… Companies like Internet Capital Group (Nasdaq: ICGE), Broadcom (Nasdaq: BRCM), CMGI (Nasdaq: CMGI), Sun Microsystems (Nasdaq: SUNW), and Nokia (NYSE: NOK) are classic investments and obvious long-term, core-portfolio holdings. But just try to buy 100-share lots of any of them and you'll soon find yourself in the cash-poor house. That_s where international markets may come in handy.
Although "international trading" carries more expectations than everyday possibility for investors, it could still present the next investment opportunity for online traders looking to stay one step ahead of the slow money. Given that the Nasdaq has already made aggressive moves to expand into
Europe, and more and more tech firms are trading on foreign markets, including the London Stock Exchange, the Neuermarkt in Germany, the Easdaq in Europe, the Nikkei in Japan, and the Australian or even New Zealand Stock Exchanges, who_s to say the next hidden gems won_t reveal themselves from across the pond or down under? In fact, given the pace of technology advancement abroad, that's where the investment growth curve may be the steepest.
Find a hot tech stock in the U.S. market that_s valued at less than a billion and you_d be a lucky shareholder indeed.
Purchasepro.com (Nasdaq: PPRO), a recent IPO in the business-to-business e-commerce space, tried its best to stay under the radar before it went public. The company used second-tier bankers and avoided media hype, yet it still caught fire, with shares soaring from the near-$30 first-day close to over $100 per share, taking the market cap from $300 million to $1 billion within a matter of weeks.
…Hot broadband network infrastructure plays, like Juniper Networks (Nasdaq: JNPR) and Sycamore Networks (Nasdaq: SCMR), skipped the low-value foreplay and jetted straight into the billion-dollar club with their IPOs. And existing Internet market leaders, be they Amazon.com (Nasdaq: AMZN), America Online (NYSE: AOL), or Yahoo (Nasdaq: YHOO), are so far out ahead of the valuation pack the likelihood of them ever being cheap, at least in price-per-share terms, are between slim and none.
Compare this domestic crop to interesting and growing companies like London_s New Media Spark (EPIC:NMS) and Fortunecity.com (NM: FCT); Telstra (ASX: TLS), the Australian telecom company that's slowly taking its assets public on the Australian Stock Exchange; or even the nascent and somewhat obscure IT Capital (ASX: ITP), a CMGI-like keiretsu based in Auckland, New Zealand, that trades on the New Zealand and Australian stock exchanges.
Online brokerage giants like Schwab or ETrade (Nasdaq: EGRP) are pushing hard into Europe, Asia, and Australia, but access to foreign markets is still spotty. The offline world can execute such trades, but that means paying the larger commissions of an offline trading account.
As Brian Rutberg, head of Internet banking for Warburg Dillon Read, says, "From an equity capital perspective things are going to become much more efficient for trading internationally, there_s no question about that. And when you look at the rest of the world, it's not only going to be much easier for international companies to list, but that much easier for them to gain access to capital."
This access to capital, access to trading liquidity, and access to international markets, says Mr. Rutberg, ultimately changes the culture so anyone can feel comfortable investing around the globe. In that sense, cheap stocks abroad will no longer be seen as a risk, but as an opportunity whose time is about to dawn.