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URL:  https://boards.fool.com/the-new-paradym-11895376.aspx

Subject:  The New Paradym Date:  1/30/2000  4:12 AM
Author:  TMainzer Number:  7424 of 26232

12/08/99 Revised: 01/28/00
This is the “A list” In no way is it comprehensive. This list was extracted from my stock watchlist started the beginning of 1999. I'm trying to limit this list to 100 companies, looking for only the top tier earners and growers in the new paradigm, and the companies that understand how business is going to be conducted in the future, from the customer on back. Dell it the best example of that type of business structure. They have seamlessly integrated their supply chain to run in “real time”, which has only six days of product in the pipeline at any time. Their internet presence is second to none. No inventory, yet they move 30 million bucks a day through their doors. Anyway, the column after the ticker shows the current market cap, and the second number shows where the market cap was 8th of December. I think market cap is one of the first things to look at when doing fundamental analysis. Ultimately, it is all about earnings and growth. We are just now entering the “sweet spot” of the growth S-Curve of the Network. Look at how many double and triple baggers there are! We ain't seen nothing yet. You think this stuff is expensive now? It is! We are moving through a paradigm shift that is real, and will have the entire world interconnected in five to ten years. Voice and data and video will be transmitted and seamlessly integrated with all other forms of communication and data transfer devices and protocols, transmitted through fibre channels and satellites, to handheld devices, laptop notebooks, etc. All our appliances that do rudimentary things for us will be fully automated, and all mundane tasks will be eliminated. Okay, okay, I'm getting carried away. You get the point.
I liken this elite group of companies as arriving at a party where the Gorillas are standing at one end of the room, looking at the mid caps as they walk in the door, and they snicker. Hehe “Ya'all think your gonna be gorillas eh?” They are like clubs , and there is a tier system. Don't believe it for a minute that these huge companies at the top don't know how to play hardball, they do. They play it very well, and only invite the very best to join them and “have a drink with” them.
Large Cap Gorillas, 100 billion and above in Market Cap. These are left to run unless something drastic happens to their fundamentals. This category makes good anchors and ballast for a portfolio, adding stability and value to ones long term port. I should have bought QCOM and JDSU at any time in 1999 for my long term hold portion of my port. NT is a serious contender too.
MSFT	511B		The grandfather of all business, the “big kahuna” so to speak
CSCO 364B Networking everything internet
INTC 327B The semi-conductor king for pc's and other stuff
NOK 205B 183B The wireless gorilla for voice and data worldwide
ORCL 146B Network software and systems integration
AOL 133B They better tell the market how they plan to merge with TWX
NT 132B 119B Data and telephone networks equipment manufacturer
SUNW 120B 118B Network Software and hardware, Java
EMC 109B 93B 80% of all storage devices
QCOM 109B 69B TDMA and CDMA protocol and wireless

These are franchises that will likely make the 100 billion club soon. Some of these are so brand new it is hard to imagine how they got in this club, like Terra Networks for example. It may have to sit here for awhile to prove itself, because no one graduates from this club unless they do. I guess a lot of investors feel they will be the AOL of the Spanish market. These are must have's and some usually can be added during the summer doldrums, while others it is just best to jump in because they never stop moving towards gorilla status. CMGI and BRCM just arrived in this club. They may not move on the charts now like they used to. They could just run now, and this week may have been our last chance to get them at bargain price. Then again. I believe once a company passes the 25 billion mark, they are pretty well at major franchise status. If they're not doing it right they get eaten up, and they get kicked out. The only reason Dell isn't there is because Dell bust's the “good old boy” network by being the best example of a business. They put some of the old businesses to shame. These old businesses have to revamp and “join the party” so to speak. Who cares, this group knows how to create alliances and buy the companies they need, and merge when they have to, and change with the times. They do business the way all businesses should be run.
DELL	96B		the protégé real time business model of the world, computer
YHOO 82B content, delivery, both vertical and horizontal.
JDSU 60B 38B fibre for the digital age
PCS 56B 58B LAN digital networks for wireless
AMAT 51B 41B the only chip making machine company
SNRA 49B telecommunication infrastructure
VRTS 40B 26B open system data storage management solutions
BRCM 29B 21B circuitry for broadband devices, and everything else too
TRRA 28B Spanish internet access
CMGI 27B 24B Um..internet venture funding, and everything in between

This group of companies is a mix of emerging franchises that are growing revenues and earnings so rapidly to roll out communications and data infrastructures in their respective nitches, that most are surely going to be entering the “sweet spot” of their s-curve growth, and are big enough now to make some waves in the marketplace. Look at how Exodus, who was at the bottom of this group in December is now at the top, ready to graduate to the emerging gorillas status. Seibel systems are at the top of the fastest growing companies right now and just had a killer earnings report. ITWO rocketed from the 10-7 billion club right on past the 10-15 billion club to wind up halfway up the ladder here! It was just a little 2 billion company in the beginning of 1999. Verisign and Conextant and Infospace have emerged quickly and have incredible potential. Foundry and Ariba may have to sit in this group for awhile till they prove themselves, being priced to perfection. As long as they don't stumble they can stay and play.
25-15 billion market cap
AKAM	24.6B
EXDS 22B 15B internet backbone
SEBL 18B 15B sales, marketing, and customer service apps
ATHM 18B broadband DSL cable infrastructure and subscriptions
VRSN 17B security services
CNXT 17B communication electronics, joining the S&P 500 index
ITWO 17B 9.9B supply chain management and B2B solutions
INSP 16B information content
FDRY 16.3B 16B networking products and switches
ARBA 16B 10.6B B2B internet solutions

I love this group because usually hidden in here is a good five bagger before the end of the year., and one or two of these could jump two or three clubs and wind up a gorilla. The further down the list we go, the more exciting it gets, and the more potential for growth and subsequently making money. Remember how many of these were just joining the party last year, and were in the 3-1 billion club? Look at the five to ten baggers in here from last year. PMC Sierra had the most growth since early December. Network Appliance is a must have too, finally getting recognized for the franchise that it is. I think Inktomi could be the one that rockets this year. The B2B plays will probably have to prove themselves unless Wall Street keeps up the hype about the huge trillions market that is arriving overnight.
15-10 billion market cap
NTAP	15B	12B	storage parts and systems 
BEAS 13.6B cross platform middleware
RNWK 13B 11B broadband streaming media, doing super bowl this year
PMCS 13B 7.2B semiconductors
CMRC 13B 10B B2B auctions and solutions
BVSN 11B 9.5B large scale application enterprise solutions
INKT 11B 8.6B internet backbone

You know it used to be when I thought about a ten billion dollar company I thought “Geez that's huge” and I was right. Now the top tier companies in the world have revenue and earnings growth rates in the 25% range and above, the economy is clipping along at 5.5% growth rate which is double what is has been historically, and all the metrics the analysts use to measure are wrong. Historically, companies showed an average of 7.5% growth, as was the norm on the Dow Index for years. Now we look at that and it's four times as much now. Throw in some demographics on spending, and darn, “we got tons of money moving around.” So I say, okay, ten billion eh? Here they are, all pretty much in the communications and infrastructure companies. Why heck they all have great earnings!
10 – 7 BILLION market cap, pick one
DCLK	10B	8.1B	internet advertising leader
SDLI 10B 5.7B fibre channel products, wanted by JDSU buyout
FMKT 10B 7.9B industrial B2B auctions and procurement solutions
BBY 10B retail electronics
HLTH 10.2B Health care automation
ARM 10B 11B RISC microprocessors
BRCD 8.8B fibre channel switching for SAN's
AMCC 8B 5.3B high bandwidth silicon solutions
PHCM 8B 8.7B internet based services for wireless

This category had several more players in it before the last quarter of 1999, but they have moved on. CMGI was the leader here last year. Affimetrix is the company that came out of nowhere and wound up here. I knew about it almost a year ago, and never bought it. Hey, let me know if you think any of these companies should be kicked out for something better. If they aren't living up to the toughest standards that the entire top 100 companies do, then let me know. This goes for any of the companies on this list.
7 – 3 Billion Market Cap, pick one
KANA          7B        5.0B        communications software for e-businesses
RFMD 6B 5.0B radio frequency integrated circuits
QLGC 6B 4.6B semi-conductor and I/O circuitry
AFFX 5.8B 2.8B mapping the entire genome structures of the universe
ISLD 5B 5.1B corporate internet solutions
RIMM 4.3B 2.9B wireless solutions
EMLX 4.1B 3.1B fibre channel host adapters
CNET 3.7B 4.8B content, information and e-commerce
XLA 3.7B 1.0B internet venture capitalists
MACR 3.6B 3.6B software for the development of huge websites
HLIT 3.2B 2.0B fibre channel swithces

I've always really paid attention to the 1 billion market cap stocks because they just arrived at the party. It's great to catch a fast mover before it shows up at this level, because the percentage return goes up four or five fold. This is where new technologies emerge. Catch the right one of these, and hold it forever, and you're a millionaire. Anyway, some of these will not make it, and a lot of them will. Buyouts and mergers are almost inevitable from this level. This is where the I2 Technologies, the Doubleclick's and Broadcom's were last year at this time. I've sometimes thought to just buy all of these, put stops under all of them. Let the winners run and let the losers get stopped out. Oh well, that would probably work, but I'm not going to allocate that way. Only need a couple of these to run all the way to retire on.
3-1 billion market cap, pick one
AMTD	3B	4.3B	Online broker.  This could include EGRP and SCH etc.
MPLX 2.9B internet marketing and advertising solutions
TQNT 2.8B semi-conductors for high standard RFIC's
SILK 2.7B 2.2B internet software solutions for businesses
GNET 2.5B 2.4B branded technology and community web sites
MCOM 2.3B wireless data communications solutions
FFIV 2.2B 2.2B integrated internet traffic solutions
TTN 2.2B 1.3B government communications and information solutions
ADAP 2.0B wireless broadband data and telecommunication systems
KEYN 1.9B e-commerce customer relations and transactions
RAZF 1.8B digital technologies solutions for businesses
BLSW 1.7B 1.6B enterprise interaction management software
OCCF 1.6B fibre optic cables
DIGL 1.5B diagnostic products for fibre optic networks
IDC 1.5B developing third generation CDMA technology
PUMA 1.4B 1.1B mobile device management and synchronization
ELON 1.3B open platform systems integration software
ANCR 1.3B 2.1B fibre channel products
DSGX 1.1B supply chain management support software

This group has the least amount of Due Diligence done on them, and they get added and kicked off all the time. I really enjoy catching a winner at this stage. I confer with other individual investors, follow the news, read the message boards, and just root around looking for these. Many thanks go to my friends at Wizards Call and those that have helped me and kept me straight on my own investing journey. Feel free to challenge any stock here, and add any that you think have promise.

CRTJF			encryption security for wireless, a Canadian company
WILIF wireless protocol
PCCLF internet company
NTCT 756M application flow management solutions
LQID 715M secure digital audio download software
ILOG 666M 350M resource and data optimization services
MGIC 637M enterprise client/server applications
LEAF 626M E-publishing and E-content software solutions
CYBR 560M integrated medical delivery services
JCDA 532M 355M existing host centric internet solutions for business
GWRX 521M mobile device e-commerce and information services
NSATF 505M 213M satellite systems and parts, and Direct TV
SBAS 436M IT support structures
IFCI 417M telecommunications equipment services
DSTM 402M industrial procurement services and support
XYBR 308M mobile computer systems enhancement
ICOM 304M convergence of voice, data, and video networks
RMKR 286M customer relationship management solutions
SCII 235M wireless multimedia and internet communication apps
SGAI 219M mission critical solutions to marketing industry
ENON 199M ISP in the UK with web development and content
OPTK 146M B2B electronic commerce solutions
INPT 64M XML network personalizing software They grew 1300%
ISCO 48M PCS and telecommunications enhancements

Hope you enjoyed your journey through my watchlist, and my best quesses as to where we are going and who's going to be there.
Caveat Emptor, as usual consume with the appropriate amount of salt.
Ted

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