"Halftime Reports"--Multex/MarketGuide:>>>Top picks for 2000 recap
by Wendy Cholbi
June 27, 2000
At midyear, the five Wall Street research providers that made predictions in January are nearly split equally in terms of advancers and unchanged issues over laggers for long-term picks. By June 23, of the 112 companies picked as the year's winners, 46 stocks have already seen net increases of more than one percent, while five are trading at approximately the same price as they were at in January. Many in this "unchanged" group experienced drastic volatility before returning to their "starting" price.
At the beginning of the year, before the broad market roller coaster and the spring's dot-com shakeout, Multex Investor reported on five research providers' top picks for the year in an article entitled "Top Picks for 2000."
The players made their calls for the year, so now we're ready for a healthy dose of halftime commentary.
Dain Rauscher Wessels
At halftime, the leader is Dain Rauscher Wessels. Out of 26 picks, the company had 14 gainers, 11 losers and one remained virtually unchanged.
Of the four DRW picks singled out in Multex Investor's "Top Picks" article, three have devalued since January: Citrix Systems (CTXS), Healtheon/WebMD (HLTH) and InfoSpace (INSP)
Citrix Systems was on a roll until the company's June 9 warning that it would significantly miss earnings estimates, which triggered a massive stock slide, a burst of analyst downgrades, and a slew of shareholder lawsuits.
In a June 9 research report, DRW analyst Sarah Mattson lowered her price target from $135 to $90 and her rating from "strong buy" to "buy." The following Monday, Mattson again lowered her price target, this time to $40, but defended her "buy-aggressive rating." The next day, Mattson issued another follow-up report explaining why she was still a long-term fan of the company.
Healtheon/WebMD Corp. lost 60 percent of its value in the tech stock shakeout. In a June 19 research report, DRW analyst Jeffrey Peters maintained a "neutral" rating on HLTH, while praising the restructuring of its planned purchase of Medical Manager/CareInsite (CARI) due to HLTH's lower stock price.
InfoSpace.com's stock hit its high in March, split twice in the first half, and continues to trade above its January price. In a June 21 research note, DRW analyst Peggy Ledvina responded to a Barron's article predicting that several companies would burn through their cash reserves, including Infospace.com. Ledvina maintained her "strong buy-aggressive" rating on the stock, saying Barron's was overly pessimistic.
Company:
6/23/00
1/3/00*
Price change from 1/3
% change from 1/3
PDLI
172.625
69.25
103.375
149.28%
REMC
47.821
22.25
25.571
114.93%
ADI
90.625
45.0938
45.5312
100.97%
HGSI
145.375
78.9688
66.4062
84.09%
PDE
25.1875
13.9375
11.25
80.72%
UTI
37.125
22.5625
14.5625
64.54%
APC
50.125
32.6875
17.4375
53.35%
SIVB
38.8125
26.5
12.3125
46.46%
MDT
47.5625
34.25
13.3125
38.87%
EAT
28.625
23.5
5.125
21.81%
BEAS
42.0625
34.8125
7.25
20.83%
CID
19.25
16.25
3
18.46%
ITWO
111.375
94.2656
17.1094
18.15%
BOL
75.625
65.0625
10.5625
16.23%
BBBY
32.9375
33
-0.0625
-0.19%
INSP
52
53.185
-1.185
-2.23%
CVC
69.75
77.5625
-7.8125
-10.07%
CACS
50
63.5
-13.5
-21.26%
MIPS
34.4375
51.625
-17.188
-33.29%
AGIL
61.6875
107.281
-45.594
-42.50%
SCNT
47.0625
85.125
-38.063
-44.71%
INPR
6.75
13.9375
-7.1875
-51.57%
LATD
10.625
27.875
-17.25
-61.88%
HLTH
13.875
38.6875
-24.813
-64.14%
CTXS
18.6875
64.0625
-45.375
-70.83%
XACT
7.75
26.7188
-18.969
-70.99%
*1/3/2000 prices reflect adjustment for splits, but not dividends
The Motley Fool
In second place, with a little less than half of its picks trading above January 1 prices, is The Motley Fool. This research provider doesn't issue recommendations like "buy" or "sell" but provides independent research that allows investors to draw their own ratings and conclusions. By June 23, out of the 17 stocks the Fools picked at the beginning of the year, eight stocks are winners (including one company that was acquired) for the first half of 2000 and nine are losers.
As noted in "Top Picks for 2000," Motley Fool writers predicted a good year for biotech, singling out Genentech, Inc. (DNA) as a possible performer ? and indeed, the stock has risen about 10 percent since January, although it hit its peak in March.
The Motley Fool also noted that Amazon.com (AMZN) was well-positioned to become a dominant force in electronic commerce. While the stock has lost about 50 percent of its value since January, that prediction is being borne out daily, as the online retailer continues to roll out new product lines and leverage powerful strategic partnerships. Indeed, in a May 18 report, analyst Paul Larson reviewed Amazon's first quarter and noted that although the stock has fallen from earlier highs, the online bookseller is still far better positioned than other online pure-plays that are facing extinction.
Company:
6/23/00
1/3/00*
Price change from 1/3
% change from 1/3
WLA**
129.75
81.937
47.813
58.35%
INTC
134.375
87
47.375
54.45%
SYK
39.625
34.1875
5.4375
15.90%
TROW
40.625
35.125
5.5
15.66%
TR
37
32.125
4.875
15.18%
OSI
28.4375
25.4375
3
11.79%
DNA
150.063
136
14.0625
10.34%
AGY
16.125
15.5
0.625
4.03%
FUN
18.6875
18.9375
-0.25
-1.32%
DELL
47.4375
50.875
-3.4375
-6.76%
GTW
58.25
69.562
-11.312
-16.26%
CACS
50
63.5
-13.5
-21.26%
ESPI
4.4844
6.5
-2.0156
-31.01%
AOL
53.5
83
-29.5
-35.54%
YHOO
125.313
237.5
-112.19
-47.24%
AMZN
33.875
89.375
-55.5
-62.10%
PPOD
3.125
9
-5.875
-65.28%
*1/3/2000 prices reflect adjustment for splits, but not dividends
** acquired by Pfizer- (PFE); stopped trading 6/19
Bear Stearns
In third place is Bear Stearns. By June 23, out of their long-term 21 picks for 2000, 13 are first-half decliners in stock price and eight are gainers (including one acquisition).
Of those companies highlighted in "Top Picks for 2000," America Online (AOL) and Fannie Mae (FNM) are losers and EMC Corp. (EMC) is a halftime winner.
AOL has seen a steady price decline since announcing its acquisition of Time Warner (TWX). And although Fannie Mae's stock dropped sharply in March, it has nearly recovered its January price level. In a June 13 research report, analysts David Hochstim and Scott Coren maintained their "buy" rating, citing FNM's demonstrated expertise in managing interest-rate risk as well as continued improvement in already-excellent credit quality and declining delinquencies.
EMC Corp., on the other hand, has climbed steadily since January, hitting a new 52-week high of 80 recently, and closing at $76 on June 23. In a June 13 research report, Bear Stearns analysts Andrew J. Neff and Naveen Bobba reiterated their "buy" rating and maintained their estimates on EMC. They say, "[EMC is] THE way to play the high growth market opportunity in intelligent storage...EMC is the only vendor that offers end-to-end storage solutions in terms of hardware, software and service/support."
Company:
6/23/00
1/3/00*
Price change from 1/3
% change from 1/3
PBG
26.75
16.5625
10.1875
61.51%
INTC
134.375
87
47.375
54.45%
EMC
76
57
19
33.33%
SFX
44.3125
34.1875
10.125
29.62%
Q
52.375
42.125
10.25
24.33%
VIAB
64
56.9375
7.0625
12.40%
TWX
77.5625
71
6.5625
9.24%
BSYS
62.25
63.0625
-0.8125
-1.29%
DRI
16.625
17.3125
-0.6875
-3.97%
FNM
55.9375
58.9375
-3
-5.09%
VOD
43.9375
49.5
-5.5625
-11.24%
KMB
54.9375
63.274
-8.3365
-13.18%
USAI
23.3125
27.1875
-3.875
-14.25%
SLR
39.375
46.125
-6.75
-14.63%
ACS
34.0625
45.625
-11.5625
-25.34%
IMMR
24.375
37.5625
-13.1875
-35.11%
AOL
53.5
83
-29.5
-35.54%
TEX
13.5625
26.5
-12.9375
-48.82%
TMCS
16.6875
36.125
-19.4375
-53.81%
PSDI
25.125
54.5625
-29.4375
-53.95%
CBS
Merger with Viacom (VIA) May 3, 2000
*1/3/2000 prices reflect adjustment for splits, but not dividends
Brown Brothers Harriman
Brown Brothers Harriman issued the most comprehensive report, which covered 144 companies in total, but only rated 49 companies as long- and short-term "buy/buys" or "buy/strong buys." Of which, 30 have lost value, 14 have gained in value (including one acquisition), while three are virtually unchanged.
A bright note: BBH was the only research provider out of the five surveyed in January to raise the possibility that the markets could turn bearish. That prediction was borne out in mid-April when the markets suffered a steep decline.
Company:
6/23/00
1/3/00*
Price change from 1/3
% change from 1/3
TEVA
54
17.4804
36.5196
208.92%
UTC***
146
78.937
67.063
84.96%
PHA
53.0625
35
18.0625
51.61%
SLB
74.5
54.9375
19.5625
35.61%
SCH
32.75
24.6502
8.0998
32.86%
BK
46.1875
37
9.1875
24.83%
HAL
47.5625
38.3125
9.25
24.14%
ABT
40.4375
35
5.4375
15.54%
PEP
42.0625
36.875
5.1875
14.07%
BBY
63.5625
57.75
5.8125
10.06%
CNI
27.8125
25.8125
2
7.75%
EMR
61.0781
57.5625
3.5156
6.11%
SYY
40
38.125
1.875
4.92%
GLX
56.875
55.5625
1.3125
2.36%
FDC
49.125
49.0625
0.0625
0.13%
GE
49.875
49.8529
0.0221
0.04%
MO
23.4375
23.4375
0
0.00%
KRB
26.5625
26.9375
-0.375
-1.39%
IBM
111.875
116
-4.125
-3.56%
IBI
19
20.1271
-1.1271
-5.60%
DELL
47.4375
50.875
-3.4375
-6.76%
TJX
18.5625
20.3125
-1.75
-8.62%
UTX
57.0625
62.5
-5.4375
-8.70%
UNP
39.0625
43.0625
-4
-9.29%
CL
55.5625
62.25
-6.6875
-10.74%
CLX
42.75
49.1875
-6.4375
-13.09%
TAN/RSH**
46.4375
54
-7.5625
-14.00%
SLE
18.125
21.25
-3.125
-14.71%
NYT
40.875
48
-7.125
-14.84%
SOI
12.625
15.125
-2.5
-16.53%
JNY
21.25
25.5625
-4.3125
-16.87%
CSC
74.6875
93.25
-18.563
-19.91%
UIS
24.9375
31.375
-6.4375
-20.52%
NKE
37.0625
48.125
-11.063
-22.99%
LOW
42.125
55.75
-13.625
-24.44%
GCI
59.3125
78.6875
-19.375
-24.62%
ACS
34.0625
45.625
-11.563
-25.34%
CC
33.875
45.4375
-11.563
-25.45%
SPLS
15.1875
20.625
-5.4375
-26.36%
HD
48
65.1875
-17.188
-26.37%
CNF
23
31.8125
-8.8125
-27.70%
GPS
28.6875
43.125
-14.438
-33.48%
HON
34.6875
56.6875
-22
-38.81%
EDS
39.3125
65.0625
-25.75
-39.58%
ODP
6.1875
10.5625
-4.375
-41.42%
IP
31.125
55.5
-24.375
-43.92%
PG
54.9375
107.188
-52.25
-48.75%
TOM
6.5
20.75
-14.25
-68.67%
** name/symbol change effective 6/1/00
*** stopped trading June 1; acquired by Charles Schwab (SCH)
SSInvestor.com
SSInvestor.com's "10 Stocks Priced Right for 2000 and Beyond" yielded seven decliners and three advancers.
Of the companies singled out for inclusion in Multex Investor's "Top Picks for 2000," one first-half hit was Merck & Co. (MRK). According to the Multex Investor database, SSInvestor.com had not issued new ratings on these stocks.
Company:
6/23/00
1/3/00*
Price change from 1/3
% change from 1/3
WLA**
129.75
81.937
47.813
58.35%
MRK
72.625
67.625
5
7.39%
KO
57.875
56.375
1.5
2.66%
BRKA
54400
54800
-400
-0.73%
KRB
26.5625
26.9375
-0.375
-1.39%
FNM
55.9375
58.9375
-3
-5.09%
IBI
19
20.1271
-1.1271
-5.60%
DELL
47.4375
50.875
-3.4375
-6.76%
MSFT
77.6875
116.563
-38.875
-33.35%
ANF
10.875
27.5
-16.625
-60.45%
*1/3/2000 prices reflect adjustment for splits, but not dividends
** acquired by Pfizer- (PFE); stopped trading 6/19
With six months left to go in 2000, the halftime commentary only reveals part of the story: Research providers note that their picks are intended for long-term investors. Tune in for stock predictions for the next half of the year Thursday, June 29, when writer Peter Nelson reports on analyst recommendations for the remainder of the year.
Companies mentioned in this article
Citrix Systems (CTXS)
Healtheon/WebMD Corp. (HLTH)
Medical Manager/ CareInsite (CARI)
InfoSpace.com Inc. (INSP)
Pfizer (PFE)
Charles Schwab (SCH)
Merck & Co. Inc. (MRK)
Fannie Mae (FNM)
EMC Corp. (EMC)
America Online Inc. (AOL)
Genentech Inc. (DNA)
Amazon.com Inc. (AMZN)
Time Warner (TWX)
Reports mentioned
Report on CTXS 6/9/00 Dain Rauscher Wessels
Report on CTXS 6/12/00 Dain Rauscher Wessels
Report on CTXS 6/13/00 Dain Rauscher Wessels
Report on HLTH 6/13/00 Dain Rauscher Wessels
Report on INSP 6/21/00 Dain Rauscher Wessels
Report on FNM 6/13/00 Bear Stearns
Report on EMC 6/13/00 Bear Stearns
Report on AMZN 5/18/00 The Motley Fool
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