Pundits Say the Darndest Things

SAN FRANCISCO (01/23/2000) - David Rynecki, Fortune Upshot: Red-hot networking stocks can burn investors.

There's Hot and Then There's Just Dumb: Is there still money to be made on jigged-up infrastructure stocks like Juniper Networks and Sycamore Networks?

According to Marc Klee, comanager of the John Hancock Global Technology fund, even breathtaking sales and profit growth can't justify a multiple of 1,686 times sales for Juniper and 528 times for Sycamore.

The Jury Is Out: As for Netcos whose products serve as network traffic cops - outfits like Redback Networks and Foundry Networks - even bullish analysts can't decide whether they're future leaders or future divisions of Cisco.

Quote: "One thing is sure, though: Any investor who does buy in today had better tolerate risk."

Adam Lashinsky, TheStreet.com

Upshot: One b-to-b stock sings, the other doesn't. Momentum is the reason why.

Separated at Birth: Internet Capital Group and FreeMarkets have fast-growing businesses, smart management and wildly overvalued market caps. But ICG is managing to rise on absolutely no news, while FreeMarkets continues to tank.

Do You Believe? ICG's shtick is to own stakes in companies that maintain an electronic market for mundane goods like plastics or livestock. Even though the company holds positions in 27 of the 50 global commercial markets in which it intends to play, its $35 billion market cap is still a leap of faith.

Scarlet Letters: FreeMarkets' game is to round up bidders on industrial projects. Ever since it announced on Jan. 4 that its biggest client, GM, was bolting, its stock has been in free fall - down about 50 percent - and shareholders are suing.

Quote: "Is there anything wrong with FreeMarkets? Despite the loss of GM, probably not. Right now, it just doesn't have momentum. But at $171, it's still more than a 'three-bagger.' That used to be considered a success."

Paul R. La Monica, SmartMoney.com

Upshot: When all else fails, try the Internet.

Getting Religion: Six-dollars-a-share Sunbeam hopes for redemption with a line of "smart appliances" that connects to the Net and with a new subsidiary, Thalia, to make them. Is a Thalia tracking stock or IPO on the horizon?

Magicians They're Not: "No matter how 'smart' Sunbeam's new smoke detectors and mixers may be, they're not smart enough to eliminate a more-than-$2-billion debt load or prevent at least another year of red ink."

Iffy Market for Brainy Toasters: "Sunbeam is still a big risk. Anyone who buys the stock now is making a huge bet that its smart appliances, which will not even be in stores until sometime next year . . . will save Sunbeam from its ignominious past."

Behold the Power of the Magic I-Word

SmartMoney.com

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