Digital River, Technology Stocks, B.F. Goodrich

A selection of some of the most intriguing tech stock ideas on the Web. The items presented do not represent the views of TheStreet.com; rather, the collection is offered as a service to our members who may be scanning the Web for stock-related information.

Digital River
Steve Harmon (12/28)

Digital River (DRIV) might well have the right idea on how to distribute software over the Internet. "We've always liked Digital River's model of an affiliate network (as in Amazon.com (AMZN) or CDNow (CDNW))," says Internet-stock analyst Steve Harmon. Digital River provides electronic commerce solutions to companies that actually sell the software. Digital River powers the store and ends up with a percentage of the sale.

The current price of around 34 reflects a secondary offering on Dec. 10 of 3.45 million shares at 23 1/2 per share. The dilution slowed the stock's rise, but Harmon argues that the cash "could help propel Digital River into a next-generation online software supernetwork."

Competition could emerge from software developers selling their products directly to the Internet public. And shopping robots may someday become ubiquitous on the Web, making stores even more virtual than they already are and cutting current merchants out of the loop. Whether either situation will occur is anybody's guess.

More information can be found at: www.internetnews.com.

Technology Stocks
John Bollinger (12/25)

Analyst John Bollinger of Bollinger Capital Management makes his stock picks based on a market model he calls a "pyramid." This technique posits that opportunity arises when specific stocks are in sync with their overall sectors and industry groups.

One sector that does well under Bollinger's technical analysis criteria is the semiconductor industry. And one company that looks very good is Texas Instruments (TXN). After the stock experienced a recent run-up over five days, attaining a new high, it pulled back, found a support level and then moved higher. "That is about as perfect of a pattern as these stocks make!" says Bollinger. "We would expect Texas to make new highs here." Two other stocks he likes are Semtech (SMTC) and Micrel (MCRL).

Among Internet stocks, CNET (CNWK) especially followed the Bollinger patterns when it broke upward in early November, corrected itself and then found a support for further moves up just recently. "CNET looks very attractive to me," he says.

Among diversified technology stocks, Bollinger favors Tektronix (TEK), International Manufacturing Services (IMSX), Perkin-Elmer (PKN) and Rockwell International (ROK). In particular, Tektronix, in its run-up, shows the "very signature of a strong stock," says Bollinger.

More information can be found at: www.techstocks.com.

B.F. Goodrich
Online Investor (12/24)

B.F. Goodrich (GR) is a major manufacturer of aerospace equipment and specialty chemicals. It hasn't made a tire in more than 10 years. Despite a rough year that saw the stock lose nearly half its value before recovering to the current 35, Online Investor is optimistic about this "high-yielding, niche-serving company."

Despite the well-known problems of Boeing (BA), aerospace isn't doing badly and new jets are being ordered. Goodrich is a leading manufacturer of landing and safety systems and other equipment. Orders in 1998 are expected to surpass the previous year's. Replacement parts and maintenance are two other aerospace categories in which Goodrich expects to profit in 1998.

Goodrich's $1.10 dividend is strong, and its price-to-earnings ratio is around just nine times 1999 earnings, which looks attractive, expecially when you take the yield into account.

More information can be found at: www.techstocks.com.

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