Yes, we have some money and we want to invest it. We seek opportunities amongst the rubble that is The Nasdaq Slaughter. Last week, Brian Lund wrote about two possible Rule Breaker buys, FuelCell Energy (Nasdaq: FCEL) and Checkpoint Software (Nasdaq: CHKP). Both have been hacked down this year. Today we consider two more possible Breaker buys.

The first is Coca-Cola (NYSE: KO). You may have heard about this company and its product; but maybe not. It makes a radical new drink that is black in color, sugary, and...

Wait. Wrong century. This is 2000, not 1900.

Coca-Cola was a Rule Breaker once, and what a Breaker it was. If only we could find something of its potential caliber today. Starbucks (Nasdaq: SBUX) was the best that we could do in 1998. Coffee has tremendous 100-year potential, and with the aid of biotech, we may get a chance to see it.

Now, our real potential buys.

Millennium Pharmaceuticals (Nasdaq: MLNM)
Ah, the new millennium, and Millennium. That we didn't buy this stock in 1999 is a dumb wonder. I take full responsibility. David said, smiling, certain, "Millennium." The split-adjusted price at the time: Single digits. Now it's $28.

Millennium was only $23 when I started this column. It had a good week last week. The company is a marvel for a biotech upstart. It's only eight years old, yet it has $2 billion in guaranteed alliance revenue for drug target discovery. It'll top $200 million in revenue this year, and its first drug isn't even really selling yet, though it was approved in May.

Millennium spent $94 million on research and development last quarter, yet its $1.5 billion in cash and equivalents didn't decline. It is earning enough revenue and interest to offset its costs. This is an essentially product-less biotech company that isn't burning cash, qualifying it for the Eighth Wonder of the World.

Millennium has six drugs in clinical trials and aims to have twelve in trials by year-end, giving it a robust pipeline. One drug in two separate Phase 2 trials, LDP-341, an anti-cancer agent, is a potential blockbuster ($1 billion in annual sales).

We wrote about Millennium in Drip Port last week, and we've mentioned it here several times (it was part of "Break Down August" last year). We believe that Human Genome Sciences (Nasdaq: HGSI) offers more Rule Breaking qualities, yet we keep returning to Millennium. As long as we see biotech as one of the most important, emerging technologies of our time, Millennium will be catching our eye. Will we ever wed it? I'm going to put some Millennium in a Roth IRA for thirty-five years, despite Brian's bad luck with Breakers in his IRA.

Mercury Interactive (Nasdaq: MERQ)
The Web is dead. Long live the Web!

Mercury Interactive is a profitable software firm that has grown sales of its website monitoring software even during the implosion (and some idiotically proclaim "end") of everything Internet. Part of Mercury's secret is having a diverse customer base of more than 10,000 clients. It sells software to most of the Fortune 500 companies, and it sells about 20% of its software over the phone, lowering sales and marketing costs.

With approximately 50% market share, Mercury is the top dog in website monitoring and testing software. This is an important, emerging industry, even if bruised.

The company's software works across a client's network -- as shown in this nifty diagram -- to make sure that everything works internally and externally. As more and more business is conducted over the Internet (believe it or not), it is important that companies have robust websites that fulfill demands.

Mercury's software, in part, performs tests to assure that sites will perform under pressure, and then the software monitors performance. The company also sells software aiding in application management and other system requirements. Mercury's sustainable advantage is partly one of convenience: Once a company adopts Mercury's software, switching to a competitor can present a hassle.

Mercury's annual revenue the past three years (in millions of dollars):

2000: $307.0, up 64% 
1999: $187.7, up 55% 
1998: $121.0, up 58%

Sales for the first half of 2001 were $186 million, up 43%. The stock was clobbered this summer, though -- losing 50% since early July -- partly because management warned that the current quarter will see growth of "only" about 27% to 32%, down from earlier guidance of 32% to 45%, due to a tough market environment. Naturally, this has investors worried that this is only the start of a slowdown, and it may be. But maybe not. It's still healthy year-over-year growth, and almost surely a slowdown won't be indefinite.

Recently at $30, the stock has declined to a $2.5 billion market cap, giving the company a fairly modest $1.85 billion enterprise value when you subtract its $660 million in cash and investments. Free cash flow has been $43.2 million the first half of this year, putting the enterprise value to estimated free cash flow for 2001 at about an 18.5 multiple. Not bad at all. On an earnings per share basis, the stock trades at 39 times this year's estimate, and at about 30 times next year's guess. Earnings are estimated (hoped) to grow at 30% or more.

Last week, Brian celebrated that Checkpoint Software was a profitable potential Rule Breaker with a reasonable valuation. Mercury may be another. Do we want to own the leading website testing software company? Is it an important enough industry? Will it change the world? It won't change the world, but it may be a good investment if a person can stomach the risk and uncertainty. This is still a small company in a young field.

Jeff Fischer owns some shares of Coca-Cola in a Drip, though he doesn't drink the stuff. What a contradiction. How can anyone take him seriously? The Fool has a progressive disclosure policy.