Inside Nasdaq: How the Top 100 Fared

Who’s to blame for the Nasdaq Stock Market’s woes?

Investors may debate forever the root cause of the market’s plunge in the last year, but technically speaking, the stocks listed in the chart at right have primarily determined Nasdaq’s fate.

Point a finger at Cisco Systems, Veritas Software, JDS Uniphase and WorldCom, in particular. But don’t blame Amgen, Comcast or Paychex.

The chart shows the stocks in the Nasdaq 100 index. That index tracks the 100 largest nonfinancial stocks listed on Nasdaq, as measured by market capitalization (stock price times number of shares outstanding).

The price moves in those 100 giants--which mostly are technology leaders--have the greatest effect on the direction of the Nasdaq composite index of all 4,100 Nasdaq-listed stocks.

Indeed, the current market capitalization of the Nasdaq 100 stocks is $1.97 trillion, while the market capitalization of the entire Nasdaq market is $3.18 trillion. So those top 100 stocks account for 62% of the market’s value.

Not surprising, then, the Nasdaq composite and the Nasdaq 100 indexes are down the same amount since March 10, when the composite index reached its all-time high of 5,048.62: Both indexes have fallen 58% since that date.

Within the Nasdaq 100 index, the performance of individual stocks has varied dramatically in the last year. Likewise, the stocks’ current valuations (that is, share prices relative to estimated 2001 earnings per share) are all over the map, which means bargain hunters may find some gems if they look carefully.

Here’s a closer look at the performance of some of the Nasdaq 100 stocks since the market overall peaked one year ago this week:

* The two biggest stocks in the Nasdaq 100--Microsoft (which now accounts for 8.2% of the index’s value) and Intel (5.6% of the index)--have held up better than the index itself, at least measured since March 10.

Microsoft, at $57.44 on Monday, is down 43% since March 10. The price fell as low as $40.25 near the end of last year but has rallied 32% since Dec. 31, as some investors appear to be betting the company will beat back the federal government’s attempt to dismantle the firm on antitrust charges.

Chip giant Intel is down 49% since March 10. But the losses in that stock are worse for investors who bought later in 2000. Intel reached its record high of more than $75 a share in late August, as Nasdaq staged a brief summer rally after its spring plunge. Intel has tumbled 60% from its August peak.

* The biggest losers in the Nasdaq 100 since March 10 include many of the tech and telecom stocks that investors had considered the premier companies in their sectors.

Telecom titan WorldCom, for example, has dropped 65% since March 10, to $16.13 on Monday, amid dwindling faith in its growth prospects. On average, analysts surveyed by IBES/Thomson Financial expect the company to earn $1.20 a share this year, then $1.08 in 2002.

The market’s expectation of lower earnings next year for WorldCom explain the stock’s seemingly low price-to-earnings ratio of 13 based on this year’s average estimate, analysts say.

Meanwhile, shares of Cisco Systems, once heralded as the leading company in Internet infrastructure equipment, are down 66% from a year ago to $23.08 on Monday. Even though the price has collapsed, however, the stock still is priced at 36 times the 64 cents a share Cisco is expected to earn in its fiscal year ending this July.

The average U.S. blue-chip stock, by contrast, is priced at about 21 times this year’s expected earnings.

* Among the Nasdaq 100 issues that still boast far-above-average P/E ratios despite deep declines in their share prices in the last year are Internet security firm VeriSign, with a P/E of 79 based on estimated earnings per share of 59 cents this year; Internet portal Yahoo, with an estimated P/E of 59; and wireless technology leader Qualcomm, with an estimated P/E of 50.

* At the other end of the spectrum, Nasdaq 100 stocks with relatively low P/Es based on estimated 2001 earnings include electronics contract manufacturing firm Sanmina, at 22; personal computer software firm Adobe Systems, at 21; and chip maker Microchip Technology, at 22.

But as in the case of WorldCom, low P/Es based on this year’s earnings can be a sign that Wall Street expects even weaker earnings in 2002.

* Nasdaq’s losses would be even worse measured from a year ago without the gains recorded since then by many biotechnology stocks.

While computer-related shares have suffered across the board, biotech has been a relative bright spot, even though many of those stocks also are down from their peak levels last year.

Within the Nasdaq 100, Amgen is up 22% since March 10, and Genzyme is up 55%.

* As investors have turned away from tech in the last year, many have opted not to flee the market entirely but rather to look for opportunities in non-tech companies.

Within the Nasdaq 100, the few stocks that have posted gains since March 10 include such names as financial services firm Concord EFS, up 190%; retailer Bed Bath & Beyond, up 109%; coffee retailer Starbucks, up 31%; payroll processor Paychex, up 17%; and truck maker Paccar, up 15%.

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Tom Petruno can be reached at tom.petruno@latimes.com.

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Nasdaq’s Giants, One Year Later

A year ago this Friday, the Nasdaq composite stock index hit its all-time high. Here’s a look at how the stocks in the Nasdaq 100 index have fared since. The Nasdaq 100 tracks the 100 largest nonfinancial stocks on Nasdaq. The index is capitalization-weighted, meaning the stocks with the greatest market values (stock price times number of shares outstanding) have the greatest influence on the index’s moves. Shown here is each stock’s weighting in the index, the share price on March 10, Monday’s stock price and the percentage change since March 10. Also shown is each stock’s estimated price-to-earnings ratio for 2001, based on analysts’ consensus estimate for earnings per share this year. (Note: The earnings estimates used are for whichever fiscal year ends for the company in 2001, which may not be for calendar 2001.) Stock data are adjusted for any splits.

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Ticker Weighting 3/10/00 Mon. Pctg. 2001 Company symbol in index price close chng. P/E Microsoft MSFT 8.21% $101.00 $57.44 -43% 32 Intel INTC 5.59 60.09 30.38 -49 29 Cisco Systems CSCO 4.57 68.19 23.08 -66 50 Qualcomm QCOM 4.35 136.13 62.94 -54 50 Oracle ORCL 3.10 40.81 17.00 -58 37 JDS Uniphase JDSU 2.97 138.00 28.31 -79 39 Amgen AMGN 2.71 59.56 72.81 +22 60 Sun Microsys. SUNW 2.24 47.09 20.94 -56 40 Veritas Soft. VRTS 1.85 168.69 59.81 -65 67 VoiceStream VSTR 1.83 117.38 96.06 -18 NE Immunex IMNX 1.83 71.08 31.69 -55 123 Ciena CIEN 1.83 81.44 69.88 -14 94 Dell Computer DELL 1.78 51.25 23.44 -54 29 Nextel NXTL 1.66 79.81 22.88 -71 NE Maxim Integ. MXIM 1.65 70.13 53.69 -23 43 Applied Mats. AMAT 1.57 96.53 47.56 -51 30 Xilinx XLNX 1.51 83.31 43.25 -48 37 Linear Tech. LLTC 1.49 50.78 45.81 -10 33 Comcast CMCSK 1.49 40.44 45.05 +11 NE Gemstar-TVG GMST 1.43 97.38 43.06 -56 86 WorldCom WCOM 1.30 46.69 16.13 -65 13 Siebel Sys. SEBL 1.30 81.44 33.63 -59 48 Altera ALTR 1.20 47.16 27.13 -42 46 Paychex PAYX 1.11 33.92 39.81 +17 60 Check Point CHKP 1.06 93.29 59.88 -36 46 Flextronics FLEX 1.06 36.19 26.69 -26 29 Chiron CHIR 0.99 59.94 47.44 -20 56 Comverse Tech CMVT 0.99 116.81 75.44 -35 52 Biogen BGEN 0.97 84.06 68.69 -18 36 Juniper Net. JNPR 0.95 141.22 58.63 -58 56 Starbucks SBUX 0.95 35.63 46.69 +31 51 Concord EFS CEFT 0.93 16.63 48.31 +190 41 ADC Telecom ADCT 0.87 26.88 11.63 -57 23 I2 Technol. ITWO 0.77 104.00 22.69 -78 63 Medimmune MEDI 0.77 63.98 43.88 -31 52 Genzyme GENZ 0.76 57.63 89.44 +55 39 Biomet BMET 0.76 20.75 40.75 +96 35 Sanmina SANM 0.76 31.77 30.56 -4 22 Apple Comp. AAPL 0.76 62.88 20.38 -68 NE Palm PALM 0.75 70.00 17.31 -75 128 PeopleSoft PSFT 0.74 24.63 23.94 -3 42 KLA-Tencor KLAC 0.73 91.13 41.75 -54 20 Bed Bath Bey. BBBY 0.72 11.81 24.69 +109 43 Network App. NTAP 0.71 118.44 28.50 -76 69 Costco COST 0.69 44.13 37.69 -15 27 Ericsson ERICY 0.67 25.16 9.00 -64 46 Idec Pharm. IDPH 0.67 43.11 54.94 +27 111 VeriSign VRSN 0.66 239.94 46.94 -80 79 Brocade Comm. BRCD 0.65 83.25 36.44 -56 63 USA Networks USAI 0.64 23.19 23.88 +3 NE Exodus Comm. EXDS 0.64 82.28 14.44 -82 NE PanAmSat SPOT 0.63 55.06 40.25 -27 235 Vitesse Semi. VTSS 0.62 87.56 39.06 -55 38 Mill. Pharm. MLNM 0.61 58.88 33.69 -43 NE EBay EBAY 0.59 96.63 38.00 -61 100 Fiserv FISV 0.59 34.13 49.13 +44 31 Cintas CTAS 0.57 27.69 36.44 +32 28 PMC-Sierra PMCS 0.53 245.44 37.94 -85 45 Adelphia Comm. ADLAC 0.53 49.81 42.06 -16 NE Echostar Comm. DISH 0.53 69.00 27.38 -60 NE Broadcom BRCM 0.52 243.06 47.13 -81 42 Human Genome HGSI 0.51 86.25 53.19 -38 NE Rational Soft. RATL 0.50 43.47 31.63 -27 44 Adobe Systems ADBE 0.50 41.63 27.06 -35 21 McLeodUSA MCLD 0.49 34.83 13.38 -62 NE Level 3 Comm. LVLT 0.47 130.19 23.88 -82 NE Yahoo YHOO 0.47 178.06 22.19 -88 59 Citrix Sys. CTXS 0.43 107.50 24.88 -77 33 TMP Worldwide TMPW 0.39 91.00 48.56 -47 35 BMC Software BMCS 0.38 51.94 27.13 -48 35 Metro. Fiber MFNX 0.37 41.75 9.03 -78 NE Staples SPLS 0.35 19.38 14.81 -24 26 XO Commun. XOXO 0.34 61.66 14.81 -76 NE Parametric PMTC 0.33 30.88 11.88 -62 31 Paccar PCAR 0.33 42.56 49.06 +15 16 Atmel ATML 0.30 27.22 11.50 -58 14 Mercury Int. MERQ 0.30 114.88 43.63 -62 48 Molex MOLX 0.29 62.67 38.56 -38 28 Smurfit-Stone SSCC 0.28 14.69 15.00 +2 17 Conexant Sys. CNXT 0.27 88.06 13.13 -85 NE QLogic QLGC 0.27 178.81 37.50 -79 37 Ariba ARBA 0.27 152.69 14.31 -91 56 Amazon.com AMZN 0.23 66.88 12.63 -81 NE Microch. Tech. MCHP 0.22 46.13 26.19 -43 22 Abgenix ABGX 0.19 89.69 32.13 -64 NE Novell NOVL 0.19 31.38 6.22 -80 39 RF Micro Dev. RFMD 0.18 83.34 12.63 -85 48 Compuware CPWR 0.18 23.88 10.31 -57 23 BroadVision BVSN 0.15 86.08 6.53 -92 38 CNET Networks CNET 0.14 67.75 11.88 -82 72 CMGI CMGI 0.11 136.44 4.06 -97 NE At Home ATHM 0.11 28.56 5.50 -81 NE 3Com COMS 0.10 14.49 7.16 -51 NE RealNetworks RNWK 0.09 81.63 7.50 -91 78 Inktomi INKT 0.09 169.31 9.38 -95 NE Nasdaq 100 QQQ 4,587 1,917 -58 NA index

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NE = no P/E ratio because loss or minuscule profit is expected for the period

NA = not available

Sources: Times research, Bloomberg News, IBES/Thomson Financial, Reuters