Sterling Growth with E-Commerce (SE)
Monday, April 12, 1999
Most of the buzz about e-commerce relates to consumer sales,
but Dow theory advisor Rich Moroney says business-to-
business is where most of the real action is. Companies
doing business electronically can lower inventories, enhance
customer service and reduce marketing expenses. Analysts
estimate business-to-business e-commerce will grow from $15
billion in 1998 to $175 billion by 2000.
Moroney recommends Sterling Commerce (SE), a leader in e-
commerce software. Sterling enjoys roughly $500 million in
annual sales from over 42,000 customers, including 95 out of
the 100 largest US firms. The firm recently introduced an
array of e-commerce products designed for Internet users,
and Moroney says sales of these products should more than
compensate for any lost revenue in its network services
segment. He goes on to say that Microsoft's new line of e-
commerce solutions "appears to complement more than threaten
Sterling's offerings."
Since its March 1996 IPO, Sterling grew sales 34% and net
income 39% annually. "An impressive customer list, broad
international exposure and strong finances qualify the
company as one of the best pure plays of electronic commerce
solutions," Moroney says. He recommends investors buy the
stock for 18-24 month gains.
For more on Rich Moroney's recommendation see "Analyst's
Choice," April 12, 1999, Dow Theory Forecasts. The weekly
publication uses the time-tested Dow Theory to provide award
winning stock picks and portfolios.
investools.com
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