Dateline: 10/25/99
Looking at our Movers & Shakers Report for the week, it's interesting to note how important it is to keep an eye out and ear open for news about companies we invest in. Bad news sank three stocks in our discussion - Open Text, Dion Entertainment and Corel Corporation. Meanwhile, good news about Internet Direct, Rogers Communications and e-Dispatch sent all those stocks soaring. Read on!
Click on the title above for a table of this week's Movers & Shakers.
16 of the 61 stocks on our Canadian Internet Stock Average fluctuated by more than 10% the past week. Of these, 7 were advancers and 9 were decliners.
The two top gainers, each jumping over 30% last week were fleet dispatch specialist e-Dispatch and 8 Crown Capital which owns and operates the Starpages, a directory of businesses on the Internet. Both have been moving up smartly throughout the market doldrums of the last month or two.
E-Dispatch, which I profiled here recently, has moved up from around 80 cents at the beginning of July to $2.55 on Friday. The stock was recommended by Canaccord Capital special situations analyst David Wong on September 9th and on Friday the company announced plans to raise $12 million with a private placement.
Wong notes that the company's dispatch technology which is used with pagers, personal data assistants and cell phones "is normally offered as part of a bundled solution, sold through a wireless network operator such as BC Tel Mobility or Nextel, whereby the Company receives a stable and predictable monthly fee".
Recently, reports Wong, the company signed an agreement with Southern LINC, the wireless communications division of Southern Company. This $35 billion American company will bundle the e-Dispatch product with its Southern LINC's Informance Solutions, a suite of wireless data and Internet services. This marks e-Dispatch's first foray into the US market, and as Wong puts it, a "tremendous vote of confidence" in the company and its technology. The stock has already exceeded Wong's twelve month forecast of $2.30.
8 Crown has also been a steadily rising stock. It made our Movers & Shakers list three consecutive times to Oct. 1st as it rose from $2.00 on Sept. 10th to $4.95 on Oct. 1st. After moving sideways for a couple of weeks, it jumped again this week to close at $6.25 on Friday. I have not been able to discover any news that might explain 8 Crown's rise in price.
Another major gainer this week was Rogers Communications after Ted Rogers announced plans to buy back 10% of the company's Class B shares because the officers and directors believe the stock is undervalued. Rogers stock is up over 20% on the week and 107.0% on the year.
And Internet Direct continues to surprise with its solid performance. What began as a BC based regional Internet Service Provider has become a national force with over 150,000 subscribers. It has accomplished this through expansion and by acquisitions.
It made a bold move in May by forging an alliance with Look Communications to provide broadband wireless Internet access through Look's MDS technology. Look has access to 4 million potential subscribers in the London, Ontario to Quebec City corridor. Its shareholders include major players like CTV, Teleglobe and QuebecTel.
On September 1st, Internet Direct and Look Communications announced a definitive agreement to merge the two companies. The merged company will apply for a NASDAQ listing before the end of the year. Internet Direct is up 23.26% for the week.
After such happy news, its too bad we have to take a look at some bad news, but do it we must!
Softcare Electronic Commerce is now into its fourth week of double digit declines and Dion Entertainment and Valu-net are in their third. Valu-net, in fact, is now off our Canadian Internet Stock Average as its price has remained below a dollar a share for three consecutive weeks.
Dion Entertainment was the second poorest performer for the week, dropping 28% to $1.29. Pity the poor sap who bought this puppy at its peak of $6.35 in the wake of Internet Mania in late March. The online bingo company is currently engaged in a mud-slinging match with Border Capital Corporation over allegations of patent infringement.
Corel Corporation is still reeling from the insider trading charges against CEO Michael Cowpland and entered its second consecutive week of double digit losses. Saturday's National Post revealed that the Ontario Securities Commission is extending its investigation to include at least four other executives or former executives with the company.
Pat McKeough of the Stock Picker's Digest thinks "the two-year old investigation will have little effect on Corel's business prospects. We still think the company's software, and in particular its Linux products now under development, have lots of potential. Corel remains a buy". That, however, was before Saturday's revelations.
Finally, Open Text took another big hit for the second week in a row. Its estranged business partner, the Swedish NetSys Technology Group, began undercutting Open Text on its LiveLink softare by 80% on Oct. 18th and sent Open Text's stock into a nosedive.
The Canadian Internet Stock Average has been updated with Friday's closing prices. Three stocks were dropped from the list bringing our total tracked to 58. Multiactive Software, Fifty-Plus Net and Valu-net Corporation have all been trading below a dollar a share for three weeks and have been moved to our Penny Stock List. For what it's worth, Multiactive Software and Fifty-Plus Net have both been recommended by Stock Picker's Digest as a speculative buy for aggressive investors.
Canadian
Internet Stock Average
Canadian Internet
Penny Stock List
Yankee Stock
List
Profiled this week is Internet Direct, the Internet service provider that has been riding high all year. We've also updated e-Dispatch.
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
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10/21/99 - Best of
the Net: smallcapcenter.com
Tools make the difference at this newly revamped relaunch of
Stockgroup.com. Check it out!
10/18/99 - Shaky
Times Ahead?
Thirteen stocks on our internet index took double digit dips last
week. A portent of things to come? We review the week in Internet
stocks.
10/16//99 - Golds
Top Sept. Fund Performers
Our monthly mutuals analysis notes the strong performance of gold
in September. And we bring you our new charts and tables as well.
10/14//99 - Book
Review: Allowances: Dollars & Sense
We ewview Paul Lermitte's new book on how to teach your kids
about money.
10/12/99 - Week of
the Giants
Three large Internet companies from our index all rose more than
10% last week.
Updates: As noted last week, I'm cutting back the number of columns to two a week for now so I can devote more time to updating Net Links and work on other tools such as a FundWatch page similar to my GoldWatch page among other things. In fact, I'd like to create a batch of "Watch" pages for different sectors and interests among investors. Watch for developments over the next few weeks.
Newsletter reviews: Another planned series of articles is on Newsletters. I subscribe to three and get a few complementary ones as well. I've found these to be informative and useful reading, but there are literally hundreds of newsletters out there. Which ones should the interested investor subscribe to? Not all newsletters are created equal. So I plan to review a few, one at a time. Let me know if you have a favorite newsletter you would like me to review. Or better yet, if you are a subscriber to a newsletter and want to do a guest column reviewing it, drop me a line.