Scientific-Atlanta, Pilot Networking Services, Digital Rivers and Qualcomm
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.
Scientific-Atlanta
Online Investor
(8/11)
Scientific-Atlanta
(SFA)
is No. 2 in cable set-top box shipments, behind
General Instrument
(GIC)
, but several significant deals announced last week will make Scientific-Atlanta an early leader in digital set-top boxes, says
Online Investor
. Among the deals was one to supply digital boxes to
Tele-Communications Inc.
, which had been General Instrument's largest customer.
Cable set-top boxes are seen as the beachhead within the home for a variety of high-brandwidth consumer services. Though it will take several years for the cable companies to upgrade their infrastructures to provide these services, Scientific-Atlanta plans to double production of digital set-top boxes by October to 1 million units annually. This will give the company a good head start over consumer electronics brands like
Sony
(SNE) - Get Report
went public Tuesday with a less-than-impressive showing, hovering very close to its initial 14 offering price all week. Facing a daunting array of big-name competitors, Pilot's future looks cloudy, says
Herring.com
.
Pilot markets dynamic firewall capabilities to high-end customers, but faces competition from
Lucent
(LU)
,
CheckPoint
(CKP)
and others. "This kind of managed information services will be increasingly offered by the big players, analyst Paul Saunders of
Soundview Financial Group
tells Herring.com.
The company's prospectus warns that it will face declining gross margins in the years to come. Another discouraging sign: CEO Marketta Silvera sold 60,000 shares as part of the offering.
More information can be found at:
Digital River
Tom Taulli
(8/12)
Digital River
(DRIV) - Get Report
also went public Tuesday, closing just 16% above its 8.50 offering price on the first day. Tom Taulli, publisher of the
Taulli Report
stock market newsletter, calls the company "an interesting investment opportunity." On second look, investors apparently agree. The stock has since risen above 11.
Jupiter Communications
expects online software sales to increase to $2.3 billion in 2002 from $69 million in 1997, and Digital River provides the electronic software delivery, or ESD, systems to make that happen. It also makes data mining tools so retail software sites can determine which products are the most popular. Digital River has contracts with 1,122 software publishers and 346 online retailers.
There are many risks in the stock, Taulli points out, including a management team that has been on the job just a few months, intense competition and an extreme concentration of customers. Three companies account for 34% of sales. But, says Taulli, "Digital River is definitely a leader in providing companies with ESD products in a large and growing retail market for software."
More information can be found at:
Qualcomm
Pete Peterson
(8/10)
Qualcomm
(QCOM) - Get Report
is a leading supplier of cellular phones based on CDMA (Code Division Multiple Access) technology. Based on his belief that CDMA growth will continue to accelerate,
Volpe Brown Whelan & Co.
analyst Pete Peterson rates Qualcomm a "buy." "CDMA, in our opinion, is the most efficient digital technology of its kind today," he says.
The company's revenue last quarter was $60 million higher than his estimate, says Peterson, and sales of communications systems are growing 81% year over year. Qualcomm also has the highest growth rate among Volpe's "Big Fish Wireless Equipment" suppliers. He sets a 12-month target of 81 for the stock. It's currently trading at 59.
But Marc Cabi of
Credit Suisse/First Boston
rates the stock a "hold," arguing that an increasingly competitive market for cellular handsets will put pressure on Qualcomm.
More information can be found at:
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