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CheckFree (CKFR:NASDAQ)
If I had to name two stocks in the Cutting Edge portfolio that are "pure" New Economy stocks, CheckFree would top the list (with Optimal Robotics a close second). This is because CheckFree is changing the way money flows.
CheckFree is the leading provider of EBPP — electronic bill payment and presentment. With this new system, customers will soon be able to view and pay all their bills safely and electronically over the Internet. No more licking stamps or stuffing envelops. Paper-based financial transactions are about to become extinct.
E-Dominant
With over 850 financial institutions, 1,000 businesses, and 3 million customers using CheckFree's electronic payment and billing services, they are by far the dominant player in online payment transactions.
CheckFree has maintained its competitive edge by pure muscle power. They have simply bought out any competitor that has threatened the company. BlueGill and Transpoint both fell into that category. Such strong market power proves that CheckFree is determined to be the leader in online payment transactions.
The only negative for CheckFree is that e-bill payments have been inconsistent and slow to catch on. But I see that as an opportunity.
As CheckFree increases their e-bill contracts (they currently have 27, with projections of 120 by year's end), people will begin to realize the benefits and convenience of paying bills online.
Personally, I'd rather buy new economy stocks long before the Street realizes their true potential.
At these levels, CheckFree is a fundamentally cheap stock in a massive growth sector.
My 6-month price target is between US$60 and US$65 a share.
Rounding it Out
A short overture on remaining open positions:
Micros Systems (MCRS:NASDAQ) designs, manufactures, markets and services restaurant point-of-sale systems, hotel property management systems, and hotel central reservation systems.
Currently trading at US$17 a share (with a 52-week low of US$14), there is no reason to sell now.
Continue to Hold MCRS.
Taipan "Sell" Positions: A review of our recent Taipan sells
AVI Biopharma (AVII:NASDAQ)
AVII has two leading platforms, Cancer Immunotherapy and NEU-GENES, both of which are specifically aimed at solving the challenges faced by today's pharmaceutical products. SuperGen, their cancer drug, is set to continue on to Phase III of FDA clinical trials. Plus, they have two other drugs in Phase I and Phase II.
We originally bought AVII in Taipan for under US$3.50 a share. Today it trades for about US$8 a share — giving Taipan a nice gain of 128%.
In the last Taipan issue, we sold AVII and took profits.
Agritope (AGTO:NASDAQ)
Agritope was a speculative play on agricultural biotechnology. With all the hoopla surrounding the genome project, the "original" biotechnologists — farmers — were getting overlooked. We initiated a trade on AGTO for around US$4 a share.
We recently sold Agritope on the news they would be acquired by Exelixis (EXEL:NASDAQ) for as much as US$14 a share. This caused AGTO to jump 60% in one day.
I don't like waiting around to sell. Many things can happen — like the deal falling through. We bought AGTO at US$4 and sold it for US$11 a share. That's a gain of 175% since May 2000. I can live with that.
New Taipan Sells
Free up some capital — Sell these Taipan holdings
Along with the recent Taipan "sell" allocations, I would like to take some profits on current holdings, like Pharmaceutical Product Development (PPDI:NASDAQ).
We originally bought PPDI because they provide research, development, and consulting services in the life and discovery sciences segments. Their life sciences business is the fourth largest contract research organization in the world.
Our original entry price was US$22 a share. With PPDI currently trading at US$30 a share, I would like to take our 27% profit now. I think there are more attractive biotech plays. Sell PPDI at the market.
I would also like to sell Ballistic Recovery Systems (BRSI.OB:OTC). Of my many Taipan picks, this stock was the biggest loser. Oh, well. We've had plenty of winners.
I thought JFK Jr.'s plane crash would spur a nationwide rollout of increased safety measures on small aircraft.
It didn't happen. So, lets move on. Sell BRSI.OB at the market.
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