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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: FR1 who wrote (40759)	5/27/2001 4:05:17 PM
From: puborectalis	Read Replies (1) \| Respond to of 41369

from Barrons... Doug Kass is a hedge-fund manager and a fellow we've known for a slug of years now. What separates him from the pack is that he's compiled an absolutely terrific record these past two and a half years, while so many in the pack have barely kept their heads above water and certainly not above high water. Specifically, on a gross basis -- before the healthy (except for their limited partners) cut of profits that hedge-fund mangers take -- Doug was up 87% in '99, 88% last year, and this year, is ahead by 21%. He works far from the madding crowd in Palm Beach, hard by the blue Atlantic; hence, the name of his fund, Seabreeze Partners. As we've indicated before in this hallowed space, Doug loves to short stocks. Which also helps explains his exemplary performance. A couple of months ago, Doug laid his bearskin aside and began leavening his portfolio with some longs. What he can't lay aside completely, however, is his inveterate skepticism. And last we spoke with him, he described his view of the market as agnostic. (Our favorite definition of an agnostic is someone who says, "I'm an atheist, thank God." But never mind). In any case, Doug has by no means foresworn going short. And his favorite short right now is AOL Time Warner. It's a stock that, to his profit, he had been negative on, covered at $36 to $38 when he thought the market was ready for a big bounce, and recently shorted again. It closed around 53.50 on Friday. Essentially, Doug is convinced that AOL's growth potential is limited by a maturing personal-computer industry and the company's high penetration of the market for its services. By way of support for the latter observation, he notes that this year stacks up as the second in row in which AOL is slated to snare a smaller number of net new additions to its subscription base. Doug also is leery of management's confidence that it is not notably vulnerable to the sick economy. Not only is the Time contingent obviously feeling the impact of droopy ad outlays, but the AOL part of the company, he feels, is hardly immune, either. He sees the recent announcement of a boost in AOL's subscription fees as a response to the softer operating environment. Whether it discourages existing subscribers, or makes it more difficult to attract new ones, remains to be seen. For this year and next, he thinks Street estimates are too high. He expects something like $1.25 for this year and $1.45 for next. That means the stock is selling at 44 times '01 earnings and 38 times next year's. Which makes it pretty darn rich. Also noteworthy is that management has been selling stock hand over fist. There are many reasons, to be sure, for insider sales. But a strong belief that the shares are headed higher is rarely among them

To: FR1 who wrote (40759)	6/4/2001 4:21:19 PM
From: im a survivor	Read Replies (1) \| Respond to of 41369

Scott Kessler is the Internet stock analyst for Standard & Poor's Investing Q&A Q: How do you see the overall stock market right now? Cautiously optimistic for the next 6 to 12 months Interest-rate cuts coupled with the recently enacted tax cuts will prop up the economy He sees renewed growth beginning in the second half of 2001 Q: On Net stocks, do you see any prospects for a recovery? Internet stocks have bounced quite nicely off the bottom achieved on April 4th The sector is up some 52 percent since that low We are at the beginning of a long-term bullish period for many of these stocks Q: What Net stocks have shown the best bounce? Several stocks that have held up relatively well in this environment including buy-rated stocks such as: ADBE AOL DCLK Q: One analyst told us last week that he hears anecdotal evidence that Internet advertising is starting to revive My checks have indicated similar information I have upgraded to STRONG BUY both AOL and DCLK The online advertising market has potentially bottomed and more than likely the demand for online advertising will accompany a rebound in the economy Q: How about Yahoo!? YHOO has clearly has been knocked off its pedestal over this period Its huge user base includes over 192M registered users Company is still in the process of transitioning from a business model reliant on advertising to one with more diversified components He thinks the jury is still out on YHOO! Q: And BroadVision? For BVSN he is and was optimistic about the company's long-term potential Until the company provides us with an indication that its customers are continuing to buy and deploy its products, we remain somewhat cautious Q: What business model do you expect to do best on the Net going forward? If the down draft last year into the 1st quarter of this year has taught us anything, it is that a diversified revenue model, coupled with a strategy to generate growth and earnings, is the best framework Other things he looks for in companies include large market share, competitive advantages, and continued improvements in fundamentals Companies that come to mind include AOL, ADBE and EBAY Q: Can you expand on your views about AOL? The company is poised to easily outperform the market over the next year AOL exceeded expectations that were untouched by pre-announcements They have several positive revenue catalysts in place They have the most valuable assets and deepest management team in its industry Other companies he likes are: AKAM and RNWK and would also put DCLK in the list Note of caution...investing in Internet stocks is extremely risky and as these companies provide significant upside opportunities, so too do they have notable downside risk, so his advice is to stick with the leaders that have proven their ability to execute Q: Is now a good time to buy Ask Jeeves? Although he does not cover ASKJ, he is very skeptical about their business model