Wireless Internet and security stocks led internet.com’s Internet stock
index, the ISDEX, to a 24% gain in
April, as an 86% decline in the index proved a little too much for
investors to resist.
Not bad for 13 months, an 86% decline. It took the Dow from October 1929
until June 1932 to fall 89%. When it comes to Net stocks, even
Depressions happen in Internet time.
Whether April 4 was THE bottom is anyone’s guess, but it’s worth paying
attention to what investors snapped up when they finally put some
sidelined cash to work.
Wireless Internet and security stocks dominated the winners list,
snagging half of the top ten spaces. The top-performing Net stock in
April was GoTo.com , up 141%. The company’s
pay-per-click search service is suddenly in demand as search and portal
sites look for alternatives to advertising.
In second and third place, with gains of 117% and 89%, respectively,
were two wireless stocks, InfoSpace and Openwave
. Research In Motion
came in
sixth with a 75% gain. In fourth place was a security stock, Internet
Security Systems , with an 87% gain, and Netegrity
came in eighth with a 69% run last month.
The only infrastructure stock to crack the top 10 was Juniper Networks
, with a gain of 65% in April. Cisco
and Sycamore
lagged the ISDEX last
month, with gains of 13% and 5%, respectively.
Rounding out the top 10 were Sapient (consultants
have become takeover targets as of late); Amazon.com , which is remaking itself into a B2B company; and
Ticketmaster .
The wireless sector is a promising one for investors looking for
long-term opportunities, because the infrastructure for the wireless Web
is still in its infancy. Interestingly, it is the number two priority
for venture
capitalists over the next 12-18 months, right behind next-generation
networking equipment. Security and storage are two other areas where
earnings have held up relatively well, giving investors hope that demand
will be strong in those areas when the economy picks up.
At the bottom of the list for April were many fallen leaders: Scient
, Excite@Home
, Net2Phone
, Red Hat
, EarthLink
, S1
, and Terra Networks
, all of which lost from 3% to 10%.
Bear markets can signal a long-term change in market leadership, making
sharp rallies like April’s worth paying close attention to.
