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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: bistineau_la who wrote (41884)	5/26/1999 12:11:00 AM
From: Jenna	Read Replies (1) \| Respond to of 120523

FATB.. NOVL.. NOVL After the bell on Tuesday, Novell reported that sales jumped 20% to $316 million for the second quarter ending April 30, 1999. Earnings of $0.11 per share were a penny ahead of estimates and more than double year-earlier levels. CEO, Eric Schmidt commented that, 'NetWare 5 has exceeded our plans, and Novell is on its way to becoming a growth company again.' He's right. And that growth should accelerate in the quarters to come. (((((((((((((((((((((((((((((((((((((((((((()))))))))))))))))))))))))))))))))))))))))))))))))) FATB reports tomorrow after the close.. The good thing about a play like this we don't have to wait long to see if this has merit. You won't 'miss the boat' if you don't get aboard, in fact I would wait to see if this boat was 'seaworthy' BEFORE getting on board. From Individual Investor Magazine.. on line edition.. Unlike Amazon, which has hundreds of thousands of passive customers, fatbrain users interact with one another through message boards, posting book reviews and other commentary. 'There exists a real community to this category, even more so than in the consumer market,' notes Chris Vroom with Thomas Weisel and Partners. 'In our view, effective combination of content, community and commerce wins everytime.' As the company has inked more partners, its sales have exploded. The company had $11 million in sales in fiscal (January) 1998. A year later, sales surged to $19.8 million. But that doesn't really tell the story. On-line sales have more than tripled in the last year, and are growing at a whopping 50% sequentially. Fully half of the company's business comes from repeat customers, and those customers are buying in ever larger quantities. The company figures a typical customer is ordering $50,000 worth of books and manuals in the first year, $500,000 in the second, and $1 million in the third year. Couple that with a surge in new accounts, and the heady sales growth looks sustainable. In another bid to kickstart sales, the company is now offering higher margin computer based training through those intranets. Though just 10% of sales now, CEO Chris MacAskill figures this business should grow smartly in the years to come. Fatbrain will release results after the close of trading on Wednesday. Vroom is looking for online sales to expand 23% sequentially to $4.3 million. But his math seems a tad too conservative. Back in January, fatbrain had 78,000 registered accounts. Now the company boasts of more than 100,000 accounts, a nearly 30% jump. In the last two quarters, the company's sales have been much higher than forecasts, and this quarter should be no exception. Bottom Line Soon after going public last fall, one of fatbrain's underwriting analysts dropped coverage. Since then, the stock has stayed off of most Internet buy lists. But as Vroom notes, the shares are 'underfollowed, undervalued, and exceptionally attractive.' He sees the shares climbing from a recent $17.75 to $25-30 in the next 12 months. But if this net stock catches fire, price targets are irrelevant.