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Books-a-Million,, ECI Telecom, SangStat Medical

An Internet guide IPO and a biotech with an antibody agent are among this week's interesting picks.

A selection of some of the most intriguing stock newsletter suggestions on the Web. The items presented do not represent the views of

; rather, the collection is offered as a service to our members who may be scanning the Web for stock-related information.


Mark Veverka

(Jan. 5)

Internet stocks are hot, hot, hot right now. But you might not know it from looking at the selling activity of insiders at some of these companies, warns the

San Francisco Chronicle's

Mark Veverka. "A bevy of paper-millionaires" are "converting their stock certificates into greenbacks," he says. Specifically, since early October, more than 300 insiders at 24 Web-based companies sold millions of their shares.

Take, for example,



Chairman Charles Anderson, who was even willing to pay a penalty to sell 401,468 shares, says Veverka. Anderson paid $3 a share for 22,500 shares in October. The company launched an Internet book site in November, and the stock price peaked that month at 47. (It's now below 15.) But insiders can't take a profit from these shares until six months after they're bought. Profits must be given back to the company, which is what Anderson did with $767,040, "in order to dump his October shares sooner rather than later," points out Veverka, citing research from

CDA/Investnet Technologies

. "Does that mean Anderson believes that BAMM shares might be worth less than 3 bucks come March?"

Of course, there can be regulatory or tax reasons for insider selling. So the key is to notice big changes in trends in insider trading. There has been "a veritable explosion of insider selling at the Internet-related companies," CDA/Investnet's Bob Gabele tells Veverka. Previously, Internet insiders were conspicuous by their absence from lists of insider sellers. "But the tide began to turn at the beginning of October," says Veverka.

More information can be found at:

Steve Harmon

(Jan. 5)

The company

, which offers "guides" to the Internet on hundreds of topics, has filed to raise $50 million through an initial public offering. Internet stock analyst Steve Harmon sees some positives for this company, if it continues with intelligent growth., founded in 1996 by former


executive Scott Kurnit, "adds its own twist on helping people find useful stuff on the Web by having real people sift through the flotsam and jetsam of Web sites and offer links to some of those that its 'experts' like the most," says Harmon.

Media Metrix

says attracted 4.2 million unique monthly users in November, 26th overall among Web sites.'s sales for the first nine months of 1998 were $1.578 million, or $2.1 million at an annualized rate. If the mood of the market stays about the same, could be valued at 36 times forward sales, or $250 million, says Harmon. Another recent IPO, for


(INSP) - Get Free Report

, went from 15 to 33.25 in its Jan. 4 debut. Harmon points out, however, that Infospace "runs a leaner ship with better top- and bottom-line" performance in 1998.

More information can be found at:

ECI Telecom

Rich Moroney

(Jan. 5)

Rich Moroney of

Dow Theory Forecasts

foresees large-cap stocks remaining in favor for the near term, as growth is sustained by falling interest rates. But increasingly, he says, he sees "value among the midsize companies."

Among them is

ECI Telecom


, whose products aim to improve the transmission capacity of telecom infrastructure, but without the high prices of new satellite links or fiber optic cables. The company gets 40% of its revenues from digital circuit multiplication equipment and 27% from access network products.

ECI Telecom grew profits 31% in the first nine months of 1998, thanks to a 20% revenue gain. Big needs for bandwidth coupled with tight cost controls at the telecoms are the basis for a positive outlook for a money-saving company like ECI, says Moroney. The stock, "reasonably" valued at 14 times expected 1999 earnings, is a "top buy," he says.

More information can be found at:

SangStat Medical

Online Investor

(Jan. 6)

Though biotech companies sometimes offer only elusive promises of growth, some companies can put together the ingredients that are more likely to produce a profit.

SangStat Medical

(SANG) - Get Free Report

looks to be such a company, says

Online Investor

. A major drug approval from the

Food and Drug Administration

and the arrival of a business-based chief executive officer bode well for the company.

SangStat's shares jumped nearly five points this week on the announcement that the FDA had approved for marketing the drug Thymoglobulin, an antibody agent that helps in episodes of acute organ rejection after kidney transplants. Sales in the U.S., Europe and Canada (both already approved) could produce $40 million this year and up to $100 million by 2002. This is after revenues of just $4.5 million in 1997 and $7.5 million in the first nine months of 1998. This new drug follows a recent approval for SangCya, an immunosuppressive drug taken daily for life by most transplant patients to prevent rejection.

CEO Jean-Jacques Bienaime joined the company after a successful run at

Rhone Poulenc Rorer

. Wall Street "took comfort" in this move, says

Online Investor


Although long-term success depends on continued research success, SangStat's two new drugs show promise. "If the company can ramp up sales as quickly as analysts predict and break into profitability later this year," says the Online Investor, "this $27 stock may have a lot of upside to run."

More information can be found at: