This is the Wall Street Universe, by their own admission scroll down and
feast your eyes sir.'
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TO UNSUBSCRIBE CLICK HERE: mailto:[log in to unmask]
October 13, 1999
SUBSCRIPTIONS TO THIS E-MAIL NEWSLETTER ARE ALWAYS FREE!!!
Wallstreet Universe welcomes all our new readers as well as
those of you who have been with us in the past. We are
published once per week to over 25,000 subscribers. You
have either subscribed to Wallstreet Universe, Stock Pick Of
The Month, or one of our Partner - Associate websites.
Here is a description of our newsletter, in case you don't
already have it: Wallstreet Universe is a free e-mail based
newsletter for people who are interested in the Internet,
New Technology, Computers, Small-cap and OTC Growth stocks.
We also publish special bulletins and we provide a news
service for announcing exciting Corporate Information.
IN THIS WEEKS EDITION:
1) Inventions by African Americans
2) Population - Six Billion!!!
3) Virus Alert
4) iexchange - a new Idealab Company
5) Knight/Trimark - one to look at
6) This Weeks Question
7) Costco on a roll
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INVENTIONS BY AFRICAN AMERICANS:
A site that is dedicated to Black people who have made
contributions to the world with their inventions.
http://www.inventorsmuseum.com/africanam.htm
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SIX BILLIONTH PERSON BORN YESTERDAY.
At U.N. headquarters, a population clock ticked off the
world's six billionth human among the 370,000 babies born
Tuesday. many are destined for a future of poverty and
illiteracy. In Bosnia, visiting U.N. Secretary-General Kofi
Annan marked the milestone by honoring a boy, born two
minutes past midnight to Fatima Nevic in a Sarajevo
hospital, as the world's symbolic six billionth person.
Bangladesh organized a parade; London planned a rally and
China, with the world's largest population of 1.25 billion
people, held an array of ceremonies.
It took almost all of human history -- until 1804 -- for our
numbers to reach 1 billion. About 150 years later, in 1960,
we were 3 billion. Just 40 years after that, we're reaching
6 billion. And more than 1 billion of us are between
the ages of 15 and 24. That's the largest-ever generation
of young people on the planet, growing up right now.
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VIRUS ALERT
If you receive an email titled "It Takes Guts to Say Jesus"
DO NOT OPEN IT!!!!!!!!!1
It will erase everything on your hard drive. This
information was announced Monday morning from IBM; AOL
states that this is a very dangerous virus, much worse than
"Melissa", and that there is NO remedy for it at this time.
Some very sick individual has succeeded in using the
re-format function from Norton Utilities causing it to
completely erase all documents on the hard drive. It has
been designed to work with Netscape Navigator and Microsoft
Internet Explorer. It destroys MacIntosh and IBM compatible
computers. This is a new, very malicious virus and not many
people know about it. Pass this warning along to EVERYONE
in your address book and please share it with all your
online friends ASAP so that this threat may be stopped.
Please practice cautionary measures and tell anyone that may
have access to your computer.
Forward this warning to everyone that might access the
internet and tell them you were warned by Wallstreet
Universe
We apprecite your support.
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GETTING ANALYST FROM BOXER SHORTS NOT SUITS.
A startup backed by Idealab of Pasadena, CA and Kleiner
Perkins Caufield & Byers hopes to breed a new group of
investment analysts. iexchange http://www.iexchange.com
launched its services Monday. It gives individuals the
opportunity to give investment advice for FREE or to sell it
for $1 or more. In turn, iexchange will split the revenue
with the authors of the investment report. To provide
accountability, iexchange will score the performance of each
contributor, showing his or her overall returns, directional
and predictive accuracy, and other metrics. "We can bring
order and accountability to a vastly disorganized
marketplace," said David F. Eisner, iexchange CEO and a
former executive at Jefferies & Company, a Los Angeles-based
brokerage and investment banking firm. iexchange, joins a
growing number of websites, that put value on an
individual's opinion such as:
epinions.com http://www.epinions.com
Productopia.com http://www.productopia.com
Predict it.com http://www.predictit.com
iexchange hopes to attract newsletter writers, retired
professionals who are knowledgable about specific
industries, and others interested in selling their
investment advice.
And just think, here at Wallstreet Universe you get it all
for free!!!
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KNIGHT/TRIMARK, TOO LOW TO IGNORE
Knight/Trimark (NASDAQ: NITE) made it official this morning.
The third quarter is going to fall well short of
expectations. The market maker warned that its quarterly
profits will be between $0.17 per share and $0.19 versus the
already-reduced consensus estimate of $0.30 per share.
CEO Kenneth Pasternak stated "there were decreased trading
volumes and greater than expected seasonality in the
marketplace." Internet trading was down 5% to 10% for the
third quarter, and Knight receives approximately 40% of its
business from online brokers.
Analyst Sean Chin of Merrill Lynch cut his near-term rating
on Knight/Trimark to 'neutral', while maintaining a
long-term 'buy' recommendation on the stock.
Despite the enormous shortfall, Knight is expected to report
revenue of $138 million, 49% better than the prior year.
Profits will also show a greater than 40% increase. These
numbers pale in comparison to prior quarters however, where
200%-plus growth was achieved when the markets were soaring.
There were a few reasons why Knight's stock has persistently
sold off. The most obvious has been the market maker's
association with online brokers, who own about 20% of the
company and still account for about 40% of its transactions.
Charles Schwab (NYSE: SCH) Ameritrade (NASDAQ: AMTD)
E*Trade (NASDAQ: EGRP)were all cut by more than 50% over the
summer. Many investors claimed that summer volume was just
seasonably light and would pick up in the fall. Well, a few
rate hikes later, trading volume and volatility have yet to
pick up from the summer.
As a market maker Knight/Trimark thrives on market
volatility, especially as trading volume increases. The
company makes the bid/ask spread by fronting its own capital
to execute trades on the market.
When Knight went public last year, about 60% of the shares
were owned by Knight management and the online brokers that
first created Knight. There was a one-year lockup period in
which these 'insiders' could not sell their shares. Even
given the stock's turbulent ride, shares are up over 300%
from their IPO price.
Insider profit-taking was inevitable, but the brokers
especially have unloaded a good amount of shares. Don't be
too worried though, these brokers have $1 billion in
advertising to pay for, and management still owns a
significant 29% of the shares outstanding.
While Knight's stock price has fallen drastically, its
strategy and fundamentals remain strong.
In July the company took a 19% stake in the EASDAQ, a
European market system similar to our domestic Nasdaq.
While the $8 million investment is small, Knight and its
partners (including Goldman Sachs and Morgan Stanley Dean
Witter) are positioned to coagulate a highly segmented
market. The investment could be extremely lucrative for
Knight, which already has a European presence with its
London office.
Knight has also switched over to use Merrill Lynch
(NYSE: MER)for the clearing of its trades. Knight
management said that the deal would save the company 6 cents
a share for each trade it makes. Given the company's
current volume, this will add 4 cents a share to the bottom
line each year.
Knight's third quarter results will hamper the stock's
performance for the rest of the year. Alot of investors
have by now realized the company's long-term potential, as
chronicled in many articles.
In its short existence and meteoric rise to $81 per share
it has rarely known slow times, and people want to see how
much leverage Knight's business model can squeeze out of
sequentially lower trading volumes. Investors will be
looking to the earnings reports from online brokers such as
Schwab and E*Trade due later this week, to see how well
they handled the slow quarter.
Eight out of nine analysts continue to rate Knight a
long-term buy, and published 12-month price targets range
anywhere from $58 to $98.
Charlotte Chamberlain of Jefferies & Co. said that Knight
"Is the best buy in the e-brokerage sector-- the company is
already profitable." As for the online broker/owners
selling, she assured that they have no reason to look
elsewhere for their trade execution.
With over $250 million in cash and no debt on its balance
sheet, look for Knight to be making some more acquisitions
-- possibly kick-starting the company's desire to start an
options exchange.
At $25.56, Knight/Trimark is trading at a mere 19.7 times
the Street's fiscal 1999 earnings per share estimate of
$1.30 per share. Knight is trading at a gross discount to
its earnings potential, considering management said that the
company will continue to post at least 30% growth
year-over-year.
After it clears the hurdle of its third quarter earnings,
the road ahead looks very clear for Knight. Knight/Trimark
is the largest and most efficient market maker and its
recent strategic moves have made the company less dependent
on its online trade clearing. The company will prove in the
following quarters that its business model will succeed even
in slow times.
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LAST WEEKS QUESTION WAS: Here are three lines of a song from
a Comedy-Cult movie. Name the movie that the song comes
from?
I gave my love a cherry that had no stone.
I gave my love a chicken that had no bone
I gave my love a story that had no end.
THE ANSWER IS: Animal House staring John Belushi
THE WINNERS ARE: Chicago_Sailers Joel Thomas
Bud Pearce Jim Cannon and John g kimo
Congratulations to the winners and please send an e-mail
with your name, address and phone number to the below
address so that we can mail you your Blockbuster Gift
Certificate. mailto:[log in to unmask]
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
THIS WEEKS CONTEST: Please e-mail your answer to
mailto:[log in to unmask] We will award 5 lucky winners
chosen at random, who answer the question correctly, a $20
GIFT CERTIFICATE to Blockbuster Video. We will announce the
winners on next week's newsletter.
QUESTION: The singer Gloria Estefan is the spokesperson for
this Internet Company?
GOOD LUCK!!!
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COSTCO ON A ROLL
Costco Wholesale (NASDAQ: COST) is certainly on a roll
heading into the all-important holiday season. The company
said that in the fourth (August) quarter, earnings per
share grew 20% to $0.79, beating consensus forecasts by
$0.03. Overall net earnings increased 22% to $183.2 million.
Revenue grew 14% to $8.7 billion. Even more impressive,
same store sales swelled 12% for the quarter.
Costco operates nearly 300 wholesale warehouses, most of
which are in the United States. The company is known for
offering low prices on merchandise like fresh foods and hard
lines to its customers. The catch: Customers must cough up
a yearly membership fee for the privilege of shopping in its
stores.
Although its results seem rosy, the company is mindful that
it must remain nimble as it has competition from all
directions. First off there is Wal-Mart (NYSE: WMT), which
competes with its Sam's Clubs warehouse stores as well as
with its Wal-Mart Supercenters, which contain everything
from soup and other food items to nuts and bolts and
clothing to boot.
BJ's Wholesale Club (NYSE: BJ) has about one-third the
stores of Costco, vying for their slot in the wholesale club
industry. But Costco has been churning out better
same-store sales growth, as BJ's was in the single digits
for the September quarter. So how does Costco plan to fend
off the competition and continue to grow at this pace?
According to Sally Wallick of Legg Mason Wood Walker, aside
from the company's traditional business there are three
catalysts to the Costco story that could provide a better
picture for the future.
First, Costco plans to expand upon its Executive Membership
program, by offering a menu of additional services to
customers. One recent example, an onsite gas station.
Second, Wallick expects Costco's website http://Costco.com
to add 800 more items, bringing the total of items for sale
to 2,000. Costco is planning to expand upon its
business-to-business offerings, such as linking its
Executive Membership program with its website. Costco's
web-related sales were a mere $15 million this year out of
$27.4 billion in total sales for the company, but the
business is expected to grow 300% to $60 million in fiscal
(August) 2000.
Thirdly, Wallick notes that the company is co-branding a
credit card for its members with American Express (NYSE:
AXP). The joint venture is still in the works, but should
be a positive for the average Costco shopper, many of whom
probably do not have 'American Express status.' Costco's
stock has been rebounding from the overall retail retreat.
However, at $83.94 it is still 11% off its 52-week high of
$93.75 a share, which was made back in early April. Daniel
Barry of Merrill Lynch took action after reviewing the
earnings, and raised his rating to long-term 'buy' from
long-term 'accumulate.' Jeffrey Edelman of PaineWebber
believes the 12-month target is $91 a share, using a
price-to-earnings in-line with the S&P 500.
Bottom Line: A company the size of Costco should attract a
price-to-sales ratio of one. If so, the stock would be
worth $105 a share, or over 30% above its present price.
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We hope you enjoyed this week's edition and we look
forward to visiting you again shortly.
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----- Original Message -----
From: Seamus Cooney <[log in to unmask]>
To: <[log in to unmask]>
Sent: Thursday, October 14, 1999 3:05 AM
Subject: Re: Virus Alert from Wall Street Journal
> I subscribe to the Wall Street Journal. No such alert was sent out by them
> to their subscribers.
>
> ----------
> >From: "N. Scott Reynolds" <[log in to unmask]>
> >To: [log in to unmask]
> >Subject: Re: Virus Alert from Wall Street Journal
> >Date: Wed, Oct 13, 1999, 5:33 PM
> >
>
> > I would consider it a hoax also if it didn't come from the Wall Street
> > Journal. Don't say you weren't warned. Whateve
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