David Nichols Recommends the Following Stocks: Sabre Holdings Corporation, F5 Networks, and Overture Services.

Business Editors

CHICAGO--(BUSINESS WIRE)--June 16, 2003

Internet stocks are in a rough and tumble business. But there are profits to be made, and David Nichols can toughen you up with three recommendations from this volatile industry, while getting you ready for a market correction. Learn about Sabre Holdings Corporation (NYSE:TSG), F5 Networks, Inc. (NASDAQ:FFIV), and Overture Services (NASDAQ:OVER). Click here for the full story exclusively on Zacks.com: http://featuredexpert2bw.zacks.com/

Here are the highlights from the Featured Expert column:

Just four or five years ago, companies still weren't sure how to best extract revenue from the Internet. Now that stable patterns of use have emerged, the smart and tough ones have figured out how to make a sustained buck. Despite the lunatic volatility of this sector, the following companies are worth considering, even as long-term holds. They've all figured out how to profit from the Internet, they don't have a lot of competition, they're either making profits or coming back from losses, and they're not wildly overpriced.

Sabre Holdings Corporation (NYSE:TSG) retails and distributes travel products and services and provides widely used technology solutions for the transportation and travel industries, including its category-killer proprietary computer reservation system. Sabre's Travelocity subsidiary continues to be the most popular travel service on the Web by far and is actually the sixth largest travel agency in the United States, operating or powering Web sites in five languages on four continents. Sabre's results for the first quarter were, as expected, hammered by the sharp decline in worldwide travel demand. The good news is the cash and equivalents of $927 million and the admirable free cash flow for the quarter of $72 million. In fact, Sabre declared a quarterly dividend of 7 cents a share based, it said, on its financial strength and long-term prospects.

F5 Networks, Inc. (NASDAQ:FFIV) provides products and services to manage and optimize Internet traffic. Its core products, the BIG-IP Controller, the BIG-IP Link Controller and the 3-DNS Controller, are uncommonly good at managing traffic to servers and network devices so customers get predictable and precise delivery of application traffic in an unpredictable environment. David wasn't surprised to discover that F5 posted the highest revenue growth of any vendor in its particular switch market for the first quarter, a 30% increase over the previous quarter and a 40% increase year-over-year. For the second quarter, F5 posted income of $815,000, or 3 cents a share, on revenue of $28 million, well up from the Q2 2002 net loss of $1.8 million or 7 cents a share on revenue of $27 million.

Overture Services (NASDAQ:OVER) is the second-largest player in Internet pay-for-performance search. It operates an online marketplace between the customers of its Web site partners and the Internet's best products and services. The worldwide number of paid introductions jumped from 587 million in the quarter last year to 608 million, due to increased search traffic from existing affiliates and the addition of new affiliates. The average price per paid introduction increased by about 50%, due to more competition among the growing advertising base, which increased from about 60,000 last March to 88,000 in March of this year. David would be remiss if he didn't mention that Overture has been mentioned as a buyout candidate for larger companies trying to fend off the threat from Google. The stock is down about 50% from January of this year, but has staged a sharp move up in the last few weeks.

Discover another Internet stock worthy of your attention, along with stop prices for all of these positions, and don't miss out on more of David Nichols' market commentary with many more stock suggestions by clicking: http://featuredexpert3bw.zacks.com/

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