The longterm cmgi chart has been my computer screen wallpaper since 2004.
It was one of the top darlings during the internet bubble and bust.
Its been a hot one lately.
Is that the stock you went all-in with for the cnbc contest? If so, no wonder you are in top 1000 players. It has recently nearly doubled.
It was one of the top darlings during the internet bubble and bust.
Its been a hot one lately.
Is that the stock you went all-in with for the cnbc contest? If so, no wonder you are in top 1000 players. It has recently nearly doubled.
you are very observant Woof. And yes I did. got 600K some shares at 1.60 and bought 100 shares of merrill at 81.
CMGI and particularily @ventures are investing in alternate source energy companies which could play huge in the next 20 years.
good luck if you play it..
and good catch:drink:
CMGI and particularily @ventures are investing in alternate source energy companies which could play huge in the next 20 years.
good luck if you play it..
and good catch:drink:
Article In Barrons Saturday on Cmgi...........
<TABLE cellSpacing=0 cellPadding=5 width="100%" border=0><TBODY><TR><TD width="100%" colSpan=3><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD class=graytimes18 vAlign=center align=left background=/barrons-media/dotTile4xtall.gif colSpan=3><TABLE cellSpacing=0 cellPadding=0 align=left background=/img/w.gif border=0><TBODY><TR><TD class=graytimes18 align=left>TECHNOLOGY TRADER </TD></TR></TBODY></TABLE></TD></TR><TR><TD height=10>
</TD></TR></TBODY></TABLE></TD></TR><TR><TD width="100%" colSpan=3><!-- ID: SB117469246719547431.djm --><!-- LEVEL: normal --><!-- TYPE: Technology Trader --><!-- DISPLAY-NAME: Technology Trader --><!-- PUBLICATION: "Barron's Online" --><!-- DATE: 2007-03-26 00:01 --><!-- COPY: Dow Jones & Company, Inc. --><!-- ORIG-ID: --><!-- article start -->CMGI, a Dot-Com Flameout, Reignites<DATEANDTIMESTAMPWITHBR />
By TIERNAN RAY<DATEANDTIMESTAMPWITHBR />
IT'S HARD TO THINK OF A MORE DELICIOUS EXAMPLE of 1990s dot-com excess than CMGI, which rose from mailing-list vendor to Internet "incubator," amassing stakes in a slew of tech darlings, including Lycos and Geocities.
Then came the crash, and CMGI (ticker: CMGI) plunged from a presplit high of $327.50 in January 2000 to 28 cents a share by 2002.
But recently some of the savviest hedge funds, including Renaissance Technologies, have been buying CMGI stock as the company morphs again. Today, CMGI gets paid a fee to streamline the delivery of electronics for companies such as Hewlett-Packard (HPQ) and Eastman Kodak (EK).
After a year of little or no attention paid to the company on Wall Street, Robert Stimson, business-software analyst for W.R. Hambrecht, initiated coverage of CMGI on March 9 with a Buy rating, saying the current value of CMGI's assets is $2.50 a share, a healthy cut above the stock's recent price of $2.22.
"Where there has been enormous opportunity in tech is with some of these fallen angels," says Stimson.
<HR noShade SIZE=1><HR noShade SIZE=1>But after a 66% jump this year in CMGI shares, is there any upside left? We think so. CMGI may be a cheap bet that there's value in the electronics supply chain. With $1 billion in sales over the past 12 months, $275 million of cash and $2 billion of net operating tax-loss carry-forwards, the company may even be an attractive take-out target for freight giants such as FedEx (FDX) or United Parcel Service (UPS).
"As [CMGI] improves its gross profit and operating profit, this is a business whose sales can rise by 20% or more a year," says Stimson.
After the dot-com crash, CMGI spent 2001 to 2004 transforming itself into a seller of corporate printing and shipping. In 2004, it paid $231 million to buy Modus Media, a firm that was in electronics distribution.
Chief Executive Joe Lawler, who arrived in late summer of 2004 from printing giant R.R. Donnelley & Sons, now has the company earning fees for what's called the "configuration" of electronics products. For example, when a cable modem has to be shipped from Asia to a customer in the U.S., CMGI will take delivery of the modem from the manufacturer, bundle it with things like adapters for the U.S. power supply, and put it all in a box.
"It's not even the same company as it was in the '90s, not even close," says Ryan Jacob, manager of the Jacob Internet Fund, which owned CMGI shares during the dot-com boom.
The new business has razor-thin margins: CMGI makes 10 cents on the dollar for moving a billion dollars worth of goods around the world. But there are signs Lawler is boosting efficiency. Gross profit after the cost of goods, which has bounced between 8% and 11% in the past couple of years, was 12.5% in the most recent quarter.
"The whole supply-chain area is a worthwhile place to be dealing these days," adds Michael Shinnick, who helps manage $3 billion for 1st Source in South Bend, Ind., and doesn't own CMGI shares.
<TABLE class=imglftbdy cellSpacing=0 cellPadding=0 width=380 align=left border=0><TBODY><TR><TD>
</TD></TR><TR><TD class=medcptnocrd>Nasdaq Ascendant: A 5% uptick in crude oil didn't slow the Nasdaq, which had its best week since August 2006 following a reassuring economic assessment from the Fed.</TD></TR></TBODY></TABLE>CMGI seems to be in a hot market as more electronics goods are designed, built and tested in Asia and shipped around the world. But building a business with stable margins and steady cash flow is no slam dunk. Results quarter to quarter have been uneven. Last year, the company lost $70 million in business from Kodak and $100 million from HP, as both found other ways to ship and configure products. The companies are still clients, though they represent a smaller percentage of total sales.
Hence, sales are expected to decline slightly in the fiscal year ending July 2008, while profit may slip to 11 cents a share from 13 cents this year.
What's more, CMGI still invests in young companies, which nowadays consist of alternative-energy start-ups. And proceeds from selling companies in its portfolio continue to be a big contributor to cash flow from quarter to quarter.
Former CEO David Wetherell, the deal maestro during the '90s, gave up his chairmanship last year but is sticking around as a consultant on venture investments.
All that gives Jacob and other investors pause.
"The cash and low valuation make CMGI a potential value stock, but I want to know whether this a business that can improve margins and really grow earnings," says Jacob.
CEO Lawler tells Barron's Online he can achieve annual gross profit of 12% to 14% of sales in coming years by eliminating waste in variable costs. He says consolidating numerous software programs will help CMGI better plan the leases on its facilities and its labor costs around the world.
And Lawler believes CMGI can replace lost business at HP and Kodak with contracts for higher-value electronics such as communications equipment. CMGI's 41 locations in 13 countries outnumber competitors' facilities, which should be attractive to clients.
Lawler won't say who those new clients may be, but according to one source who declined to be identified, they could include storage-equipment vendor EMC.
As a sign of progress, Lawler says that aside from the HP and Kodak accounts, sales have grown around 8% in the past 12 months, in contrast to the 1% decline reflected on the latest income statement.
And the venture portfolio? "We see compelling valuations in clean tech," says Lawler, which makes it worth using the company's in-house investing expertise, he says.
CMGI's cash may offer some cushion for the stock while Lawler pursues his plan. "The presence of cash and of net loss carry-forwards adds some support to that kind of a story," says Alan Loewenstein, senior vice president with American Fund Advisors, which doesn't own CMGI shares.
After the stock's recent run, there's more risk than there was at a dollar a share that Renaissance and other hedge funds will cash in their chips. But the strength of that balance sheet means investors may be rewarded if they give Lawler time to show he can build substance at a company long known for dot-com pizzazz.
</TD></TR></TBODY></TABLE>
<TABLE cellSpacing=0 cellPadding=5 width="100%" border=0><TBODY><TR><TD width="100%" colSpan=3><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR><TD class=graytimes18 vAlign=center align=left background=/barrons-media/dotTile4xtall.gif colSpan=3><TABLE cellSpacing=0 cellPadding=0 align=left background=/img/w.gif border=0><TBODY><TR><TD class=graytimes18 align=left>TECHNOLOGY TRADER </TD></TR></TBODY></TABLE></TD></TR><TR><TD height=10>
By TIERNAN RAY<DATEANDTIMESTAMPWITHBR />
IT'S HARD TO THINK OF A MORE DELICIOUS EXAMPLE of 1990s dot-com excess than CMGI, which rose from mailing-list vendor to Internet "incubator," amassing stakes in a slew of tech darlings, including Lycos and Geocities.
Then came the crash, and CMGI (ticker: CMGI) plunged from a presplit high of $327.50 in January 2000 to 28 cents a share by 2002.
But recently some of the savviest hedge funds, including Renaissance Technologies, have been buying CMGI stock as the company morphs again. Today, CMGI gets paid a fee to streamline the delivery of electronics for companies such as Hewlett-Packard (HPQ) and Eastman Kodak (EK).
After a year of little or no attention paid to the company on Wall Street, Robert Stimson, business-software analyst for W.R. Hambrecht, initiated coverage of CMGI on March 9 with a Buy rating, saying the current value of CMGI's assets is $2.50 a share, a healthy cut above the stock's recent price of $2.22.
"Where there has been enormous opportunity in tech is with some of these fallen angels," says Stimson.
<HR noShade SIZE=1><HR noShade SIZE=1>But after a 66% jump this year in CMGI shares, is there any upside left? We think so. CMGI may be a cheap bet that there's value in the electronics supply chain. With $1 billion in sales over the past 12 months, $275 million of cash and $2 billion of net operating tax-loss carry-forwards, the company may even be an attractive take-out target for freight giants such as FedEx (FDX) or United Parcel Service (UPS).
"As [CMGI] improves its gross profit and operating profit, this is a business whose sales can rise by 20% or more a year," says Stimson.
After the dot-com crash, CMGI spent 2001 to 2004 transforming itself into a seller of corporate printing and shipping. In 2004, it paid $231 million to buy Modus Media, a firm that was in electronics distribution.
Chief Executive Joe Lawler, who arrived in late summer of 2004 from printing giant R.R. Donnelley & Sons, now has the company earning fees for what's called the "configuration" of electronics products. For example, when a cable modem has to be shipped from Asia to a customer in the U.S., CMGI will take delivery of the modem from the manufacturer, bundle it with things like adapters for the U.S. power supply, and put it all in a box.
"It's not even the same company as it was in the '90s, not even close," says Ryan Jacob, manager of the Jacob Internet Fund, which owned CMGI shares during the dot-com boom.
The new business has razor-thin margins: CMGI makes 10 cents on the dollar for moving a billion dollars worth of goods around the world. But there are signs Lawler is boosting efficiency. Gross profit after the cost of goods, which has bounced between 8% and 11% in the past couple of years, was 12.5% in the most recent quarter.
"The whole supply-chain area is a worthwhile place to be dealing these days," adds Michael Shinnick, who helps manage $3 billion for 1st Source in South Bend, Ind., and doesn't own CMGI shares.
<TABLE class=imglftbdy cellSpacing=0 cellPadding=0 width=380 align=left border=0><TBODY><TR><TD>
Hence, sales are expected to decline slightly in the fiscal year ending July 2008, while profit may slip to 11 cents a share from 13 cents this year.
What's more, CMGI still invests in young companies, which nowadays consist of alternative-energy start-ups. And proceeds from selling companies in its portfolio continue to be a big contributor to cash flow from quarter to quarter.
Former CEO David Wetherell, the deal maestro during the '90s, gave up his chairmanship last year but is sticking around as a consultant on venture investments.
All that gives Jacob and other investors pause.
"The cash and low valuation make CMGI a potential value stock, but I want to know whether this a business that can improve margins and really grow earnings," says Jacob.
CEO Lawler tells Barron's Online he can achieve annual gross profit of 12% to 14% of sales in coming years by eliminating waste in variable costs. He says consolidating numerous software programs will help CMGI better plan the leases on its facilities and its labor costs around the world.
And Lawler believes CMGI can replace lost business at HP and Kodak with contracts for higher-value electronics such as communications equipment. CMGI's 41 locations in 13 countries outnumber competitors' facilities, which should be attractive to clients.
Lawler won't say who those new clients may be, but according to one source who declined to be identified, they could include storage-equipment vendor EMC.
As a sign of progress, Lawler says that aside from the HP and Kodak accounts, sales have grown around 8% in the past 12 months, in contrast to the 1% decline reflected on the latest income statement.
And the venture portfolio? "We see compelling valuations in clean tech," says Lawler, which makes it worth using the company's in-house investing expertise, he says.
CMGI's cash may offer some cushion for the stock while Lawler pursues his plan. "The presence of cash and of net loss carry-forwards adds some support to that kind of a story," says Alan Loewenstein, senior vice president with American Fund Advisors, which doesn't own CMGI shares.
After the stock's recent run, there's more risk than there was at a dollar a share that Renaissance and other hedge funds will cash in their chips. But the strength of that balance sheet means investors may be rewarded if they give Lawler time to show he can build substance at a company long known for dot-com pizzazz.
</TD></TR></TBODY></TABLE>
there might be a slight pull back but this stock has finally made the turn (god I hope). I held this stock for 3 years and was in the red for almost the entire time! Patience and some cost averaging turned out to work this time but that is not always the case. I would never tell anyone what to do with their hard earned money. Playing the market is gambling as well. Good luck with whatever you do. GO CMGI. Put it this way in 2004 I had $1500 sitting in an Ameritrade account. I bought all I could of CMGI at $2.42. Just today I finally am in the black. My other position I have 20K shares at 1.85 FYI
Woof after today I dropped to 1013rd. 1.55MM
Woof after today I dropped to 1013rd. 1.55MM
you are absolutely correct. It was one of the biggest of the dot bombs and a poster child for that time period. They withstood the bad times focused on their core business, continued to invest in other companies and are finally getting some coverage. If they have another good-outperform quarter I think the stock may reach mid 3'ish. They shed alot of revenue which was bad margin business. The revenue may go down a touch but their margins should be better. Can't overlook 28MM in debt and 280MM in cash!
..
..true story; back in internet extreme irrational exhuberence time about 1999; i was watching cnbc in morning; saw cmgi taking off with good volume ; i did not follow the stock; but just bought ten close out-of money call options; went to work; came home for lunch; sold 'em at 1:00 pm for a 7k profit; it was expected to have ez profits like that back then; now..>>
if i'd a only shorted cisco in 2000..
lol
gl:drink:
..true story; back in internet extreme irrational exhuberence time about 1999; i was watching cnbc in morning; saw cmgi taking off with good volume ; i did not follow the stock; but just bought ten close out-of money call options; went to work; came home for lunch; sold 'em at 1:00 pm for a 7k profit; it was expected to have ez profits like that back then; now..>>
if i'd a only shorted cisco in 2000..
lol
gl:drink:
