Hot Stock Picks

- 5/13/00 updates - Many of my past picks have gone up and then gone down and unfortunately for the most part haven't done that well the last few months. Hope you didn't buy any e-toys. Bygones.

I recently made a list of stocks I should own (or should have owned) as opposed to some of the doggie stocks that I have owned in the past. In no particular order, these are Citigroup (C), Charles Schwab (SCH), Texas Instruments (TXN), Cisco (CSCO), Microsoft (MSFT), Inktomi (INKT), Intel (INTC), Home Depot (HD), MCI Worldcom (WCOM), America Online (AOL), United Parcel Service (UPS), Nokia (NOK), Hewlett Packard (HWP), and Dell (DELL). So I am presently trying to put some money into these companies while avoiding putting everything into tech stocks, as I fear that tech stocks in general might still be overvalued. Of course, seeing as how most of these are in fact tech stocks I seem to be sitting on both sides of the fence here.

It is interesting that US Web was bought out in a stock deal by Whitman-Hartt of Chicago, and then the whole thing was renamed Marchfirst, which by the way I think was a stupid choice of names given that they could have called it anything they wanted to and that was the best they could come up with, and now the combined value of both companies is about half of what either one was before the merger. Luckily for me, I sold most of mine before the big drop, and now I have bought back a little bit of it even though I don't like the name because I do think it will be successful.

- 11/25/99 updates - Well, if you've been reading this stuff, you could have made a lot of money or lost a lot of money depending on what you believed and what you didn't. If you bought Home Depot, Doubleclick, or US Web, or shorted Network Solutions at the right time, you made a killing. If you bought Compaq, Philip Morris, or Analytical Surveys, you probably lost a bundle. A brief recap:

Analytical (ANLT) still suffers, going to as low as 11 or 12 and back up to about 15 now. Its still a good deal and as soon as they get sales back on track after the Y2K thing is over, the stock will go back to the 30s or 40s. You heard it here.

Home Depot (HD) was added to the Dow Jones Industrial Average and has been up to around 84 or 85 recently. Shows no signs of slowing down, although higher interest rates or a market correction would bring this one down to a more reasonable p/e ratio.

Network Solutions (NSOL) reported good earnings and is back up really high again, so now its time to sell it short again. The thing is, most of those earnings were made before the competition got started, and eventually the effects of competition and saturation of the market will slow this one down. I think it will drop far and fast.

Philip Morris (MO) - I stayed out of this one until their latest legal disaster drove the stock price to the low 20s, the p/e ratio below 10, and the dividend to above 7%. That means you make 7% on your investment if the stock price even remains flat. I think they will start winning some of these legal battles and the stock price will go back to the 40's. Also, it is very possible that they will spin off the food and beverage divisions or take some other steps to get more from the stock price. I don't think they will just sit back and let the legal system bankrupt such a large corporation and industry.

Compaq - I'm not really high on Compaq right now, but I do believe that they will eventually find a way to compete more effectively with the Dells and Gateways, and the stock price will then take off.

Doubleclick bought out Netgravity and the combined company's stock price has risen dramatically to about 180 recently. Short term, I think that's too high, especially given the shakiness that always seems to go along with mergers and acquisitions, but long term this company is going to make more money from the internet than most other internet companies.

Excite became part of At-Home, and the stock price dropped a long ways, but it has finally and very recently come back from the 30s to almost 60. This one could go either way.

US Web - Stock price went from 24 to as low as 17 or 18, and then it started going up and its now around 42 or so. I don't see any reason it won't continue to flourish, and it wouldn't surprise me a bit to see this one in the 100s within the next few months. Of course, it could drop back to 20 again if the market for internet stocks falls apart or something like that happens.

New Picks - Short Term I like E-Toys (internet retailing Xmas boom, good service and site, competition having problems, hype, hype, hype) - but watch out it could drop fast after Christmas rush is over.

Tripath Imaging (TPTH) is changing the way pap smears are processed, having recently gotten the FDA approvals that they've been waiting on, and the stock price could take off one of these days.

Cel-Sci - (HIV) is working on several promising drugs for cancer and Aids, and they have an Aids drug in testing that is the only one that could work on all of the known strains of Aids. The right type of publicity could send this one soaring. On the downside, it could take a long wait before anything happens to this one.

E-Bay - EBAY - at almost 180 is too high and I recommend shorting it and waiting for the price to fall back to the 80's or 90's. They are seeing new competition, and I think Ebay is kind of a fad that will wear off as people find other ways to spend their time on-line.

Past comments - the following are the past stock tips and updates, most recent ones first.

US Web (USWB): They are buying up a lot of the little firms that create and manage websites, and they are emerging as the leader in this business. Also, they just became profitable for the first time and seem to be capable of making a lot of money. It could be a great buy at the currently beaten down price of about 24.

Update (5/21) - I'm really high on US Web right now. In the last two weeks three different brokerages have come out with highly positive ratings, including one with a price target of $50. The price has stayed above 20 even on the bad days, and is currently back to about 28. This one could fly high in a big hurry.

Excite - I think Excite (XCIT) at 140 is a good deal because they are supposedly being bought out by At-Home for 1.04 shares of At-Home per share of Excite, and At-Home is trading at about 150. So by the time the deal closes the price of Excite should exceed the price of At-Home by about 4 percent. At-Home is pretty hot right now which keeps the price of Excite high and vice versa. On the other hand, if internet stocks fall hard over the next week or two, these two could get hit really hard. - I bought shares of NetGravity (NETG) at about 43 because I'm a greedy little man and I think if internet advertising stocks (like Doubleclick) really take off this one might easily double or triple. I've already watched this one go up to about 66 and then back down to the low 40's, so its going to be an interesting ride.

Update 4/21 - Excite did a big bounce and is back to about 140 again. Was a good deal Tuesday in the low 100's. One good comment about At-Home or high-speed internet access could move this one up pretty quickly. I'm still worried about the potential for another big drop in internet stocks though. NETG dropped to 30 on Monday, but its coming back strong as well. Tonight they beat earnings expectations by a couple cents, so it should move up tomorrow.

Update 5/8 - Excite has done well and is over 160 despite the general drop in internet stocks. Their merger is going ahead this month as well as a stock split. After that, it may lose favor with investors for a while. NETG has not done particularly well and is barely above 30. I think it will be one of the biggest gainers when and if internet stocks take off again anytime in the next two or three months

Update 5/21 - I was still really high on Excite until the last few days when it has taken several big hits for no apparent reason. I tend to believe it will still make a big run upward prior to the merger and stock split in early June, although I fear the unknown and don't quite know why the price has dropped from 160 to 130 lately.

Doubleclick - DCLK - I've been saying for months that internet stocks are overvalued in general. However, I hate losing out on all the money thats being made right now. So, I'm looking to make a quick buck on Doubleclick. Its the leader in online advertising, and its been on a roll lately. It's about to split

Update 4/7 - I got in at 94 (adjusted for the split) and today it hit 135 before dropping some. I sold at 130 then was able to buy more at 123 and watch it go back up to 126. A lot of people seem to be jumping on this bandwagon. It could hit 200 in a few days as long as the internet stock bubble doesn't burst.

Update 4/17 - Went up to about 160 this week before falling hard for a couple days (as low as 106 or 108 I think), and then rebounding nicely at the end of the week to end up at 138. We just need for one yee-haw analyst to come out this coming week and say how he expects the price to hit $500 within a year. It'll be like picking dandelions.

Update 4/21 - Bottom dropped out on Monday, then DCLK went back up a long ways on Tuesday and Wednesday. I chickened out for a while on Tuesday and sold my shares so I could lock in some pretty good profits. I still like the stocks prospects but I'm scared of another big drop in internet stocks after Monday's carnage.

Update 5/8 - This one has been all over from 100 to 160 but is down pretty low right now as are the majority of internet stocks. I am inclined to wait for the next big drop in internet stocks before buying and holding this one, but there is money to be made buying and selling this one as it has been pretty volatile.

Compaq - CPQ - I think its a good buy now at $30, for three reasons. 1) the upcoming IPO sale of their altavista website, and 2) I think they are taking sales away from Dell with a revised marketing strategy, and 3) I think they make a better range and a higher quality of servers than the other big computer sellers, and that's ultimately going to pay off for them.

Update 4/17 - bad news on future earnings came out at the end of last week and the stock dropped about another 20 percent to 23 or so. I should have known better. They never ever should have bought out Digital. What were they thinking? Anyway, I don't think it can go much lower so its a pretty good deal at 23 or 24. Mark my words, it will be back up in the 40's within a year or so.

Philip Morris - MO - I think its a good buy at $40, although they seem to have endless legal problems. I suspect that they will win some appeals or otherwise resolve enough of the difficulties that at some time in the coming year the price will approach $60 again.

Update 3/25/99 there's a big lawsuit about to be decided in Oregon which will either be very good or very bad for MO's stock price. Wait and see.

Update 4/3/99 bad news, they lost another lawsuit and the stock price got hit hard, down to 34 and something now. Still think they will win some appeals, but it isn't looking too good right now

Update 4/7 - a judge cut the verdict amount by half in one of the big lawsuits. Its not really a victory but its a good sign, to me anyway.

Update 5/21 - they won a couple of big verdicts and cut the judgment in half in another one, so things seem to be looking up. Today some analyst upped his rating on MO and the price is back up to 40 again.

Update 8/17 - I sold mine back in June for about 42. They just keep having more legal problems, although they seem to win more than they lose. Its a good buy again at around 35 or 36.

Short Sale on Network Solutions - NSOL - I don't get it. This company at its present share price is worth nearly 5 billion dollars - about a billion more than United Airlines - and they aren't making much money and they are about to lose their government issued monopoly on the registration of .COM internet addresses. If someone gave me 5 billion dollars ($5,000,000,000.00) to buy a company, I would not buy this one.

Update (3/23) now its less than 4 billion again. What a deal!

Update (3/25) its nice when you're right! A company called Asensio Asensio came out with a very negative evaluation of NSOL and stock price dropped again. Its fun to read the message boards and see what all of these folks are saying who bought this at $300 a shareYahoo NSOL Message Board

Update (4/7) there's been a lot of up and down action, but mostly with a downward bias. Today some Prudential analyst said what a great company it is, blah, blah, blah, but I think he's just trying to bail out some of his clients who paid too much for this one.

Update 4/17 - Went as low as 88 this week after being up to about 120 again. They report earnings this coming week, then I expect to see the bottom fall out over the next few weeks.

Update 4/21 - Big drops Monday and Tuesday. I covered my short position at 61 on Tuesday (4/20), making that one of the smartest trades I've made seeing as how it went up to as high as 98 or 99 on Wednesday. It may go up for a few more days, then it'll be another great prospect to sell short. They have competitors now, including AOL. We should see price wars fairly soon.

Update 5/8 - NSOL is back down to sixty something. They are being investigated by Dept. of Justice for not being willing to make their customer database accessible to the new competitors.

Update 8/17 - NSOL has been as low as the low 50's. I haven't shorted for a long time, but I still think it will go quite a bit lower.

Home Depot - HD - I've done pretty well on this one, from 40 to 66 in about six months, but I still think its a great company and will continue to grow and do well. I know I spend a lot of money there and its always crowded.

Update 4/17 - HD is bouncing around from 60 to 65 lately

Update 5/21 - still bouncing, but announced good earnings recently

Update 8/14 - bounce, bounce, bounce - was up to high 60's, now its about 60 again. I sold my shares because I needed some money, but am looking to buy back in at 55 or 56 because I like the idea of owning stock in places where I spend a lot of my money

Analytical Surveys - ANLT - its about 21, and I expect it to be close to 40 by the end of the year.

Update 4/3 - it hit 26 last week - not a bad gain, but holding out for 40.

Update 4/7 - easy come easy go now its back down to the 22-23 range. I think its a victim of being in the small cap category, which keeps getting hammered. But I still think at 20-21 its a big bargain!

Update 4/17 - ANLT is about 25 now, and they say some of the big guys are starting to pour more money into small caps now. Funny, I think I've heard that before! Could go quickly to 40 though.

Update 8/14 - Up and down, up and down - its about 22 or 23 now - still think we'll see 40 before the end of the year

Opinions expressed herein are strictly my own and should not be relied upon as doing so might cause you to lose all your money and I'm not responsible in any way if you do.