Cambridge Technology Partners, Bell & Howell, Alta Vista, HotJobs.com

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.

Cambridge Technology Partners
Online Investor (1/26)

At its 1998 high, Cambridge Technology Partners (CATP) reached 58. But then uncertainty hit, a few less-than-stellar quarters followed and the stock plunged to 13 in October. Now the stock is back to 29. What happened? "In simple terms, many investors apparently saw a rare chance to buy a fast-growing tech stock at a reasonable valuation," says Online Investor.

Cambridge Technology, which develops and integrates enterprise-wide software applications, made a name for itself by introducing the concept of a set contract price. Businesses had grown tired of paying software consultants unlimited hourly wages to fix things. Cambridge's fixed-time, fixed-price contracts spread to other companies.

But then year 2000 concerns hit, causing clients to defer information technology projects. After the company's shares lost 75% of their value, bargain hunters took notice.

Cambridge Technology followers expect 40% earnings growth for 1998 and 29% for 1999. At 31, the company's price-to-earnings ratio is below its projected growth rate for the next few years. And Cambridge still does what it does very well. "Even if it only comes close to the 40% expected growth rate over the next five years, there would seem to be some room for a continued re-expansion in its earnings multiple," says Online Investor. But even at the current multiple, earnings growth should propel the stock nicely, it says.

More information can be found at: fnews.yahoo.com

Bell & Howell
William Schaff (1/25)

Not just your old movie projector and microfiche company anymore, Bell & Howell (BHW) has found a way to grow with the times by recasting itself into a software solutions provider, able to access or distribute information. All its different efforts may look far-flung at first glance, "but its theme of providing information to those who need it most makes good business sense," says William Schaff, chief investment officer for San Francsico's Bay Isle Financial.

A large portion of Bell & Howell's revenue (44%) comes from distributing information, particularly via mail-processing machines with software that allows users to customize marketing offers in monthly bills. Customers in Seattle might receive a Seattle Seahawks offer, for example, while someone in New York would see an offer regarding Broadway plays. With the development of bill-paying online, B&H sees big opportunities for its software in the future.

Among the other profit centers, Bell & Howell was particularly insightful in how to use the extensive collection of microfiche newspapers and periodicals it collected throughout its early years. A product called ProQuest offers 25,000 news sources and 5.5 billion images from years past to libraries and public schools. Plans for offering this service to students center around distributing ProQuest via the Internet.

Challenges for Bell & Howell center around how to price this deep resource in the face of free information already available on the Web. In addition, some international contracts for postal software services have been canceled. And the company has a high level of debt. But the company has room to cut expenses to increase cash flow. At around 38, Bell & Howell is trading at about fair value. "In a world where valuations are more and more difficult to justify," says Schaff, "Bell & Howell looks like a good investment."

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

AltaVista
Steve Harmon (1/26)

Search engine AltaVista soon will be spun off from Compaq (CPQ). Internet stock analyst Steve Harmon estimates the company's market value at the time of the initial public offering at $600 million to $650 million and up to $1.5 billion on a post-IPO basis.

Harmon bases his pre-IPO value on an estimate of $60 to $65 per unique user for the search engine. The post-IPO value recognizes a higher profile as an independent company and an unfolding perception of Alta Vista as an "Internet" company apart from its PC-era parents, Compaq and, earlier, Digital.

Harmon counts among AltaVista's competitors five search services. A lingering question, he says, is how many search services can advertisers support?

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

HotJobs.com
Richard L. Brandt (1/26)

In the lightning-fast world of the Internet, you've got to establish your brand, even if it's before you have a product, writes Upside Editor-in-Chief Richard Brandt. That often calls for big venture-capital bucks. But HotJobs.com, a site that posts "quality" ads for jobs, has none. So how will it get attention? It will spend half its 1998 revenue on one 30-second commercial during today's Super Bowl. "I like this strategy!" says Brandt.

HotJobs.com Chief Executive Richard Johnson is betting the store on this commercial in hopes that his bootstrapped operation can win the brand-recognition game. His competition is Monster Board, owned by job-recruiting giant TMP Worldwide (TMPW). It's not that HotJobs.com is a little voice in the woods. It carries listings for such companies as IBM (IBM), Oracle (ORCL), Microsoft (MSFT) and McDonald's (MCD). Revenue has grown from about $800,000 in 1997 to $4 million in 1998. Revenue for 1999 is expected to be about $20 million.

Like the 1984 Apple (AAPL) commercial, which was shown only once but talked about and rerun by the media for years, HotJobs.com's ad has a chance to throw a final-seconds winning touchdown, says Brandt. That the company is making such a large bet and using that as part of the draw for viewers' sympathy is the chutzpah part. "Johnson is learning to play the hype machine," says Brandt. "It worked on me, didn't it?"

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

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