Tom,
I've owned a few "internet" stocks but they aren't the stocks I would consider AIMing. I made quite a bit of money on ONSL riding it up and selling when I was in the hospital <grin>. Now it is almost busted stock.
I owned NETG for a while and took a small gain right before the rest of the world "discovered" it. Went from $20 to $60 to $19 in a very short time span.
What I think is there are some internet related stocks you could AIM, but honestly the "valuation" criteria is more taking and keeping market share than in actual eps or any other typical numbers that could be extracted.
I'm flat out not good enough to find the next big winner although I came close with SCAI (internet banking).
One problem with AIM might be that you acquire the stocks on the way down. With internet stocks that could be deadly.
So which ones would I consider? YHOO, AOL, CMGI, SFE, DCLK, EGRP probably in that order. Let me give you a reason and warn you that I don't own any of these.
YHOO - good management which is using stock price to accumulate other internet properties. That's smart. If you can't grow it, buy it, especially if you have the money in the form of grossly inflated stock price.
AOL - only about 20% of the people in the US are on the internet with any regular basis and most of these are at work (must do wonders for productivity). The entry level ISP is without a doubt AOL.
CMGI - like owning a basket of these stocks. Take a look at their holding and you should recognise the names we use every day.
SFE - another internet company incubator, but with a younger and less seasoned base. We have been recommending this on Confirmatory Analysis.com for a few months. First trade was $37 to $110 in 6 weeks, exiting and buying it back at $81 with a new price projection of $155. Underwater on second trade.
DCLK - perceived leader in internet advertising. I say perceived because it appears to be gaining market share from NETG and able to hold off new public entries like AdForce. Remember, first to market, leadership perception are very important traits to watch for.
EGRP - The only reason I include EGRP is they are going to change the way the public interacts with brokers. Unlikely to go bust. Could easily be the Schwab of the next 10 years.
There are 6 that I would consider. Like I said I don't own any of these as they scare the heck out of me. I like earnings. Guess I'm old fashion.
One internet related issue I own is PSIX. They create Virtual Private Networks for businesses. They are an international company with a divisions in europe and latin america. Think of them as an ISP for business.
I did buy a grand total of one "internet IPO" the other day. Media Metrix (MMXI) is the leader in independently rating website traffic and that will become more and more important as ad revenue increases and the web becomes more like television than we can imagine. I bought 100 shares at $50 (which shows my timing and my fear). The other day it was $32 and now it is in the mid $40's.
The safest internet play I can think of is BRCM, but that is hardware and not what you were looking for. BRCM = bandwidth and particularly bandwidth related to cable access. Astronomical p/e. Astronomical growth.
I think there are many many ways to play the internet. Not all of them are "internet stocks" per se. In the first phase of the internet, the obvious choices were not the Yahoo!s or AOL's of the world, but the Cisco's who provided the hardware. Now we are at the point where the software and content area starts to grow more rapidly than the hardware expansion. Consequently, I'm more interested in companies that allow other companies to be on the internet vs. the hardware plays I talked about last October. Some of these companies even have earnings. <grin> I've been building a completely new portfolio of these over the past 5 months. So far so good and not too many errors.
One last item. I receive this to try to keep a handle on this area. You can sign up also. REGISTER NOW: To automatically receive the Weekly Web Report via e-mail, please register at internetstocks.com.
This is the guy that made the call this morning that the "bottom" was in on this group.
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Dave |
