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Strategies & Market Trends : cash-rich dot bombs

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To: stock leader who wrote (17)	12/17/2000 12:40:08 AM
From: blankmind	Read Replies (1) of 184

- Quotsmith.com - QUOT - is an "old line" company using the internet to consolidate & streamline costs - & I think on a path to profits. - cash on hand of $32.1 million, or $1.67 per share - & no debt; yet its share price is $.80 - I think QUOT has a great business model; other sellers of insurance over the internet are either closing up shop or about to, i.e., Quicken just exited the business - QUOT is the #1 seller of term life on the net - QUOT gets residual income when the policyholders renew every year; so at some point, they become a bit like a mutual fund holding company, w/ steady stream of money - As a broker, QUOT takes on none of the insurance risk. The actual insurance companies pay a tiny amount to have their policy offers listed. - Key here is definitely economies of scale - QUOT is expanding into auto & health - which may or may not be good - but they think it's good b/c the name is already out there - so why not incur the incremental cost of additional lines of coverage? - #1 competitor - is Insweb - INSW - but INSW has some problems - 1 3/8 stock price - bought Quicken't insurance site; costly marketing deal w/ Yahoo when rates were sky high; INSW will probably go out of business in 18 months - not a guarantee - but for $.80/share - I think it's worth the risk

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