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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Mo who wrote (3828)	3/19/1999 12:56:00 AM
From: Scott Williams98	Read Replies (2) \| Respond to of 20297

Here's an article from Business week mentioning CKFR... Got this off the Yahoo board. A good article! Playing E-Commerce through E-Payment Stocks As bill-paying and other financial transactions spread through cyberspace, some companies will cash in A somewhat obscure software maker with the eye-catching ticker symbol "EPAY" (calling to mind the soaring share price of Internet auction outfit eBAY), has been one of the most actively traded stocks of the past week. EPAY is Bottomline Technologies, which makes financial software for businesses and went public on Feb. 12 at $13 a share and traded in the low 20s for the better part of a month. But thanks to positive analysts' reports on Mar. 10 that tied the stock to electronic commerce and attracted the enthusiasm of day traders, Bottomline rocketed to a high of $98 on Mar. 16. Then traders started selling en masse. "Get out now!!!" read one posting on an Internet message board that morning. EPAY closed Mar. 17 at $77 5/8 -- not bad considering one analyst set a price target of $45. "Obviously there has been a great deal of ebullience because EPAY is a play on Internet payments," says Gary Craft of BancBoston Robertson Stephens. He's sticking with his buy rating despite the steep rise. "We're not going to disagree with the market. This is all new revolutionary stuff." EPAY's recent run seems a sign that investors' are eager to find a way to play the growth in online banking and bill-paying. But dozens of other companies are also providing banks and businesses the software and services they need for Internet payments. And some may ultimately prove better positioned than Bottomline to benefit from the trend. NARROW SEGMENT. In fact, Bottomline may well turn out to be one of the Internet's one-week wonders. While it is profitable and analysts predict rapid growth, the company is involved in a fairly narrow segment of the E-commerce picture. Its software allows companies to manage and execute all kind of payments, including making electronic payments to employees and vendors. Along with transitioning customers away from issuing paper checks, it also lets companies access payment information over the Internet -- so a salesman on the road can order a check printed remotely, for example. Large corporations have long used electronic payments (think how long direct deposit has been available). Although there's room for growth, Bottomline's core business is "fairly old hat in some sense," says Octavio Marenzi, research director at Meridien Research in Newton, Mass. The truly fast growth lies with providing software and services that allow ordinary folks to pay bills online, says Marenzi. "Licking stamps and filling out checks will be a thing of the past," says Drew Cupps, manager of Strong Enterprise Fund (SENTX). In three years, he thinks a majority of people under age 30 will pay all their bills online, and in five years he thinks it'll be the norm. Although electronic banking has been around for years, mainly in the form of dial-up services offered through personal-finance software packages like Intuit's Quicken, in the past few months its momentum has been building. As the Internet has become a mass medium, banks have gotten serious about offering the service, say analysts. Chase launched an improved free Internet banking service on Feb. 24. Citibank will unveil its new Web site and online banking service this summer. "Probably 8 of the top 15 banks will be rolling out Web-based online banking in the next 9 to 12 months," says Stephen Franco, an analyst with Piper Jaffray. Online stock trading has paved the way for consumers to manage their finances online, he says. And costs should come down. While many banks still charge up to $10 a month for online banking, Chase's service is free. cont.>>

To: Mr. Mo who wrote (3828)	3/19/1999 12:58:00 AM
From: Scott Williams98	Read Replies (1) \| Respond to of 20297

PART 2 OF ARTICLE... MORE BUSINESS. Bill presentment, where customers receive their bills online as well as pay them, is also just starting to gain momentum. MCI WorldCom announced E-billing on Feb. 24, and AT&T is expected to offer it soon. A Mar. 3 study by Killen & Associates found that numerous financial, utility, and telecom companies are moving to provide Internet billing and payments. This, too, will mean more business for some E-payment companies. Unfamiliar with EPAY, Cupps is playing the broad theme by buying CheckFree Holdings (CKFR), the leader in online billing and check-processing services, for his fund. Banks contract with CheckFree to process all the payments their online banking customers make. When the check is for a company or individual that isn't linked to an electronic network (about 50% of checks currently, down from 75% a year ago), the company will cut a paper check and mail it out. CheckFree is paid by the bank for each online customer. Franco estimates it has 75% to 80% share of a market that is so far 95% untapped. CheckFree is also a leader in what analysts call the "next big thing" -- distributing bills online. It allows banks to aggregate customers' bills, including from credit cards, department stores, and the phone company, so customers could review and pay them online. Franco rates it a strong buy and has a price target of $53. The stock closed Mar. 17 at $39 15/16. CheckFree's future is far from certain, however. Some banks are setting up their own systems to try to avoid paying CheckFree for its services. "It may be a victim of its own success," says Marenzi. BIG DEALS. Franco's other recommended stock in the sector is Security First Technologies (SONE), which sells software that allows banks to provide home-banking services to customers. While some 40 to 50 companies do roughly same thing, its superior product has won some of the biggest banks as customers, he says. The stock has doubled in the past six weeks on news of deals with Royal Bank of Canada and alliances with Anderson Consulting and Hewlett-Packard (HWP). Security First closed on Mar. 17 at $66, still short of Franco's $80 price target. Marenzi, whose firm advises corporations on which software to use, thinks Security First has some technical problems and says its rapid growth is due mainly to personal relationships top management has been able to tap -- which it can't do forever. Given its rapid price rise, he says, "I would expect it to fall back to earth." He thinks Broadvision (BVSN) and Edify (EDFY), two companies that also sell Internet commerce software to banks, are better positioned currently. What about EPAY? Craft continues to call it a "very solid, very valuable" company. But he also recommends FundTech (FNDTF), which is similar to EPAY, except its software is sold to banks, while EPAY's is sold to corporations. FundTech has risen from $19 1/4 on Mar. 9 to a recent high of $33 1/8 on Mar. 16. "FundTech is benefiting as much as EPAY from the migration to Internet payments, but it hasn't gotten in the limelight," says Craft. He thinks EPAY got all the attention because it's a new IPO. But you have to wonder if its ticker symbol just might have had something to do with it. END Best of luck SCOTT ----------