Wind River Systems, Wit Capital, Luby's, Advantage Learning Systems

Threatened competition has knocked down Wind River Systems, while Wit Capital files for its own IPO.
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A selection of some of the most intriguing stock newsletter suggestions 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.

Wind River Systems

Online Investor

(3/23)

Embedded computer systems are showing up in more and more "smart" appliances, from telephones to clothes dryers.

Wind River Systems

(WIND)

is the No. 2 supplier of software that runs these embedded systems with a 22% share of the market. This is a market that is expected to grow at a rate of 50% a year, says

Online Investor

. At first, the manufacturers of these smart appliances developed their own software. But as the sophistication of the chips and the processes grew, the software became difficult to create in-house. Enter Wind River with an off-the-shelf solution that could be easily customized to the manufacturers' needs. Wind River's products work with Unix or Windows systems and are easily integrated into a company's existing systems.

Microsoft

(MSFT) - Get Report

and

Sun Microsystems

(SUNW) - Get Report

have entered the embedded software market, and the competitive threat seems to have depressed Wind River's stock price. Despite solid fourth-quarter earnings, Wind River trades at just 26 times this year's earnings and 20 times next year's. That's just half the average price-earnings ratio for the software industry, says

Online Investor

.

More information can be found at:

fnews.yahoo.com

Wit Capital

Chris Nerney

(3/22)

After participating in 41 initial public offerings since September 1997,

Wit Capital

has filed for its own. The online brokerage and investment firm is a "seminal player, a pioneer in offering online IPOs to regular folks," says

Internetnews.Com

analyst Chris Nerney.

Destined to trade under the symbol WITC on Nasdaq, Wit Capital plans to raise $80 million from the stock offering. Wit has made its reputation by including regular people in IPOs via its Web site. Wit promises that its IPO shares will be allocated on a "first come, first served" basis, though there has been "grumbling" from some Internet discussion boards that it favors big players and its own employees, says Nerney. But most investors just care about how the stock will perform, says Nerney, and Wit has several things in its favor: a recognized name in the investment community and some recently hired Wall Street heavyweights as chief executive officer and director of research.

Still, Wit lost $8.8 million last year on revenue of $2 million. It has accumulated debt of $13.6 million. In addition, bigger players, including

Charles Schwab

(SCH)

,

Fidelity

and

E*Trade

(EGRP)

, have gotten in on the act of offering IPO shares to the little guy, cautions Nerney.

More information can be found at:

www.internetnews.com

Luby's

Paul Ciampoli

(3/22)

Top executives of cafeteria-style restaurant chain

Luby's

(LUB) - Get Report

are buying shares in their company, offering "compelling evidence that bulls are walking the hallways of Luby's executive suites," says Paul Ciampoli of

Federal Filings

.

Seven Luby's execs purchased a combined 47,035 shares between mid-January and early February. Part of the purchasing was done via a program of bank loans, allowing officers to borrow up to half their base salaries to buy shares. Participants are then rewarded with options to buy more shares. The buying is significant, he says, because it "represents significant expansion of insiders' stock ownership," he says.

At the current price of around 16, at least part of the recent insider buying may be due to the opinion that the company could well again reach its 52-week high of 19 1/ 2. The company trades at around 11 times 1999 earnings, says Ciampoli, and has a healthy dividend yield of 5.8%.

More information can be found at:

www.tfc.com

Advantage Learning Systems

Jim Collins

(3/22)

Growth stock adviser Jim Collins sees a lot of advantages to owning the maker of popular reading software Accelerated Reader.

Advantage Learning Systems

(ALSI)

counts 41,500 schools in the U.S. and Canada among its customers.

The Accelerated Reader program supports learning to read by quizzing children on the computer with multiple-choice tests on the 13,000 book titles usually read in the various grades. In addition, teachers and administrators have access to more than 20 reports on a student's progress. The latest version of the program is slated for delivery for the 1999-2000 school year. Already in the process of being shipped is a new product, Perfect Copy, a writing software program.

Fourth-quarter profit of 27 cents a share was a nice increase over the 11-cent-per-share performance of a year ago, and it was 4 cents ahead of analysts' estimates, says Collins. Revenues were up 78% over the year-ago period. The company also carries $33 million in cash and is debt free.

More information can be found at:

www.investools.com

Editor's note: With today's column, Sunday's Little Letters comes to an end. We hope you continue to enjoy our extensive weekend coverage.