Email this page Format for printing Reuse/Reprint

January 9, 2001

Closing Market Numbers

DJIA             10572.55 -48.80 -0.46%
Nasdaq            2441.30 +45.38 +1.89%
S&P 500           1300.80  +4.94 +0.38%
Russell 2000       463.95  +2.31 +0.50%
30-Year Bond    111 28/32  +1/32  5.43% Yield

Fool 50           1,685.57  +8.31 +0.50%

Inside Today's QuickNews

1. Roundup: Chris Rugaber on Nokia, Tom Jacobs on Rambus, Fools on i2, small cap investing, JDS Uniphase, and more.
2. Today's Market Movers: Top news and active stocks.
3. Editors' Pick: One great feature you shouldn't miss.

i2's Good News
By LouAnn Lofton (TMF Lou2) and Paul Commins (TMF Buster)

i2 Technologies announced yesterday that it will surpass revenue and operating income projections for its fourth quarter. Even more interesting is the company's new partnership with A.T. Kearney, a consulting division of EDS. i2 and A.T. Kearney will go after the strategic sourcing market, which many see as a lucrative new possibility for B2B companies. With this move, i2 will be competing even more with Ariba. Questions remain for i2, though, about this move beyond its core business.
FULL STORY

FOOLISH EIGHT PORTFOLIO
Setting Expectations for Small-Caps
By Brian Graney (TMF Panic)

Valuation can be boiled down to setting expectations about the future and then comparing them to the market's current price. An expectations model is one way to take both of these elements into account and think about a company's valuation. With the added perspective provided by the model, a small-cap investor can make better judgements on valuation-related matters.
FULL STORY

Infosys Reports Positive Results
By Mike Trigg (TMF Tonto)

High-quality products and services and the ability to attract and retain India's most talented programmers have contributed to Infosys' tremendous growth. Telecommunications, particularly the wireless and broadband markets, remains an important area. Also, with software services companies getting hammered in the markets lately, rumors loom regarding Infosys acquisitions.
FULL STORY

DRIP PORTFOLIO A QuickNews Extra
Drips vs. Inexpensive Brokers
By George L Smyth

The advantages of convenience and ability to time purchases through a Pseudo-Drip (or very inexpensive discount broker) do not typically outweigh the advantages of fee-free traditional Drips in George Smyth's opinion. With Drip investing, costs should largely guide your purchase route decisions.
FULL STORY

Barnes & Noble Warns of Lower Earnings
By Rex Moore (TMF Orangeblood)

Barnes & Noble expects to miss fourth-quarter estimates by some 11% for its bookseller segment and a whopping 82% for its video game and entertainment software segment. January sales appear to be back on track, however.
FULL STORY

Biotechs Shaved For No Good Reason
By Tom Jacobs (TMF Tom9)

The entire biotech sector -- without regard to individual businesses -- took a major hit yesterday. But the key for investors is to take a long-term look at individual company prospects, not the ebbs and flows of sentiment towards a sector. Several companies reported good news yesterday -- news that bodes well for their businesses over the long run, regardless of whether or not their stocks are flavors-of-the-day.
FULL STORY

RULE BREAKER PORTFOLIO A QuickNews Extra
Ruling on Rambus
By Tom Jacobs (TMF Tom9)

Not everyone agrees whether memory chip designer Rambus is a true Rule Breaker. The center of the debate is whether Rambus has a sustainable advantage gained through business momentum, inept competition, patents, or visionary leadership. Can Rambus -- or any intellectual property company -- meet those criteria? Yes, but only if you accept that an IP company, which doesn't make the products containing its technology, can have a sustainable advantage, and that Rambus' patent defense won't drive customers to technology beyond Rambus' patent moat.
FULL STORY

RULE MAKER PORTFOLIO A QuickNews Extra
Putting JDS Uniphase in Context
By Richard McCaffery (TMF Gibson)

Rethinking the Rule Maker Portfolio's investment in JDS Uniphase brought in a lot of hate mail from readers. The two questions JDS investors have to ask about the company is whether they bought it at a price that leaves room for future growth, and whether it fits into an investment strategy they are comfortable with.
FULL STORY

FOOL'S DEN A QuickNews Extra
Considered REITs? Buffett Has
By Todd N. Lebor (TMF TeeTime)

Looking for tamer investments? Need something to round out that tech-laden portfolio? Try real estate investment trusts (REITs). They offer a dividend yield, tax benefits, predictability, and a hedge to inflation and technology investments. Take another look at this misunderstood market -- Warren Buffett has.
FULL STORY

FOOL PLATE SPECIAL An Investment Opinion
Egghead Cracked But Not Compromised
By Nico Detourn (TMF Nico)

E-tailer Egghead.com said Monday that a two-and-a-half week investigation uncovered no evidence that credit card numbers were stolen from its website during a pre-Christmas break-in. If so, it's only some egg on the company's face. But Egghead wasn't the only victim of a holiday hack, and the security breach is a reminder of the vulnerability of online businesses.
FULL STORY

Nokia's Sales Spook Analysts
By Chris Rugaber (TMF Chris)

Finnish powerhouse Nokia issued preliminary sales figures earlier today that were slightly below expectations, sending analysts into a tizzy and the shares of Nokia and other mobile phone companies lower. Nevertheless, today's numbers do not represent a substantial change in the company's own projections.
FULL STORY

FOOL ON THE HILL An Investment Opinion
Accounting for Non-Paying Customers
By Whitney Tilson

Some customers invariably end up being deadbeats, so every company reports an "allowance for doubtful accounts." Unusual changes in the allowance for doubtful accounts might precede blowups at some companies. Whitney Tilson looks at three examples: Lucent, Gateway, and Manugistics.
FULL STORY

BREAKFAST WITH THE FOOL
Amazon's Elusive Billion-Dollar Quarter
By Rick Aristotle Munarriz (TMF Edible)

Amazon.com (Nasdaq: AMZN) is still the king of the e-tail hill. The company released preliminary fourth-quarter results that found sales climbing by more than 40% to at least $960 million. The fiscal showing did miss the magical billion-dollar mark some analysts had been hoping for. However, the results fell within the range of company projections.
FULL STORY

Today's Market Movers

Ups

Avici Systems (Nasdaq: AVCI) spiked up $6.44 to $26.19 on coverage of its attack on the high-speed networking equipment market dominated by Cisco Systems (Nasdaq: CSCO) and competitor Juniper Networks (Nasdaq: JNPR).  AT&T (NYSE: T) also announced the debut of its Internet Protocol coast-to-coast network, which uses Avici products.

Speaking of AT&T (NYSE: T), the company called up over 12% to $22.50 on analyst upgrades and news of its web-hosting operations. The company plans to build eight new Internet data centers in 2001, to beef up its operations and compete with the likes of WorldCom (Nasdaq: WCOM), Exodus Communications (Nasdaq: EXDS) and Intel (Nasdaq: INTC). Data hosting centers offer security and high-speed Internet connectivity for Web, database, and application server computers.   

E-Commerce consultant Sapient (Nasdaq: SAPE) jumped up $3.63 to $16.81 after a relentless selloff that began in August. The company last week estimated Q4 revenues of $139 million and EPS of $0.10, under analysts' estimates of $143 million and $0.12. The entire sector has been hit with reduced expectations of dot-com spending, but investors may be differentiating among the companies with actual profit and revenue growth. Sapient falls into this category, with projected Q4 revenue growth of 70%, and EPS increases of 25%. Full-year increases for revenue and EPS are seen at 81% and 48%, respectively.

Enterprise software maker BroadVision (Nasdaq: BVSN) bounced back $2.44 to $13.31 on news that it would join Broadbase Software (NASDAQ: BBSW), Interwoven, Inc. (NASDAQ: IWOV), Verity, Inc. (NASDAQ: VRTY) and Deloitte Consulting to build a California government portal. The Fool recently interviewed BroadVision CEO Pehong Chen, whose company's stock has fallen from a 52-week high of $93.28, and the Fool's Mike Trigg thinks BroadVision is a model company.

Downs

Wireless communications giant and Rule Maker port holding Nokia (NYSE: NOK) continued its slide down today, losing $3.81 to $39.31 after yesterday's news of 64% growth in handset sales failed to satisfy analysts, who had projected a larger increase for the Finnish phone king. Nokia said it sold 128 million phones in 2000, 64% above 1999's 78.5 million, but lower than the expected range of 130 to 140 million. Chris Rugaber covered the news today for the Fool.  

Home products retailer Cost Plus (Nasdaq: CPWM) sold off $7.50 to $19.19 after announcing that it expects disappointing Q4 results. The company sees Q4 EPA of $0.87, up from year-ago $0.82, but well under analysts' consensus expectations of $1.01, with full-year EPS to cash in at $1.00, versus expectations of $1.15. The company also projects a 2.0% Q4 same-store sales increase, against 8.1% last year, and with a 4% estimate for 2001. The retailer also said it would scale back its planned expansion to 23 stores from 30.   

Voice and data network equipment provider Ditech Communications (Nasdaq: DITC) echoed off $3.59 to $7.03 after estimating lower earnings for its Q3 ending Jan. 31, 2001, and the rest of its fiscal year. Ditech estimates that its Q3 EPA will range between break even and -$0.05, with fiscal year EPS at $0.84 to $0.95, against analysts' estimates of a full $1.85. The company ascribed the lowered expectation to two factors: delays in shipping its new echo cancellation product, and -- you guessed it! -- lowered telecommunications infrastructure spending.

Outback Steakhouse (NYSE: OSI) sliced off $2.44 to $22.06 after advising analysts to lower their expectations for the quarter ending Dec. 31, 2000, by between 15% and 18%. The company attributed the negative news to lower sales, higher labor costs, and start up costs for new concept stores. In particular, the company noted average unit volumes for domestic Outback Steakhouses decreased 0.4% for the 5-week period ending December 30, 2000, compared to 1999. However, average unit volumes for Carrabba's Italian Grills increased 9.3% for the same period over the previous year. The company also operates Roy's and Fleming's Prime Steakhouse and Wine Bars.

Editors' Pick: One Great Feature You Shouldn't Miss