ChangeWave, a popular Wall Street newsletter published by Tobin Smith, who is a regular guest on Fox News Financial programs, recommended INAP after the market closed on Wednesday, December 24.
Even though his newsletter is pretty expensive, about $2495/year and they try to prevent disclosure of its contents, someone posted what it said on Yahoo's INAP board.
According to the poster in Yahoo, this is some of the comments that were made:
Internap Network Services is a fantastic play on the explosive growth of IP communications and managed e-commerce connectivity -- the mix of voice and data over the web for business and consumer markets.
Here's why. What these guys do that NO ONE else in the IP connectivity space does is deliver high grade transport for the key packets over the Internet: Orders, private communications and soon voice over Internet protocol (VOIP).
What they do is buy connectivity from ALL the major players and use their technology to manage their customers data around all the bottlenecks and hazards that exist on the public Internet.
They route packets down every major Internet network as if it was ONE big seamless system and not 25 different backbones and 10,000 local networks.
Think of what this means to a VOIP player. The ONLY way to manage the end-to-end packetized voice is to use INAP's system or have calls begin and end on ONE network - something that's' very, very unlikely.
A look at who uses these guys reveals a Who's Who of global
companies: Charles Schwab, Ameritrade, Morgan Stanley, Equifax, Disney,Ticketmaster, Fox, New York Times, United, American Airlines, Delta, JC Penney, CompUSA, Wal-Mart, Toyota USA, Nextel, DHL, Callaway Golf,Sharp, Ebay, , Microsoft, Gateway, Sun Microsystems and Apple,just to name a few.
Why? Because they know that they cannot afford to LOSE one order or phone call or video conference due to lousy Internet network management.
Internap is a company that came back from the dead as a strong, lean machine that is kicking ass and taking names in their space.
Last week, Keynote Systems showed that Web sites of the busiest e-commerce sites lost more than 1% of sales due to heavy traffic for the holidays. This is INAPs selling point. They can use their proprietary routing to eliminate these problems -- it's like profit insurance.
The slight additional cost to use them for connectivity services vs. one that is unmanaged is paid back three to five times every month with orders that are not lost.
Management did a great thing by moving these guys to a low-cost area like Atlanta and got their financial house in order.
They are now cash flow positive, growing revenues at a higher rate each quarter, and should see revenues of $250 million a year by the end of 2004.
As VOIP service providers start to need the higher quality of their network systems, I see VOIP as the secret sauce to MUCH higher rates of growth in both voice and video conference connectivity.
Internap is a buy under $2.50. I think it will be a $5 stock by the end of 2004 and is an excellent acquisition target as well.
Bernard |
