technology and marketing partnership with i2 Technologies and IBM
(IBM) to develop e-business services.
Oracle's Larry Ellison is a master marketer, and he has almost
single-handedly transformed his company from an enterprise software
maker into an e-business leader. Oracle's b-to-b offerings are red-hot.
The company is teaming with Commerce One on the auto industry
marketplace, and has inked separate deals with Wal-Mart (WMT),
Sears (S) and others.
Wall Street likes Oracle's new e-business persona, pumping the stock
up 300 percent in the last five months.
Never heard of i2 Technologies? How about this for an attention
grabber: its stock is up 782 percent since April 1999. Founded 12
years ago, i2 developed and sold supply-chain software, not making
much of a ripple. But then the company moved into the b-to-b sphere,
developing technology that helps companies manage online their entire
supply chain process -- from the purchasing of raw materials, to
manufacturing and then on to distribution.
Earlier this month, i2 announced plans to purchase Aspect
Development Inc. (ASDV), another b-to-b software provider, in a
stock deal valued then at almost $7 billion.
The Net market makers (the deal-makers whose transactions
drive the market):
VerticalNet (VERT), Freemarkets (FMKT), Internet Capital
Group (ICGE)
VerticalNet owns and operates more than 55 industry-specific
marketplaces. The company's performance is typical of the mania
surrounding b-to-b e-commerce: It went public at $16 per share last
February and finished its first day of trading at a respectable, but not
earth-shaking, $45.38. Since then, the stock has risen sharply -- up
2,275 percent from its IPO price.
Internet Capital Group is the Big Daddy of all b-to-b plays. Like
CMGI (CMGI), Internet Capital Group is a holding company that
owns outright, or makes partial equity investments in, both public and
private Internet companies. But unlike CMGI, Internet Capital Group
focuses solely on b-to-b plays, including VerticalNet.
To date, the company has invested in nearly 60 companies, most of
which are still privately held, but some, like VerticalNet, eMerge
(ENRG) and Onvia (ONVI), have gone public themselves.
Internet Capital Group (ICGE) was one of the hottest IPOs of
1999. Since its debut last August, the stock is up more than 1,700
percent.
FreeMarkets (FMKT) creates online auction marketplaces for
industrial parts, raw materials, commodities and services. The company
created online auctions for over $2.7 billion worth of purchase orders
in more than 70 industries, including chemicals, printed circuit boards
and molded plastic parts.
Earlier this month, it acquired iMark (IAK.TO), an Internet auctioneer
of surplus industrial equipment, for $324 million. The company's stock
is up 281 percent since its December 1999 public offering.
Adam Feuerstein covers e-commerce for UpsideToday. Reach him
at adamf@upside.com.
|
