10 Internet Stocks
That Will
Revolutionize
the World
by Donald Rowe
Editor, The Wall Street Digest
There
are more than 43 million computers connected to the Internet in the United
States today. Currently, 148 million Americans access the World Wide Web
from their homes, offices and schools. China presently has only 4 million
people using the Web. However, an explosion of computer sales and modems
in both China and Japan will accelerate the current Internet revolution
into Asia. The U.S. has, by far, the most people using the Web today. But
that will change radically.
The
number of people using the Web from home will surge from 97 million this
year to over 250 million by 2004. Business users will grow from 53 million
today to 180 million by 2004.
E-commerce
will explode from a conservative $150 billion this year to over $3.5 trillion
by 2004. Online holiday sales are expected to hit $6 billion this year,
double 1998's figure, which was the turning-point year for online consumer
spending. Leading commerce sites are expected to process nearly 60,000 daily
transactions by year end. But that's only a fraction of the projected eleven-fold
increase by 2003 when online consumer spending is expected to grow to $78
billion.
Although
Western European online households are expected to grow from 14 million
to 47 million by 2003, the real growth is well underway in Asia. Shortly
after 2005, China will have more people using the Internet than any other
country.
No
wonder China's leaders and students are learning to speak English. The World
Wide Web will force the entire world to speak English. Blue Chip companies
in the U.S. raced to set up headquarters and manufacturing plants in China,
but were frustrated by government red tape, regulations and restrictions.
The net result has been a bust for most U.S. companies and only a trickle
of exports from the U.S. to China. That will also change. There is very
little that you cannot purchase by simply turning on your computer.The Chinese
love western clothes. They see a fashion show on CNN 24 hours a day. Smart
companies make sure their TV ads dominantly include their Web address. place
an ad on CNN and you will reach billions of shoppers around the globe.
Over
the last five years, the share price of CMGI is up 19,476%. CMGI helps finance
and launch consumer-oriented Internet sites. A new company, International
Capital Group (ICGE) will concentrate on financing and launching business-to-business
Internet sites. Business-to-business e-commerce is expected to dwarf consumer
e-commerce. If the five year return for consumer oriented CMGI was 19,476%,
what do you suppose you make by owning ICGE?
Yes,
it's a fabulous opportunity, but don't buy it now. I expect to purchase
ICGE at a lower price in late November or December. Yahoo has a 3-year share
price appreciation of 4,842%.
AOL
has a 5-year share price appreciation of 12,006%. Both companies, plus CMGI,
are in Hong Kong now to set up shop and use Hong Kong as an entry site into
China, the biggest Internet prize of all. Billionaire Masayoshi Son says
his Tokyo-based Softbank (SFTBF) company owns 7% of the Web. Son agreed
to lend Yahoo's founders $100 million to get started. His small investment
is now worth $7 billion. Son's $400 million investment to launch E-Trade
is worth over $2.4 billion today.
Softbank
owns 51% of Yahoo-Japan and is financing the formation of the Nasdaq in
Japan. Few people are better positioned than Son to move into China and
capture the big prize, 1.2 billion Chinese consumers.
Be
sure to own CMGI, ICGE, Yahoo, AOL and Softbank, but wait for my Buy signal
in late November or December. The smart money is betting heavily on specific
Internet companies that will accelerate the speed of Internet access and
usage. Digital subscriber lines (DSL) and cable modems will soon be operating
up to 100 times faster than 56k modems. High-speed Internet service via
satellite will catch on by 2003. You will find summaries of ten Internet
companies which possess leading edge technologies in this issue.
These
companies are designing and manufacturing routers, switchers, software and
other products that are better, faster and cheaper than their competition.
These ten companies are the stock market's true blue chip companies.
Wall
Street is reluctant to recognize them as blue chips because they are not
huge, well-known companies like Coca-Cola, Eastman Kodak or Sears. These
ten Internet companies will dramatically accelerate the value of your portfolio
over the next five years. But again, don't purchase them now. You will be
able to purchase all of them at far cheaper prices in November or December.
Remember the name Softbank (SFTBF) and its owner, Masayoshi Son. His current
net worth is reported at $6.3 billion.
Bill
Gates is reportedly worth $85 billion. However, Internet insiders say Son
will be worth far more than Bill Gates in 10 years or less. Why? Son is
far better positioned to capture the profits of the Internet explosion in
China, Japan and Southeast Asia, where one-third of the world's people live.
The
next five years will be the most exciting period of explosive growth and
wealth building that you and I will ever see. To experience the excitement
and watch your portfolio value soar, you must recognize that the Internet
revolution is the greatest investment opportunity of all time. You must
recognize that Coke, Exxon, Alcoa, Gillette, 3-M, Sears and 50 other "blue
chip" companies are relics of the past. They are tired, fully mature
companies with little or no sales or profit growth.
Study
the companies summarized below. (Ed. Note: Donald Rowe has compiled a list
of 35 Candidates for the Buy Signal). $100,000 invested in these companies
will be worth over one million in five years or less. Some of these companies
will be taken over by larger companies. Some might even fail because their
current technologies will become obsolete. But you know now, right now,
where to start building a superior portfolio of true blue chip stocks in
November or December Wait for my Buy Signal. The next few weeks could be
unusually volatile.
Ten Internet Stocks That
Will Revolutionize the World
Broadcom
Corporation (Nasdaq BRCM) is a leading developer of highly integrated silicon
solutions that enable broadband digital transmission of video, voice, and
data content to and throughout the home, as well as within the business
enterprise. Broadcom's products enable the high-speed transmission of data
over existing communications and infrastructures, most of which were not
originally intended for digital data transmission.
Broadcom
designs, develops and supplies integrated circuits (IC) for some of the
most significant broadband communications markets.
This
includes the markets for cable set-top boxes, cable modems, high-speed office
networks, home networking, direct broadcast satellite, terrestrial digital
broadcast, and digital subscriber lines (DSL). Broadcom was founded in 1991
by Henry T. Nicholas, III, Ph.D. and Henry Samueli, Ph.D., with the vision
of providing broadband communications by leveraging their combined 35 years
of communications IC experience.
Broadcom
has a significant market share in cable modems, digital set-top boxes, high-speed
networking and Fast Ethernet networking, and provides key technology and
products in emerging broadband markets.
Broadcom
has strategic customer relationships with 3Com, Nortel-Bay, Cisco Systems,
General Instrument, Motorola, Panasonic and Scientific-Atlanta. Broadcom
Corporation has placed itself in a strategic position to excel in all methods
of broadband communications. Broadcom has reported earnings of 133% and
280% from a sales increase of 171% and 157% for the last two reported quarters.
Company headquarters: Irvine, CA, phone: 949-450-8700. (Source: www.broadcom.com)
CMGI
CMGI
(Nasdaq CMGI) is the recognized leader in the consumer e-commerce sector
of the exploding Internet. CMGI represents the largest, most diverse network
of Internet companies in the world. This network includes both CMGI operating
companies and a growing number of synergistic investments through its venture
capital affiliate, @Ventures. CMGI leverages the technologies, content and
market reach of its extended family companies to foster rapid growth and
industry leadership across its network, as well as the larger Internet economy.
CMGI
started in 1968 as a list management and direct marketing business. Since
then CMGI has built upon that core by creating or investing in a number
of companies that engage in or support direct marketing on the Internet.
CMGI
has used an innovative investment strategy much like a private venture capital
company to create value for its shareholders. Its @Ventures Internet investment
had development arm has yielded a significant return on investment since
its inception in 1995. The combination of CMGI's majority owned operating
companies and the @Ventures portfolio creates exceptional diversity and
depth across key Internet sectors, which include e-commerce, infrastructure,
content, and community companies.
CMGI
earnings increased by 999% from a sales increase of 106% for the second
quarter of 1999. Over the past five years, the share price of CMGI has rocketed
by 19,476%. Company headquarters: Andover, MA, phone: 978-684-3832. (Source:
www.cmgi.com)
Excite@Home Corporation
Excite@Home
(Nasdaq ATHM) is a new media company poised to revolutionize the way people
across the globe use the Internet to communicate, conduct business, capture
information, and perform various transactions. The company is the result
of a merger between Excite, Inc. and The At Home Network in January 1999.
The
company has combined the Excite brand (one of the best known names on the
Internet with 70% recognition among Web users) with the At Home Network.
At Home's broad reach agreement with 21 cable companies worldwide is a source
of continuing revenue.
Today
the new company delivers its vision of "All Band, All Device, All the
Time." Excite@Home is creating global media network centers by combining
online content and navigational services with the distribution power of
its broadband infrastructure. Management's goal is to provide a new site
of advanced interactive services that continually captures the imagination
of Internet users.
By
leveraging the global reach of dial-up Internet access and the consistent
growth of broadband, Excite@Home gives its customers the flexibility to
move between services at different speeds, using different devicesall with
one consistent interface.
At
Home offers the choice of using a PC, pager, cellular phone, or television
to access the services that cater to your specific needs and interests 24
hours a day. Excite@Home's second quarter earnings were up 120% on a sales
increase of 665%. Company headquarters: Redwood City, CA, phone: 650-569-5000.
(Source: www.home.net)
Global Crossing Ltd.
Global
Crossing (Nasdaq GBLX) is the leading independent provider of fiber optic
telecommunications systems. Global Crossing's mission is to develop, own
and operate the world's first independent integrated global network in order
to help satisfy the explosive demand for reliable, high quality undersea
transmission capacity. Global Crossing is rapidly developing major fiber
optic undersea cable systems and terrestrial facilities, to reliably and
cost effectively connect the leading cities of the world.
The
demand for telecommunications capacity is exploding. Within the past five
years, Internet traffic has grown 86% per year, more than six times the
growth rate of voice traffic.
Add
to this the increasing global competition caused by continuing telecommunication
privatization worldwide, and it becomes very clear that the industry is
in the midst of a major evolution. While there has been significant demand
for global telecommunications capacity, there has not been a corresponding
growth in the number of new facilities, especially in the undersea fiber
optic cable industry. Global Crossing has already begun to meet this challenge.
They
have the additional undersea network capacity and faster response times,
which will be required to satisfy current and anticipated growth in telecommunications
traffic.
Management
owns 70% of the company. Second quarter sales were up 88%. GBLX should post
its first profit during the third quarter of 1999. Company headquarters:
Bermuda, phone: 441-296-8600. (Source: http://206.132-184.108)
JDS Uniphase
Uniphase
Corporation (Nasdaq JDSU) is a high technology company that designs, develops,
manufactures and markets fiber optic telecommunications components, modules
and laser subsystems. The company's telecommunications products include
semiconductor lasers, high speed external modulators, transmitters, fiber
Bragg gratings and optical modules for fiber optic networks in the telecommunications
and cable television industries. The company's laser division produces laser
subsystems for a broad range of original equipment manufacturers (OEM).
Applications
include biotechnology, industrial process control, measurement, graphics,
printing, and semiconductor equipment.
Uniphase
Corporation is in the process of acquiring EPITAXX, Inc., a leading supplier
of optical detectors and receivers for fiber optic telecommunications and
cable television (CATV) networks. EPITAXX's products include long wavelength
detectors and receivers that address a number of applications, including
dense wavelength division multiplexing (DWDM) and SONET/SDH transmission,
optical network monitoring for terrestrial and undersea networks, test measurement
and fiber optic analog CATV.
The
capability to supply advance detectors and receivers, both in component
form and as part of integrated modules, is a very significant step for JDS
Uniphase in expanding its "active" optoelectronic product lines.
With
EPITAXX joining the JDS Uniphase family, JDS has built a powerhouse providing
advanced products and technologies for the rapidly growing fiber optics
telecommunications market. JDS Uniphase has produced a steady increase in
sales and earnings for the last four quarters. During the most recent second
quarter, earnings increased by 47% from a 68% sales increase. Company headquarters:
San Jose, CA, Phone: 408-434-1800. (Source: www.jdsunph.com)
Lucent Technologies
Lucent
Technologies (NYSE LU) is at the very center of a global communications
networking revolution that is expected to total $650 billion by 2001. Lucent
is among the worldwide leaders in the design, development and manufacturing
of leading edge communications solutions. In this market Lucent delivers
a wide range of public and private networks, communications systems and
software, optical and data networking systems, business telephone systems,
and microelectronic components.
Lucent
holds the Number One market position in optical networking, U.S. switching
systems, and U.S. wireless infrastructure equipment.
Customers
include global service providers: Internet service providers; and private,
public and government owned telephone companies around the world. Lucent
also holds the Number One market position in messaging and in-building wiring
systems, and is Number One in the U.S. market for business communications
systems, call centers and wireless systems. The crown jewel for Lucent is
Bell Labs, which is the innovation engine for Lucent Technologies.
More
than any other private R&D institution, Bell Labs has helped weave the
technological fabric of modern society.
It
is the birthplace of the transistor, the laser and the communications satellite,
and continues to make major technological advances, including Internet switching
and transmission products and pace setting optical networking systems. Lucent
Technologies is literally taking the world into the future. Lucent Technologies
has a growth rate of 56% and a return on equity of 51%.
Over
the last two reported quarters, earnings have increased 143% and 56% over
the same period last year. Company headquarters: Murray Hill, NJ, phone:
908-582-8500. (Source: www.lucent.com)
MCI WorldCom
MCI
WorldCom (Nasdaq WCOM) is a telecommunications industry leader that owns
and operates its own networks in local cities across the U.S. and around
the world. The company's unique set of assets allows its customers to combine
voice and data traffic from local U.S. and international locations onto
seamless, end-to-end networks. MCI WorldCom combines financial strength
and a depth of resources to pursue the industry's best growth opportunities.
Operating
in more than 65 countries, the company is a premier provider of facilities-based
and fully integrated local, long distance, international and Internet services.
Through
UUNET, the company has developed one of the most reliable and widely deployed
Internet networks, as well as networking and hosting solutions around the
world. The powerful UUNET backbone supports speeds ranging from 56 Kbps
to OC-3 and provides local access from more than 1,000 locations worldwide.
MCI WorldCom also offers virtual private networks (VPN), security, Web hosting
and e-commerce services.
In
global operations, MCI WorldCom has established itself as a local, facilities-based
competitor in 16 countries, representing $533 billion or 76% of the $700
billion global telecommunications market.
MCI
WorldCom just acquired Sprint in the largest merger ever. Sprint owns the
most advanced wireless telecommunications network. MCI WorldCom reported
that second quarter earnings increased by 114% on a sales increase of 247%.
Company headquarters: Jackson, MS, phone: 601-360-8600. (Source: www.wcom.com)
Qualcomm
Qualcomm
(NYSE QCOM) is an inventive wireless technology company which has been transforming
the wireless communications industries since 1985. Qualcomm designs, develops,
manufactures, markets, licenses and services some of the most advanced chipsets,
system software, subscriber products, mobile information and management
systems. As the pioneer and leading provider of CDMA (Code Division Multiple
Access), the fastest growing wireless technology in the world, Qualcomm
is uniquely positioned to offer innovative technology products and services
for the wireless future.
Qualcomm
has earned a distinguished reputation that goes beyond CDMA. Qualcomm was
recently added to the S&P 500 Index, and Fortune's "100 Fastest
Growing Companies."
Qualcomm
is also included in Fortune's list of "100 Best Companies to Work for
in America" and Industry Week's "100 Best Managed Companies."
Qualcomm continues to lead the industry with the development of a versatile
wireless data solutionHigh Data Rate (HDR), a high-speed, high capacity
wireless technology. HDR unleashes Internet access by providing up to 2.4
Mbps in a standard 1.25Mhz channel bandwidth that is unprecedented in systems
capable of fixed, portable, and mobile services.
Qualcomm's
technology applications also include Ommi Tracs Mobile Information Management
Systems, which provides transportation companies with an innovative and
effective way of managing logistics.
Developed
and manufactured by Qualcomm, Ommi Tracs is used in more than 35 countries
on four continents and is the world's largest wireless data application.
Qualcomm's earnings increased by 341% and 215% for the last two reported
quarters. Company headquarters: San Diego, CA, phone: 619-587-1121. (Source:
www.qualcomm.com)
Softbank
Since
1995, Masayoshi Son's Softbank Corp. (Nasdaq SFTBF) has made perhaps the
savviest venture capital bet of all time by taking equity stakes in which
are now the hottest sites on the Web. Yahoo, GeoCities, E*Trade, and E-Loan
are just a few well-known Internet names. Son owns a piece of all of them.
He has parlayed startup investments of nearly $2 billion into paper profits
now worth over $15 billion.
In
what might be the model for the global expansion of e-commerce, Son is binding
together his 100-plus confederation of companies into a cyber-conglomerate
that will expand into Asia and Europe.
At
its core is Softbank, a sprawling empire in Japan and the U.S. that includes
software, retailing, magazines, Web publishing, and computer trade show
properties. With a market cap of $38 billion, Softbank exceeds that of Toshiba.
Sons basic strategy is to import U.S. Web sites into Japan, where there
is precious little experience in commercializing the Internet. The Japanese
government is counting on e-commerce and business-to-business transactions
as a means to lower Japans bloated price structure and spur a productivity
surge.
Son
and Softbank are leading the way and over time will destroy Japans "good
ole boy" corruption network of price fixing.
Son
is financing the development of Japans Nasdaq market system and is in the
best possible position to capture the profits from the Internet revolution
as it spreads into Japan, China and all of Southeast Asia, where one-third
of the globes 6 billion people live and work. (Source: www.softbank.co.jp,
Business Week)
Texas Instruments
Texas
Instruments (NYSE TXN) is a global semiconductor company and the worlds
leading designer and supplier of digital signal processing (DSP) and analog
technologies, which are the engines driving the digitization of electronics.
The companys businesses also include materials and controls, education and
productivity solutions, and digital imaging. The company has manufacturing
or sales operations in more than 25 countries.
Over
the next few years, Texas Instruments expects to make major contributions
to the critical technologies driving the digital revolution.
By
integrating their capabilities in sensing, processing, transmission and
display, Texas Instruments will provide important solutions that will help
make its customers more competitive in global markets. Today Texas Instruments
best scientists, engineers, mathematicians, computer scientists and technicians
are exploring new scientific concepts to create products that are changing
forever the way you live, learn, work, and play.
Texas
Instruments continues to invest heavily in research and development, which
will allow it to enhance its position of leadership and supporting growth
in emerging global markets.
Through these investments, Texas Instruments is well positioned to dominate
the worldwide demands of a $50 billion digital signal processing solutions
market. Texas Instruments reported an earnings increase of 156% during the
second quarter of 1999. Company headquarters: Dallas, TX, phone: 972-995-3773.
(Source: www.ti.com)
Editors
Note: Donald Rowe is editor of
The Wall Street Digest, One Sarasota Tower, Ste. 602, Sarasota, FL 34236
1 year, 12 issues, $150. Published continuously since 1977, The Wall Street
Digest is one of Wall Streets most widely read investment and financial
publication for economic trends and investment direction. This highly-regarded
advisory newsletter provides specific investment advice for stocks, bonds,
mutual funds, precious metals, stock and bond markets.
