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No. of Recommendations: 137
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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No. of Recommendations: 3
Great post, Ted!
Obviously, you've put a lot of thought and analysis into your New Paradigm port. Kudos to you!!!

I feel very fortunate to have lucked into owning no less than 11 of the stocks on your lists: DSTM DSGX GWRX NSATF ENON CMGI IONN OPTK SGAI INPT SBAS

It's reassuring to see all but one (IONN) of my favorite stocks is held in high esteem by someone as intelligent as yourself. So I must ask if you considered IONN, and if so, why did it not make your list of small caps? Just curious, because IONN seems to be emerging as a baby gorilla in the network security niche, especially with its recently announced and highly referenceable relationship with Sycamore.

Also, I wholeheartedly agree with your bullish assessment of INPT. This company is positioned for spectacular growth in the XML space. Seems like it's just a matter of time until INPT gets discovered by the masses. And when it does, WATCHOUT! There are plenty of companies sporting $1 Billion+ market caps with less revenue & slower growth than INPT. With Input's current market cap of $64 million, the stock could easily see an increase of 1600%+ when Mr. Market catches on to this undiscovered gem! It's just a matter of time... ;-)

Regards,
RightNow

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Very nice work, Ted! Thanks for posting.


NT is a serious contender too

Yes, it should be in there. I like NT and own a bunch.


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.

Of course I was the one who spent days researching and posting about AFFX here last spring. Do you think I ever got in on this one?

:(

Sometimes, I think one can do too much due diligence....


LEAF ... E-publishing and E-content software solutions

Of course you knew that BVSN is buying LEAF...I'm happy because I have both. Obviously BVSN saw something in LEAF that TMF didn't. XML is definitely an upcoming trend.



DSTM .... industrial procurement services and support

I like this one as well. Their iProcure product seems unique. And they're profitable!


Very nice list, Ted. Nice that you've included Wi-LAN and Certicom... but, hey, what about Sierra Wireless? ;)



Linda












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Ted
Thanks so much for your informative post...
It's always helpful to read yet another way to organize/think about stocks in a diversified(?) portfolio...
I always compare my holdings whenever such lists are posted on a variety of boards. It's a good exercise on rethinking why a stock purchase was made, and whether or not I should continue to hold. It's also a great way to get ideas on future purchases.
Thanks again / Gail
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Ted,

Excellent Post. Bravo!

I just came to this board from a link that Linda had posted on another board. Your post was the first I had read on this message board, and I can see that I have been missing out by not having this board in my fav's.

I actually had come over this way a while back, but the sheer number of posts turned me away. It is hard sometimes to make time to keep up on multiple boards.

I read the FAQ's to try to get a feel for the posting here and look forward to joining in after watching from a distance for awhile.

Excellent board ya'll.

Prestone
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RightNow writes:

It's reassuring to see all but one (IONN) of my favorite stocks is held in high esteem by someone as intelligent as yourself. So I must ask if you considered IONN, and if so, why did it not make your list of small caps? Just curious, because IONN seems to be emerging as a baby gorilla in the network security niche, especially with its recently announced and highly referenceable relationship with Sycamore.

Thanks for the tip RightNow. I can't imagine how this one got by me. <smile> And Sycamore not on the list either? Oh, so many good stocks, so little time !!

Thanks to you too Joelinda for your great findings. The Canadian stocks you called to my attention have all doubled and tripled since then. I agree, Sierra Wireless is a great company. I am adding it to the list. What is the Nasdag symbol for Sierra so I can begin my DD on it? I heard some recent news in it which was favorable.

Looks like it wont take long for the A List to hit 100.
Ted
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I greatly appreciate you taking the time to share your information and insight with others. Great list !
Any possibility of adding Engage?
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Ted: Sierra Wireless is a great company. I am adding it to the list. What is the Nasdag symbol for Sierra so I can begin my DD on it?


Actually, it's not listed on Nasdaq, only on the TSE as SW. YHOO will have it listed as SW:TO and BigCharts will have it's chart under CA:SW.

This is the fastest growing technology company in Canada, with 7644% revenues growth over the past 5 years. Recent significant contracts with Sprint and MCOM, over 50% market share in the type of wireless modem it produces, LT debt/equity of just 1%, and it's profitable with revenues increase of 53% in the 3rd Q compared to same Q last year.

And the stock is a triple from when I first posted here on it :)



Linda
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No. of Recommendations: 0
<editor mode on>
its PARADIGM!
<editor mode off>

But however you may spell it, this is an outstanding piece of work. Imagine what drudgery we'd each have to endure trying to round up a list of all the winners and potential winners in one place without the internet. If I could recommend a post more than once this one would be north of 100.

Regards,

Pup
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Just wondering what your thoughts are on the stock Wave Systems (WAVX). It seems to be in the same business as IONN with a similar market cap. It apparently has not produced a large amount in the way of product, but it seems to be in a position where huge growth is possible. The tech guru George Gilder is a big fan of this stock (he is on its board). At any rate, it may be a stock worth looking at if stocks such as INPT and IONN are being touted by some on this board. Suggested source for info. can be found on the WAVX message board number 2086. Keep up the good work-----you guys seem to spot many great stocks before they jump to the moon-----
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<editor mode on>
its PARADIGM!
<editor mode off>

One more time ...

<editor mode on>
it's PARADIGM!
<editor mode off>

:^)
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it's PARADIGM!

Yea, I realized that right after I posted it, but as you know the Motley Fool has no edit function once the message is posted, and the mistakes are captured in perpetuity, and now the Fool owns the rights to this post. Oh well, I hope my spelling doesn't hurt my returns!
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Hey Ted,

Thanks for sharing your list of stocks with us, it's always interesting to see what everyone is watching. Judging by the number of recommendations you've received, lots of people are appreciative of your list.

A stock that I'd suggest for your last group (disclaimer -- not a recommendation to buy) is Softnet Systems (SOFN) with a market cap of 608.4 MM as of today. I've been watching them for a while and they've recently been in the news as a satellite partner of Pacific Century Cyberworks. As NSATF and ADAP have shown, satellite plays have begun to get popular this year.

Reid.
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Thanks, Ted, for posting your excellent work. This is a great example of what makes TMF and the KP board such a great place.

Looks like it wont take long for the A List to hit 100.

If you're taking nominations, you might want to consider BLDP Ballard Power Systems... the leader in the emerging fuel cell sector.

Bill
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OfficerPup:

<editor mode on>
its PARADIGM!
<editor mode off>


Pup, you're not thinking outside of the box!<G>


Ted,

Thank you for sharing your wonderful list. My nominations would be OBAS and FORTY.


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I was in the dark of the yahoo message boards looking for light and lo and behold ran across someone linking
your post there.Something about a new paradigm.....WHAT NEXT? Maybe CNBC :) thanks again
http://messages.yahoo.com/bbs?action=m&board=16530255&tid=dsgx&sid=16530255&mid=1085
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Hi Bill:

Visiting from Bernards board.

For those of you looking into the fuel cell/alternative energy area, take a look at Satcon Technology (SATC).

A small cap of MIT origin which is actually supplying components to PLUG and an impressive list of customers. Analysts have just started to notice the stock, which has received BUY ratings from CSFB and H.C. Wainwright in the past week.

Bruce
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No. of Recommendations: 6
I want to thank everybody for their overwhelming support for this list of New Paradigm companies, and those that have contributed companies since then that have merit and are worth looking at.

I think the next exercise for me is to go through these companies group by group in the next month, and hold them accountable to some strict criteria.

For example, I feel that 25% earnings growth, and 25%revenue growth are the two main variables to look at when choosing a company, at a minimum, aside from it being in an emerging industry. A new company that is stemming it's losses as they roll out their infrastructure at a rate of 25% also qualifies.

Please help me to fine tune this list, and "take the losers out back and shoot" them, and edify the winners. Obviously we cannot own all the stocks on the list. What if we found the best 25 companies on all criteria? Wouldn't that be great?

I actually started this exercise with five clubs and a maximum of six picks per club. You can see what happened.

Ted
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Ted,

thanks a lot for sharing your thoughts. Absolutely great post, which I'm happy to see topping the best of boards for the week (currently 4th place, 92 recs).

Regarding your criteria:

For example, I feel that 25% earnings growth, and 25% revenue growth are the two main variables to look at when choosing a company, at a minimum...

I would require growth rates which are somehow inversely propotional to market cap. From a 100B$ giant I would expect the 25% you mentioned, whereas from a 500M$ company I would look for 50% or more...

Pablo
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No. of Recommendations: 1
Hi Ted,

Couldn't help but notice you have AMTD, but not NITE. Nite is the leading market maker that executes the majority of the online broker trades, and doesn't have all the advertising costs of the OLBs. Amazing growth and profitability, really beat up stock price.
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inparadise writes:

Couldn't help but notice you have AMTD, but not NITE. Nite is the leading market maker that executes the majority of the online broker trades, and doesn't have all the advertising costs of the OLBs. Amazing growth and profitability, really beat up stock price

I played NITE last year, and it was my worst loss last year. I like NITE, a strong company, good fundamentals, and all. I just can't go against market sentiment, and the trend. With so many stocks to choose from, I hope to stay with stocks that do not have a cloud hanging over them. For the life of me, I can't figure out why investors feel so strongly that the ECN's are such a threat. Maybe when the financial stocks and the OLB's take a run, NITE will join them. Will keep my eye out for this to happen

Ted
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You have done a commendable amount of research! Redback is conspicuously absent at 8.5 billion market cap. Your thoughts? Also, QCOM may slow down this year to catch up to growth.
BA
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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...

What... no Polycom (PLCM)??
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Excellent post, Ted!!

This is my first time on this particular board and you have several stocks which I have been watching (RMKR, IDC,KANA, ATHM, etc...).

Bill mentioned fuel cell leader BLDP, which I agree with, but what about PLUG, and AVA, which just happens to be the company Bill Gates (founder of the big KAHUNA on your list) recently purchased a 5% stake in.

Anyway, again, an excellent list and look forward to more news on this board.

Casey
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Ted,

I copied this back in January and was wondering if you had updated it. This was a very valuable list to go off of. Someone posted the link on the Day trading board.

Either way

Thanks for this list

John
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Those are some nice picks...
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