Shares in eight internet companies jumped Wednesday following a report from an analyst at Merrill Lynch & Co that said the firms would benefit from a seasonal surge in business in the coming months. Amazon.com Inc, Yahoo! Inc and six other companies were cited by analyst Henry Blodget as attractive near-term opportunities for investors as the holiday shopping season approaches.
Blodget introduced the 1999 Merrill Lynch Holiday Basket, a group of eight business-to-consumer internet stocks that he believes offer a sound way to play the fundamental strength and renewed investor enthusiasm we expect to see during the fall and holiday shopping season. Blodget said in the report that the stocks in the basket could be trading as much as 50% to 100% higher by the end of the year.
Aside from Amazon and Yahoo, both of which were upgraded by Blodget from accumulate to buy, the companies included in the sweeping recommendation were America Online, barnesandnoble.com, eToys, Excite@Home, Inktomi and Lycos. All of the companies were cited for their strength in three key drivers; traffic, advertising and commerce. Blodget reckons that revenue from online purchases and advertising could rise 100% to 200% from last year’s holiday season and feels these hand-picked firms will be able to reap a great deal of the associated rewards.
In the wake of the report, Amazon rose $3.875 to $113.125, while Yahoo gained $6.188 to close at $145.063 and AOL added $1.688 to finish at $99.188. Meanwhile, eToys rose $4.938 to $45.188, Inktomi added $3 to $119, Lycos climbed $2.438 to $44.75, barnesandnoble.com rose $2.50 to $19.25 and Excite@Home inched up $0.4375 to $40.063. Shares in some other internet companies that Blodget didn’t recommend were buoyed by the general wave, such as eBay Inc, which rose $8.188 on the day to close at $125.938. รก
