OJ & All Nut Fans ~ Re: EGGS & MCOM
Beware ~ The following is hot off the press at TheStreet.com site:
Silicon Saturday: Egghead.com, Cytyc, Metricom
By Laure Edwards
Special to TheStreet.com
11/28/98 12:15 AM ET
A selection of some of the most intriguing tech stock ideas
on the Web. The items presented do not represent the views
of TheStreet.com; rather, the collection is offered as a
service to our members who may be scanning the Web for
stock-related information.
Egghead.com
Steve Harmon (11/23)
Egghead.com (EGGS:Nasdaq) has made the transition
from brick and mortar to virtual space, but it has yet to
produce any golden eggs, says Internet stock analyst Steve
Harmon.
Egghead's loss for its latest quarter rose to $7.2 million from
$4.9 million in the year-ago period, reflecting its
"startup-like" status in converting to a virtual retailer. Harmon
forecasts 1999 revenue of $195 million (vs. $140 million for
1998), in which case the stock trades at about 1.6 times
next year's revenues vs. a multiple of 5 to 10 for other
Internet retailers.
Harmon is not as enthusiastic about the company's bid to
sell noncomputer and nonsoftware items, such as sporting
goods. "We applaud Egghead's move to ... Internet
commerce," says Harmon, "but give it a thumbs down on
trying to be a general purpose e-tailer."
More information can be found at: www.internetnews.com
Cytyc
Online Investor (11/23)
Cytyc's (CYTC:Nasdaq) ThinPrep Pap Test is significantly
more effective than conventional pap smears in screening for
cervical cancer, according to the Food and Drug
Administration. The product is a "potential blockbuster,"
says Online Investor, although it has been a long and
bumpy road to acceptance among insurance companies.
Last month, the company reported that 103 insurance
companies cover ThinPrep's use, so progress is being
made. The company also reported strong third-quarter
earnings; sales were $12.3 million vs. $7 million a year
earlier. Full-year sales next year are forecast to be between
$75 million and $100 million.
If revenues continue to rise at that rate, "Cytec's profits
should soar," says Online Investor. Gross margins on the
company's disposable products are around 75% to 80%.
ThinPrep could ultimately be worth $300 million to $500
million a year in revenues, a potential gold mine for a firm
with a current market cap of less than $300 million, says
Online Investor.
More information can be found at: fnews.yahoo.com
Metricom
Adam Lashinsky (11/20)
Metricom (MCOM:Nasdaq) is a provider of wireless Internet
service with nationwide ambitions. Currently, though, its
service reaches only the San Francisco Bay area,
Washington, D.C., Seattle and several airports. Billionaire
investor Paul Allen has invested heavily in the company,
but San Jose Mercury News columnist Adam Lashinsky
advises this is not one of those opportunities where it pays
to invest on the heels of big money.
The company is running out of operating cash, says
Lashinsky, and has engaged NationsBanc Montgomery
Securities to find it a strategic partner. This is tantamount
to putting the company up for sale, he says, though
Metricom CEO Timothy Dreisbach says it's not so. The
management team simply doesn't have the time to evaluate
potential partners, he says.
Metricom stock, which traded above 18 late last year, is now
at 7 1/2. He also warns that Metricom's need for more
money is "likely to dilute the interests of current
shareholders."
More information can be found at: fnews.yahoo.com |
