Yi Ping Ho
E-commerce stocks were going strong this morning. Did anyone -- or is that everyone -- say the Internet is yesterday's lunch?
Lehman Brothers' Holly Becker doesn't think so. This morning, the well-known Internet proponent initiated coverage of CNet Networks (CNET Quote - Cramer on CNET - Stock Picks) with a buy rating and a price target of $13 a share. Becker said the company, like many of its online brethren, is being buffeted by a troubled online and general advertising market, as well as tech companies' woes. But she called San Francisco-based CNet "a category leader in a potentially very lucrative niche that encompasses both B2C and B2B opportunities." The upside? She said that "the good news is, we are hopeful that the worst is behind us in terms of price and estimates; valuation is relatively attractive and is underpinned by a potential sale of the company." CNet was recently up 9.7% to $10.25, well off its 52-week high of $58.44. "Despite the hundreds of publicly traded dot-coms, actually making money on the Internet has remained an elusive prospect for most, " Becker wrote in her report. "We view 2001 as a transition year, one in which CNET should take the opportunity to fully integrate its businesses and build a foundation for a strong future growth as it heads into 2002 and back into profitability." It wasn't alone among dot-coms. TheStreet.com Internet Sector Index, known as the DOT, was lately gaining 4.1%. And the e-commerce sector, tracked by TheStreet.com E-commerce Index, recently was rising 4.5%. Also giving fuel to the beaten-down sector was Amazon.com (AMZN Quote - Cramer on AMZN - Stock Picks). A report in The Wall Street Journal said the e-tailer's quest for partnerships with traditional and online merchants could lead to the company offloading responsibilities for some of its retailing businesses. Amazon has reportedly been in talks with Best Buy (BBY Quote - Cramer on BBY - Stock Picks) to form some kind of alliance, and recent press reports have said Amazon is looking at linking up with at least one other notable retail name. Amazon has been struggling under the weight of sluggish growth in its core business. In January, the company announced it was laying off 1,300 workers, or 15% of its staff. Amazon's chief executive, Jeff Bezos, said in January that the company -- which has lost money in each of the five years of its existence -- would turn a profit by year's end. Appearing on CNBC this morning, Bezos said he stands by that pledge, which promised that the company would achieve a pro forma operating profit by the end of 2001. Shares of Amazon were recently gaining 5.7% to $10.77. The e-finance sector was also on the upswing. TheStreet.com E-finance Index, which charts 15 companies engaged in online financial services, recently was climbing 7.4%. This sector, hit recently by an earnings warning from Charles Schwab (SCH Quote - Cramer on SCH - Stock Picks) has suffered from the flaccid market.
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