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ISDEX Winners/Losers, Hot/Not

In his latest letter to shareholders investor guru Warren Buffett says you'd be better off if he had simply gone to the movies during market hours. If he had popped into my multiplex here's what was showing:

ISDEX dropped 3.4% to 551.42 dragged down by the big brands across a spectrum of spaces: Healtheon (NASDAQ:HLTH), Infoseek-Disney (NASDAQ:SEEK), @Home (NASDAQ:ATHM), eBay (NASDAQ:EBAY), Yahoo (NASDAQ:YHOO), among the names.

Why the loss of luster with the star attractions of the Net? Growth in market valuation. How much further can the top ones go in girth? More than anything what the market says to me now is that emerging brands matter more now than brand leaders.

I think there's a gap between the top stocks and those with less brand but more bang in market valuation. In other words, which don't trade at "brand" premiums. Let's see the numbers:

ISDEX ®   13-Jul-99 % change
The Internet Stock Index   close from
www.isdex.com     06-Jul-99
for isdex history file click here     close
ISDEX   551.42 -3.4%
NASDAQ   2,778.23 1.5%
DJIA   11,175.02 0.4%
       
Network Associates NETA $ 19.50 22%
Axent AXNT $ 16.50 22%
CDnow CDNW $ 20.31 19%
Verio VRIO $ 77.00 17%
PSINet PSIX $ 60.88 15%
Preview Travel PTVL $ 24.50 9%
Ticketmaster-CitySearch TMCS $ 35.25 7%
24/7 Media TFSM $ 42.88 7%
Beyond.com BYND $ 29.63 6%
Broadvision BVSN $ 75.88 5%
Sportsline USA SPLN $ 37.19 5%
Exodus EXDS $ 135.50 4%
Infospace.com INSP $ 51.88 3%
America Online AOL $ 125.13 3%
Onsale ONSL $ 22.50 2%
Prodigy PRGY $ 27.19 2%
Security Dynamics SDTI $ 22.81 1%
Broadcom BRCM $ 140.50 1%
CNET CNET $ 49.81 1%
Mindspring MSPG $ 48.25 0%
Open Market OMKT $ 14.94 0%
Amazon.Com AMZN $ 126.13 -1%
Ariba ARBA $ 114.56 -1%
ISS Group ISSX $ 37.00 -1%
Earthlink Network ELNK $ 65.38 -1%
CheckPoint Software CHKP $ 56.88 -2%
Cisco CSCO $ 65.25 -2%
RealNetworks RNWK $ 86.75 -3%
CyberCash CYCH $ 12.69 -3%
CMG Info CMGI $ 113.88 -3%
Doubleclick DCLK $ 96.50 -4%
Lycos LCOS $ 99.94 -4%
Go2Net GNET $ 80.25 -4%
Security First Technologies SONE $ 46.06 -5%
USWeb USWB $ 24.19 -5%
iVillage IVIL $ 52.25 -5%
Verisign VRSN $ 82.19 -7%
StarMedia STRM $ 55.13 -8%
E*TRADE EGRP $ 37.88 -8%
Xoom.com XMCM $ 55.50 -8%
Inktomi INKT $ 125.56 -10%
Network Solutions NSOL $ 73.97 -10%
Broadcast.com BCST $ 121.50 -10%
Yahoo! YHOO $ 156.94 -10%
Juniper Networks JNPR $ 125.00 -10%
eBay EBAY $ 125.00 -11%
@Home Network ATHM $ 49.94 -12%
Infoseek SEEK $ 43.50 -16%
Concentric CNCX $ 33.31 -16%
Healtheon HLTH $ 63.13 -17%

Network Associates (NASDAQ:NETA) popped 22% to $19.50 since July 16, with most of its moves coming July 13 on takeover rumors. NETA has been on my radar since the accounting foible last year which reduced its market cap more than in half.

The part I liked about NETA was revenue and its footprint remained strong. Products over accountants so to speak.

That translated into trading at a discount to its revenue and historical value--if it could get passed the stigma of bad accounting. With a large security software footprint and low relative valuation (based on revenue multiple, growth, products) I think NETA makes a good fit with a larger software concern, still. In particular, I think IBM makes a great hunter here.

It speaks to the faith in security software sector that #2 gainer on the week July 6-July 13 was Axent (NASDAQ:AXNT). AXNT jumped 22% to $16.50 per share after GartnerGroup rated its Raptor firewall as one of the best solutions. Firewalls protect Web sites/servers from unauthorized intrusion.

CDNow (NASDAQ:CDNW) added 19% to $20.31 per share as the online music etailer climbed into a merger with Sony and Time Warner's Columbia House music selling operation. While the juries out on the merger, a stock for new stock deal, I believe CDNow needed deep pockets to compete globally in the Web music space.

24/7 (NASDAQ:TFSM) also ran on deal rumor with DoubleClick being the name most mentioned as suitor. However, with DoubleClick taking out Net Gravity (NASDAQ:NETG), it probably puts 24/7 on the waiting to dance list. DoubleClick and 24/7 would consolidate the ad-marketing network position nicely for DCLK but it would have to be very aggressive at dealmaking for DoubleClick to make a bid on TFSM while DoubleClick digests two pending acquisitions.


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