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To: QuietWon who wrote (56)	8/20/1999 12:55:00 AM
From: QuietWon	Respond to of 144

Article in SmartMoney & Dow Jones: item 1 of 2 August 18, 1999 Part Two: Institutional Darlings By Paul R. La Monica DID YOU EVER notice that film critics tend to pan most of the movies the general public flocks to? There weren't too many glowing reviews of the latest Star Wars installment, but the movie has grossed more than $415 million at the box office. Americans also seem to be ignoring the judgments of the pros when it comes to Internet stocks. Individual investors, it seems, can't get enough Net stocks -- even though professional money managers, the folks whose job is to pick stocks for diversified mutual funds, have scorned many high-profile dot-coms. You're not going to see Fidelity's fund managers, for example, rushing to buy a "hot" Internet stock just because a Wall Street brokerage firm initiated coverage with a Strong Buy and issued an outlandish price target. Few fund managers are willing to bet their reputations on an unproven company in a business that is in its infancy. That's not to say fund managers are all hopeless antediluvians who will never embrace the Internet. Institutions have to be buying some Net stocks, right? So what do fund managers like in this volatile and still unfledged sector? We decided to check by screening for Internet companies that have at least 30% institutional ownership. (The average percentage of institutional ownership for the 6,374 stocks in the Zacks database is about 35%.) Of the 137 Internet companies tracked by Zacks, 20 made the cut. Missing from this list of institutional darlings are several high-profile Internet companies. Yahoo! (YHOO) and Amazon.com (AMZN) fell short of our 30% threshold. Institutions own 23% of Yahoo and 26% of Amazon. Another big-name e-commerce company, online auctioneer eBay (EBAY), is even less admired by the pros. Just 12% of the shares are owned by institutions. Maybe all those site outages have scared fund managers away. Some Internet blue chips did make the list. Institutions own more than half of America Online (AOL) and Internet software company BroadVision (BVSN). Mutual-fund managers have also taken a shine to Net investment-holding company CMGI (CMGI) and search-engine software developer Inktomi (INKT). But we thought it would be interesting to take a look at some of the lesser-known Net stocks that mutual-fund managers have been scooping up.

To: QuietWon who wrote (56)	8/20/1999 12:56:00 AM
From: QuietWon	Read Replies (1) \| Respond to of 144

Article in SmartMoney & Dow Jones: item 2 of 2 One group that seems to have attracted a lot of interest is the Internet-hosting companies -- the outfits that help get corporations up and running online. Janus Venture (JAVTX), a fund that specializes in small-cap stocks, is a big holder of three hosting companies that made our list. Exodus Communications (EXDS), Globix (GBIX) and Verio (VRIO). As of July 31, Globix was the fund's fifth-largest holding. Exodus ranked ninth and Verio, 11th. Will Bales, co-manager of Janus Venture, says all three companies are well-positioned to take advantage of an Internet outsourcing trend. Someone has to get companies connected to the Internet and manage their Web pages, and that's often something a company -- especially a non-tech firm -- isn't able to do in-house. That's why he favors these behind-the-scenes Internet companies as opposed to sexier e-commerce plays. It's still much too early to predict who will win out in online retailing, Bales says, with so many sites out there for customers to choose from. "That's somewhat of a crapshoot," he says. "But we do know that traffic is going to grow every year, so we buy companies that enable traffic to get there." Globix is a small company (with a market cap of just $354 million) that focuses on Internet connectivity and Web hosting for midsize and large companies such as Microsoft (MSFT), RealNetworks (RNWK) and Dow Jones (DJ) (a co-owner of this site). Exodus, a midcap company, has a similar approach, with customers such as eBay, Yahoo and Lycos (LCOS). The two companies also have the highest institutional ownership on our list, at 88% for Globix and 74% for Exodus. Verio is more of a low-end host company; its customers tend to be small businesses. Jim Callinan, manager of the Robertson Stephens Emerging Growth (RSEGX) fund likes the company because it has been an active consolidator in a fragmented industry. Last month, for example, Verio agreed to buy digitalNation, a privately held Web-hosting company. As of July 31, Callinan's fund also held Globix and Exodus. Like Bales, Callinan says hosting companies are difficult to ignore given the steady flow of new Internet traffic. "Corporate America is coming onto the Net in droves," he says.