FOOL PLATE SPECIAL

Radio Free Internet

Navarre <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: NAVR)") else Response.Write("(NASDAQ: NAVR)") end if %> has received quite a bit of attention in the past few days, pushing ahead another $2 1/2 to $20 this morning as the news of its 50% investment in Net.Radio Network is absorbed. Net.Radio is a privately-held company best known for its Net Companion browser that allows the user to look around the Internet for music, news and information. Net.Radio is also involved in the emerging business of shooting radio over the Internet instead of the airwaves, although this can only be described as nascent at best.

This recent run is not the first time that Navarre has come to the market's attention, however. The Minneapolis-based company supplies and distributes music, CD-ROMs and "enhanced audio CDs". On April 29th, Dan Dorfman reported that Metromedia's International Group might come hunting for Navarre after its attempt to shore up its music distribution business by buying Alliance Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CDS)") else Response.Write("(NYSE: CDS)") end if %> was scrapped. Navarre has actually done well on the music distribution side in the last year despite an overall soft music market.

Insiders, who own 62% of the stock, are sitting pretty -- with shares at $6 or $7 two months ago, they have tripled their money in only a few weeks. The irony of all this is that the really interesting part of the company's business -- the part that has seen revenues increase 28% and earnings shoot up to $0.10 EPS from $0.02 EPS last quarter-- is being completely overlooked in the Internet frenzy. This often-ignored part is its music and CD distribution business. The company is in turnaround mode after a pretty rough 1996 and remains "cautiously optimistic" that its improving growth trends will carry into next year. At 25 times earnings, it looks pretty richly-valued in the short term.

UPGRADES & DOWNGRADES

Compuware <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: CPWR)") else Response.Write("(NASDAQ: CPWR)") end if %> was upgraded from "hold" to "buy" by Hambrecht & Quist today, causing the computer peripherals manufacturer to surge $5 3/4 to $36 1/4.

Employee Solutions <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ESOL)") else Response.Write("(NASDAQ: ESOL)") end if %> continued its erratic moves, pumped up $2 1/2 to $30 7/8 today after Merrill Lynch upped its "intermediate term" rating to "buy" from "accumulate" and kept its "long term" rating at "buy".

Medicis Pharmaceutcial <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: MDRX)") else Response.Write("(NASDAQ: MDRX)") end if %> continued its torrid rise, up another $1 1/2 to $34 1/2 today after the Midwest-based Red Chip Review reportedly rated the company their "top pick".

Heartport <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: HPRT)") else Response.Write("(NASDAQ: HPRT)") end if %> jumped $2 1/4 to $41 3/4 after Alex Brown rated the company an "initial buy" today.

EARNINGS SURPRISES

Stewart & Stevenson <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SSSS)") else Response.Write("(NASDAQ: SSSS)") end if %> dropped $3 7/8 to $23 7/8 after reporting earnings of $0.20 EPS -- quite a bit below the consensus estimates of $0.41 EPS for the industrial concern.

ODDS & ENDS

Reading & Bates <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: RB)") else Response.Write("(NYSE: RB)") end if %> rose $3/4 to $23 3/8, possibly on news that it had won a near-$60 million contract from the Norwegian state oil company, Statoil, for use of one of its submersible oil-drilling rigs.

Republic Industries spin-off Republic Environmental Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: RESI)") else Response.Write("(NASDAQ: RESI)") end if %> continued to surge $13 5/8 to $23 5/8 on news that the company had transferred majority ownership to another company and that Wayne Huizenga had invested over $5 million in the company.

PSC Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: PSCX)") else Response.Write("(NASDAQ: PSCX)") end if %> has committed to buying the Data Capture Group of Swedish-based Spectra-Physics AB for $140 million, which boosted the shares $1 31/64 to $11 5/8 after the company said this would increase annual revenues to $115 million from $87.5 million last year.

Syquest <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: SYQT)") else Response.Write("(NASDAQ: SYQT)") end if %> continued to surge in sympathy with Iomega today, up $2 1/32 to $11 17/32 on the mistaken notion that the EZ-135 is simply an unknown real competitor to the Zip drive and not just a dinky little hard drive platter in a plastic case.

Some two-for-one splits set the market on fire: Iomega <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: IOMG)") else Response.Write("(NASDAQ: IOMG)") end if %> is up $5 1/4 to $46 5/8, Orthologic (NASDAQ OLGC) is up $2 1/2 to $41 1/8 and Zoltek <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: ZOLT)") else Response.Write("(NASDAQ: ZOLT)") end if %> has risen $4 3/4 to $81 1/2.

Par Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PTC)") else Response.Write("(NYSE: PTC)") end if %> dropped $1 1/2 to $17 on news released last night that the company's chairman would sell 1.2 million shares in a 2.8 million share offering.

Randy Befumo (MF Templar), a Fool
Selena Maranjian (MF Selena), another Fool