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John Bollinger BEST SE AXR WDFC Digital Cameras Expand Mkt
An SI Board Since December 1998
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Emcee:  Mark Johnson Type:  Unmoderated
The Internet Financial Connection, December 25, 1998

Presented by Mark Johnson, Editor of the IFC

It appears exclusively on Silicon Investor


To Subscribe to this Newsletter: Send an email to
with "subscribe" in the message body.

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Due to the holidays and timing contraints,
the next issue of the IFC will be on January 7,
1999. Happy Holidays from the IFC!

Mark Johnson Editor IFC


This newsletter can be viewed at

In This Issue:

1. John Bollinger's Outlook on Technology Stocks
2. Best Software
3. Sterling Commerce & AMREP Corporation
4. WD-40 Company
5. Digital Cameras To Expand Hard Disk Drive Market
6. Interesting Articles On The Internet by Joe Dancy
7. Highlights on SI: by Tom Taulli
8. Disclaimer


John Bollinger of Bollinger Capital Management
and, provides the
following interview with Mark Johnson, editor
of the IFC. Below is the write up.

The technology indexes continue to burn rubber.
The NASDAQ Composite, which dropped to a low of
1,350 in October just surpassed 2,150. Likewise,
the Morgan Stanley High Technology Index, which
dipped below 500 in October, has recently gone
over 850. So, does this mean technology stocks
have run their course and might start to head
down? Not according to John Bollinger of
Bollinger Capital Management. "There seems to
be quite a bit of strength left in the
technology area... We understand that they
moved up significantly here but, it does not
appear that technology stocks have come too far
too fast," he says.

John mentions that technology stock indexes
recently went through a consolidation pattern.
There was a high degree of volatility and
prices essentially moved sideways in a very
wide pattern. From a technicians point of view,
this is called a "Bull Flag." "That pattern
has been resolved to the upside... This is
quite bullish."

John bases his work on a model of the market
which he calls a "pyramid." This pyramid puts
the market at the apex of the pyramid.
Underneath that pyramid is 15 market sectors.
Under those 14 sectors are 137 industry groups,
and at the base of the pyramid are 3,700
individual stocks. John notes that if the
market, sector, group and stock are all in gear,
you have an increased probability of success.
The 4 groups of the pyramid can be compared to
an Olympic rowing scull. If all are rowing
together, the scull can move quickly and
powerfully to its goal. If one rower stops
rowing, the sculls progress is "severely
impeded." He calls this "group power." John
offers an excellent charting web site at That web site will
let you analyze and evaluate stocks using John's
techniques. To better help you move through their
web site, click Help at the bottom left of their
web page. That will explain what you need to know
and how to use their web site.

One technology area that has been strong and
looks favorable is the Diversified Technology
sector. Within that group; Tektronix (TEK 29 3/4),
International Manufacturing Services (IMSX 10),
Perkin-Elmer (PKN 96 3/8) and Rockwell
International (ROK 47 7/8) look favorable,
according to John. His absolute favorite in that
group is Tektronix. "Their stock has run from the
mid teens to the highs 20's, went sideways for a
few days and started to head back up again... This
is the very signature of a strong stock," he says.

Another sector that looks favorable using John's
criteria is the semiconductor sector. One he likes
in that area is Texas Instruments (TXN 85 7/8).
After a recent strong 5 day run-up in their stock
price, the shares of Texas Instruments completed a
classic pullback after making a new high. Their
stock found support at the level of the prior
consolidation for a couple of days and then started
moving higher. "That is about as perfect of a
pattern as these stocks make!," he says, "We would
expect Texas to make new highs here." In the
semiconductor area, John likes
Semtech (SMTC 33 7/8) and Micrel (MCRL 49).

In a very mellow relaxed tone, John says, "These
Internet stocks are just wild." The Internet area
still looks appealing to him. One stock he likes
in that area is CNET (CNWK 54 1/2). Their stock
broke out to the upside starting around the
beginning of November. It then corrected and
found support in the area from where it originally
broke out. Within the last 5 trading sessions,
their stock started to move up. "CNET looks very
attractive to me."

Some other technology stocks he is bullish on are
Dell (DELL 79 1/2), Compaq (CPQ 443 1/8) and
Nokia (NOKa 123 5/8). In the non technology area,
a stock John is favorable on is
Granite Construction (GVA 32 3/4). "Their stock is
completing a consolidating pattern and has great
potential for breaking out to the upside... It is
just a matter of time before it clears resistance
in the $33 or $34 area and breaks out to a new high."

As for the overall market, John thinks there may be
some short-term volatility. Towards the beginning
of the new year, he thinks the overall market will
continue to move to the upside.



Steve Kensinger of Wilke/Thompson Capital
Management provides the following stock idea
on Best Software (BEST 20 3/4). Below is
the write up.

Best Software is a maker of accounting and
HR (Human Resource) software to small and
middle size companies with over 40,000
customers. Like most stocks in the current
stock market environment, Bests' stock has
been volatile. Their shares slipped from a
52 week high of $28 in November to $18 recently
and has started to move back up.

"Best has been a successful company and
has a good reputation for their software,"
says Steve Kensinger of Wilke/Thompson Capital
Management. "They are piggy-backing on the
success of Microsofts Windows & NT and are
compliant with those platforms. As the NT
installed base grows, which it should
dramatically over the next several years, so
should Best's sales of its application
software." He notes, Microsoft NT based
servers are allowing small and mid-size
businesses access to computing power that
was only previously available to
larger corporations.

Best has a line of new software packages
coming out that will allow more functionality.
"This new software will allow them to move
upstream into larger businesses," says Steve.
About one half of Bests' revenues come from
software license fees. The other half of
revenues come from maintenance fees for
contracts and are typically renewed. So,
there is a recurring revenue stream that
is consistent.

According to analyst estimates, Best is
expected to earn close to $0.90 in 1999
versus projected final earnings of $0.69
this year. Steve thinks they can grow in the
25% range during the next 3 to 5 years, with
their stock hitting the mid 30's within
the next 12 months.

There is a thread that discusses BEST on SI.
Subject 18349



Bob Mann of First Georgetown Securities provides the
following stock idea on Sterling Commerce
(SE 40) and AMREP Corporation (AXR 6 1/2).
Below is the write up.

"Tis the season to be Jolly." That's what
many of the shareholders of highflying Internet
are singing. Electronic retail (e-tail) over
the Internet this holiday season, as everyone
already knows, is expected very strong., the book, CD and movie retailer was
trading around $125 per share in early November.
Their shares hit $329 per share recently!

The Internet will revolutionize retail in many
different ways but, many investors question
their sky-high valuations. One company that is
benefiting from electronic commerce (EC) over
the Internet is Sterling Commerce. They are a
leading provider of EC software products. "They
do not make the software used to buy grandma a
sweater over the Internet," says Bob Mann of
First Georgetown Securities. Sterling enables
companies to securely engage in
business-to-business electronic transactions.
Click here to read a profile on the company.

Bob notes that Sterling has had excellent
earnings growth. They posted $350 million in
revenues for fiscal year ending in September of
1997, $490 in 1998 and should have revenues in
the range of $650 to $700 million in 1999. He
is comfortable with analysts earnings estimates
of $1.60 in 1999. "I think Sterling could easily
trade at 35 times 1999 earnings or $56 within
the next year," he says.

Another stock Bob likes is AMREP Corporation.
Their company is essentially two different
businesses. One is a magazine wholesale
distributor, the other builds homes, developments
and sells land. When the market sold-off from July
to September, so did AMREP. Their shares fell from
$9 1/2 to $6. On top of that, they just reported
earnings in their most recent quarter of $0.05
versus earnings of $0.34 last year.

One reason why earnings were not so rosy was
because they fell on decreasing land sales. "In
some quarters they sell land and in some quarters
they don't," says Bob. He figures AMREP has a book
value of over $10 per share and should earn between
$1 and $1.20 for fiscal year ending July of 1999.
Click here to view their earnings history. "You
don't find very many companies that make money like
that and trade at this much of a discount to book
value," he says. He thinks their stock can hit close
to $10 within the next 6 to 12 months.

There is a thread that discusses SE on SI.
Subject 18152



Michhael J. Funke of the MJF/Ruta Financial
Newsletter <>
provides the following stock idea on
WD-40 Company (WDFC 29). Below is his
write up.

WD-40 Company's products are used in four
out of five U.S. households, and the odds
are that you have a con of their
petroleum-based product on your work shelf
or in your garage right now.

The Company's products, which now include
WD-40, 3-IN-ONE Oil, (a drip oil lubricant),
and T.A.L 5 (an extra-strength synthetic
lubricant developed for industrial
applications) are sold through retail outlets
and industrial distributors in over 150 countries

After more than four decades of being identified
with a single petroleum-based product (WD-40),
this Company has dramatically shifted its
corporate identity and strategy. With the
acquisition of the 3-IN-ONE Oil brand in
December, 1995, and with the introduction of
its new T.A.L 5 brand in early 1997, WDFC has
become a Company no identified with three
strong products.

The Company's goal is to dominate the entire
category of lubrication products by combining
the smaller niche markets targeted by 3-IN-ONE
Oil and T.A.L 5 with the broad-based market held
by the WD-40 brand.

The Company developed its newest product,
T.A.L 5, which stands for Triple Additive
Lubricant/5 functions, as an extra strength
synthetic spray lubricant for heavy-duty
applications. The product resists breakdown due
to corrosion, friction, temperature, load and
motion. It can be applied to rubber, metal or
plastic and will provide long-lasting strength
and durability. The Company intends to target
this product at specialized users in the trades
and general manufacturing industries.

While WD-40's revenues and earnings growth has
been impacted somewhat by the Asian economic
crisis over the past 18 months, the Company pays
an outstanding 4.3% dividend and is well-positioned
for future long-term growth well into the next
century. The shares of WD-40 Company are recommended
for purchase for long-term growth/income
oriented accounts.



Joe Dancy, co-editor of the IFC and editor of
the The Lone Star Growth Investor
provides the following commentary.
Subscriptions to his newsletter are FREE.

"Digital Cameras To Expand Hard Disk Drive Market"

The title describes it all.

To conserve bandwidth, please use the link
below to access the article.



Joe Dancy, co editor of the IFC and editor
of The Lone Star Growth Investor
provides the following links to Interesting
Articles On The Internet. These articles were
from a daily worldwide search of over 150
newspapers and magazines. Subscriptions to his
newsletter are FREE.


Bandwith shaping up as the big topic in 1999.
A PricewaterhouseCoopers tech forecast released
early this month predicts demand for interactive
services will severely challenge the ability of
the Net's infrastructure to function properly.
Some say demand for bandwidth will increase
tenfold every single year through the next decade.

Internet stocks are rebounding even higher,
turning high-tech millionaires into billionaires
- and beyond.

Analysts who cover, one of the top
names in the emerging world of e-commerce, fell
into sharp disagreement last week about where the
online book- and music-seller is headed. One
analyst things the company is worth $400;
another $50.

Internet commerce is finally starting to yield
results -- online purchases are at levels that
exceed estimates.


The industry has advanced rapidly in the five
decades since Berkeley's researchers manipulated
800 bits in a square inch. Today's most-advanced
hard disk drives can cram more than 5 billion bits of
data -- five gigabits -- into that same square inch.

Orders for advanced IC production systems are
helping to prop up the troubled semiconductor-equipment
industry. SEMI's book-to-bill index rose to 0.84 from
a revised 0.75 figure for October. A ratio of 0.84
indicates $84 in new orders are being received for
$100 worth of products shipped.

The efforts of PC makers to reduce inventory and
streamline production and distribution operations
is starting to pay off, according to a report issued
by San Jose-based research firm Deloitte Consulting.


What will 1999 bring in the stock market? One
predictor of stock market performance that, while
crude, has been uncannily accurate since at least
1832 - and predicts significant gains in 1999.

With some 50 million American households now with
money in the market. So why bomb Iraq? Bomb the stock
market. Don't think the president would jeopardize
the nation's financial well being just to save his
job? Nobody thought he'd attack Iraq either.

Boring but safe. That's the investment theme Wall
Street strategists recommend for investors looking to
buy stocks in the face of President Clinton's

High-flying technology stocks are due to come in
for a landing next year, according to top Wall
Street strategists. It's not just the Internet
stocks, where valuations are ridiculously out of
whack, but even profit-producing tech companies
that are likely to witness a loss in market
capitalization in 1999.

Stock market chugs along in own world

The five largest announced acquisitions of 1998
would, upon completion, rank as the top five in
history. Investors should expect this merger
barrage to continue, prompted by confidence in
the stock market and factors unique to each
industry, predicts Gary Finger, director of
mergers and acquisitions with Houlihan, Lokey,
Howard & Zukin.


Japan's government slashed its forecast Sunday
for economic performance this year, predicting
a contraction of 2.2 percent as the country battles
its worst postwar recession.

Inflation remains tame--for now

Forecasters expect growth to slow in '99



The Taulli Report, Voices of SI: by Tom Taulli

For a weekly e-mail newsletter of The Taulli
Report, e-mail <>

Few fans of AT&T, iMall deal

Yahoo! deal boosts Onsale

Rave reviews for CMGI a rich idea

Amazon price target causes stir

InfoSpace IPO: A return to sanity?



DISCLAIMER: All information contained on this page are from the
authors cited. The information is believed to be reliable but
there is no guarantee to its accuracy. Stock ideas presented by
mutual fund managers, money managers, newsletter writers and SI
participants may be bought or sold by them anytime before or
after being presented in this newsletter. Anyone purchasing the
stock ideas above should consult a financial advisor before doing
so. The stock ideas mentioned above are not solicitations to buy
or sell but to provide people with information from many sources.
I (Mark Johnson editor of the IFC) am not paid any fees by the
above writers nor by the companies represented. The stock ideas
may represent a starting point for investors. People are
encouraged to do their own homework before buying any stock.
Neither Silicon Investor or the Internet Financial Connection
will be responsible for any loss occurring from
the purchase or sale of the above securities or any securities.

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with "subscribe" in the message body.

Please tell a friend about this newsletter :)

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