After an early retreat, tech stocks resumed their recent rally as interest in the Internet sector continued to surge.
Brian Salerno, portfolio manager at the
NetNet fund, attributed much of the sector's resurgence to last week's proposed merger between
The merger stocks have rallied sharply this week: Yahoo!, which on Monday jumped 22%, was up another 6 7/8, or 3.1%, at 226 Tuesday. broadcast.com, which added 21% Monday, was up 7 3/16, or 4.6%, at 164 3/16.
"Anytime you get a takeover from a leading player of another leading player, you would imagine it would spark renewed interest," the manager explained. "There's just a good feeling about these stocks that keeps them going."
Salerno says he is not concerned about the upcoming earnings season, noting that expectations for many Net companies are so low that it is hard for them to miss. Yahoo!, for instance, will
report first-quarter earnings Wednesday.
Salerno said his fund is staying away from what it views as the lower-tier players and is not buying stock in online auction sites that either take inventory from other companies or sell products that aren't moving well. He doesn't include
in that category.
Salerno says investors who are concerned that the Net stocks are overvalued may have missed out on a big move.
"Realistically, that fear was here in January, 66% ago," he said, referring to the fund's year-to-date return. "The reality is none of us know when the sector is going to get weak. It's just going to happen."
hit a home run with a strong buy rating from
C.E. Unterberg Towbin
, which initiated coverage of the stock today.
Analyst Tara Long put a price target of 150 on the stock, which split April 5, saying DoubleClick is "emerging as the dominant player in the Internet advertising space." Momentum-building behind the company, she noted, "will propel DoubleClick's valuation to the levels of other Internet sector leaders like Amazon.com, Yahoo!, eBay,
." The price target, she said, is based on the average valuation of the industry leaders and its application to DoubleClick.
DoubleClick was up 20 5/16, or 21%, at 115 7/8.