Red Hot Index Poll: You Speak, We Listen

What a miserable day for the Red Hots! Ouch. We are right on the griddle with this one, aren't we? Our proprietary list of 18 incredibly hot companies is down 4.3% today.

No matter, you have spoken. Hundreds of you have asked that we add some names to the index. I have taken all of your choices and distilled them into two groups of four stocks each -- one group of prospective Red Hot members with market caps over $2 billion, the other with market caps under $2 billion. Scan the groups and vote for your favorite in each.

Thanks to Matt Jacobs for putting together these little bios. I think they are quite fair. Cramer Berkowitz owns none of these potential Red Hots. To which I say, what were we thinking? These stocks are in orbit!

Quantifying the Qualifiers

Below are brief descriptions of the eight companies vying for the two spots available in the Red Hot index.

Applied Micro Circuits (AMCC)

Applied Micro Circuits is a play on the explosive semiconductor communications area. It focuses on SONET/SDH, ATM, gigabit Ethernet, fibre channel and automated test equipment markets. The company has begun to deploy Silicon Germanium with IBM (IBM) and is actively sampling products in OC-48 and OC-192. Nortel (NT) contributes 25% of its sales, while many OEMs are considering Applied Micro for future optical products.

BroadVision (BVSN)

BroadVision is a play on the Internet applications software platform market. Its products deploy commerce-oriented Web applications to better customer relationships. Recent partnerships, customer wins and market share gains have helped the stock surge. BroadVision competes with Vignette (VIGN) in this space, but a longer-term threat remains with Microsoft (MSFT), IBM and Netscape getting more involved in this space.

Ditech Communications (DITC)

Ditech is the smallest of all the potential companies. It's a leading vendor for echo cancellation technology, which eliminates the voice echo that occurs frequently in the newer packet networks. Ditech also plays in the optical equipment space with a group of products that enhances the installed base of DWDM equipment. The company competes with Lucent (LU) and Tellabs (TLAB) in the echo business and a host of optical companies (Lucent, Ciena (CIEN), Nortel, etc.) in the DWDM business.

Emulex (EMLX)

Emulex is another play on the growing opportunity in fibre channel, offering a mix of high- to low-end host bus adapters, which are board level products embedded into computers connecting to a fibre-channel network. QLogic (QLGC) and Hewlett-Packard (HP) are the company's main competitors in this segment.

E-Tek Dynamics (ETEK)

E-Tek competes with JDS Uniphase (JDSU) on the passive side (like the old JDS). E-Tek is experiencing explosive demand in isolators and integrated modules. It also got an extra pop in the stock after the Cisco (CSCO)-Cerent deal stressed the importance of the optical world.

F5 Networks (FFIV)

F5 is a leader in traffic management, monitoring and managing servers to direct Internet traffic to the most ideal server. F5 is a play on the growing e-commerce market and is focused entirely on businesses leveraging the Internet. F5's solution leads to higher system availability and increases performance.

Harmonic (HLIT)

Harmonic is a leading supplier of fiber-optic systems that increase bandwidth while enhancing quality. The company sells to leading cable companies, and AT&T (T) is expected to contribute 40% of the company's total revenues. As cable companies build out more complex networks, including telephony and high-speed access, the demand for Harmonic's infrastructure should increase.

Internet Capital Group (ICGE)

Internet Capital Group has surged since its IPO less than a month ago, with a market cap now larger than CMGI's (CMGI). ICG is a holding company with 36 positions, most of which are focused in the business-to-business e-commerce space. Business-to-business companies are not widespread yet, and many believe this is the next big wave, as the market potential for business-to-business commerce is seen as being much larger than the business-to-consumer segment.

-- List compiled by Matt Jacobs

The Big Dance

The polls closed at just after 3 p.m. EDT on Thursday, Sept. 2. The final results are below.

Heat 1: Market Capitalization Over $2 Billion (Choose One)

Responses: 2561 Last updated: Thu Sep 02, 3:16 PM EDT Applied Micro Circuits 23% BroadVision 27% E-Tek Dynamics 11% Internet Capital Group 38%

Heat 2: Market Capitalization Under $2 Billion (Choose One)

Responses: 2508 Last updated: Thu Sep 02, 3:21 PM EDT Ditech Communications 20% Emulex 15% F5 Networks 28% Harmonic 37%

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