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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (16566)	10/9/1998 9:23:00 AM
From: Jenna	Read Replies (1) \| Respond to of 120523

e-mail: NSOL.. considered at least at intraday trade and potential earnings play.. Anyone able to find out when earnings out please let me know. Couldn't get any investor relations people at all there. NSOL: I wouldn't worry about them overcoming the regulations. Although analysts said the expiration of the contract may look bad for NSOL on paper--the company confirmed that 80 percent of its revenue comes from domain name registration fees--they say that the growth of the Internet will support several players and that NSOL is positioned to be the market leader. "They have the name and they have the experience," said James Pettit, a senior analyst at investment bank Hambrecht & Quist. Pettit, who rates Network Solutions a "strong buy," said the company doesn't have to have a monopoly to be a good stock. Keith Benjamin, a bullish Internet analyst atBancBoston Robertson Stephens, initiated coverage on NSI last week with a "buy" rating. "The government contract is currently in transition, and we believe it is highly likely that NSI continues to be the dominant provider of registry and registrar services," Benjamin wrote in a report. "The company is in the process of more aggressive marketing of its primary and complementary services, which we believe can significantly increase revenues per account." Indeed, NSI is reaching out to small businesses to offer value-added services to customers. The company has been preparing for imminent competition for months, adding partnerships with top ISPs. It also has been broadening its services, adding a Web-based email program to its offerings, said spokeswoman Nancy Huddleston. Seeing the writing on the wall, NSI also has expanded its business to include international domain names, such as the two-letter country codes ".de" for Germany and ".fr" for France. In April, for example, Network Solutions acquired Internet Domain Names Incorporated, which specializes in international Net Addresses. Analysts predict that the market for Internet domain names soon will be so large that there will be room for several companies to compete. Network Solutions has 2.3 million registered names, up from 4,000 in 1993, and analysts estimate they will have 6 million names by 2000. "This market is going to grow phenomenally," NSI's Huddleston said. "Competition is going to improve services for the end user and we believe we'll continue to be a leader in the domain name registration business." Observers doubt that the registration process will change quickly, however. "Nobody is going to turn into a pumpkin in a week or a month," Pettit said, noting that there is much transitional work yet to be done by the federal government, including the establishment of policy procedures and standards. "I think if there's a prevailing message coming from the Commerce Department and [Clinton administration Internet policy advisor] Ira Magaziner…it is slow, stable change. Nobody wants this to be done in a hasty fashion where the Web goes down," Pettit added. "I don't think we're going to see competition for many months. My best guess is that there's another formal extension on the order of three to six months." Nevertheless, uncertainty about who will handle registrations in the future has cast a pall over the company's stock, analysts said. Stock in the company closed more than 4 percent higher today at 41.625. NSI shares have traded as high as 58 and as low as 11.75 during the past 52 weeks. "On the surface it looks really ominous," Pettit said. "There's been an emotional overhang on the stock over this." Added Benjamin: "The stock has been under pressure on concerns of potential new competitors, which we believe will not materialize for many quarters, if not years. Even then, we expect NSI will remain the leader by a wide margin."