Dateline: 11/01/99
| Canadian Internet Stock Average |
|
| Oct. 22 | 2574.23 |
| Oct. 29 | 2652.85 |
| Week's Change | +3.05% |
| YTD Change | +165.3 % |
One of the smartest moves an investor can make if she wants to invest in the Internet but wants to avoid the volatility of pure Internet stocks is to invest in infrastructure. The world is changing rapidly. It is becoming rewired. And much of it is, in fact, becoming unwired!
To achieve its full potential as a new medium, the Internet needs high speed broadband access. And it needs to be accessible by people on the move. This means increasing use of fibre optics and wireless solutions. Fibre optics for broadband home based terminals and wireless for accessing email and corporate communications on the road.
Two of the top gainers this week are JDS Uniphase and Nortel Networks, both involved in developing and implementing infrastructure for the Internet. Both are stocks to watch. Both are featured profiles this week.
23 of the 62 stocks on our Canadian Internet Stock Average fluctuated by more than 10% the past week. Of these, 11 were advancers and 12 were decliners. To see the Movers & Shakers Chart as a pop-up chart, click the button. To see it as a separate page with the discussion on the same page, click here.
Four of the new stocks we added to our index this week are on the list. One of them, Infointeractive Inc. topped it with a 37.5% jump. This company which trades on the Montreal Stock Exchange developed the world's first Internet call management service, allowing users to monitor and manage their phone lines while connected to a dial-up Internet service.
Infointeractive's founder and CEO Bill McMullin was named Entrepreneur of the Year for the Atlantic Region on October 8th by Ernst and Young. Before starting Infointeractive, the 31 year old McMullin had developed one of the first cellular telephone businesses in the Maritimes, a business he later sold.
The company released third quarter results on Oct. 29th which showed revenues increased 1,053% compared to the same period last year. Revenues for the first nine months of the year is up 1,677% over the same period in 1998. The company is still posting a net loss, but the deficit is declining.
The second big gainer on our list is Corel Corporation, the Ottawa software manufacturer, which jumped 26.62%, regaining much of the ground it lost after CEO Michael Cowpland was charged with insider trading. Pat McKeough, in his just-released November Stock Picker's Digest, reiterates his buy recommendation on Corel in spite of the controversy surrounding Cowpland.
What's driving Corel is its embrace of Linux, an operating system that is growing in popularity and may some day rival Microsoft Windows. One of the big drawbacks to Linux is that existing Windows based software isn't compatible with it. But Corel is actively developing Linux solutions and a Linux version of Wordperfect 2000 Office Suite will be available by the end of 1999. CorelDRAW 9 for Linux will be available next year.
Additionally, Corel recently released a beta version of Corel Linux, a more user friendly product than industry leader Red Hat Linux. Corel's version will include Corel Linux Desktop, a user interface with the look and feel of Windows. This product should also hit the market by year's end.
And third on the list is fibre-optics company JDS Uniphase. This is an exceptionally strong stock and jumped on the company's revelation that first quarter earnings exceeded expectations and that sales are expected to increase by 80-90% in the fiscal year ending in June. Ace stock analysts Timothy and Carlton Lutz of the Cabot Market Letter first recommended the stock on July 7th and it's gained over 75% since then. Take a look at its mind-boggling one year performance chart!
Driving JDS Uniphase is surging demand from its biggest customers, Lucent and Nortel Networks, another stock that has been surging steadily ahead all year. The power of Nortel and JDS Uniphase, which provide infrastructure for the Internet, is not surprising considering the growth of this medium. And they are probably a lot safer bet than some of the pure Internet plays.
Our top two gainers from last week, e-Dispatch and 8 Crown Capital, are again double digit gainers this week.
Another newcomer to our list, Montreal based DTM Information Technologies, is also in its second week of double digit gains. The company implements e-commerce solutions for business among other general IT services.
And then there's the bad news! The twelve companies that suffered double digit declines last week.
Actfit.com and IGN Global Network are both in a second week of double digit decline and both have dropped below a dollar a share. Both will be dropped from the index if they do not improve this week.
And the woes at Open Text continue. It dropped 19.21% this week after reporting disappointing earnings. It dropped over 25% the week before. As noted then, a bitter trade war with former partner Netsys Technology Group is hurting the stock badly. This is the third consecutive week of double digit drops for Open Text. The stock is down from $35.10 on Oct. 8th to $17.55 on Oct. 29, a drop of exactly 50%.
The Canadian Internet Stock Average has been updated with Friday's closing prices. One stock, Megawheels.com, was dropped from the list and five added bringing our total tracked to 62. New to the list are DTM Information Technologies Group, Infointeractive Inc., Informisssion Inc., Infowave Software and Sierra Wireless.
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Internet Stock Average
Canadian Internet
Penny Stock List
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Profiled this week are JDS Uniphase and Nortel Networks.
Comments? Suggestions? Why not post them on our Bulletin Board or email me.
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10/28/99 -
Home-made Butter
Over-trading can be hazardous to your portfolio according to
studies by two American professors of finance.
10/25/99 -
Good News, Bad News
Good news and bad news can affect stock price quite dramatically
as we discover while checking out our Internet Movers &
Shakers.
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.
Disclosure: The author owns shares in both Nortel Networks & JDS Uniphase.
Newsletter reviews: A 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.