Accumulate Akamai, but Hold At Home

Also: analysts' opinions on General Dynamics and Exodus Communications

Akamai (AKAM ): Reiterates 4 STARS (accumulate) and Excite At Home (ATHM ): Reiterates 3 STARS (hold)

Analyst: Scott Kessler

Akamai shares Monday rose sharply, reflecting its announced partnership with Oracle to accelerate dynamic Web content delivery. The deal portends well for Akamai's intention to further penetrate the corporate streaming market, which Jupiter Media Metrix said recently will be notably larger than the consumer segment. By contrast, At Home announced 380 more layoffs (15% of workforce), on top of 250 from January, from its media units. Akamai's enterprise focus is more compelling.

General Dynamics (GD ): Reiterates 3 STARS (hold)

Analyst: Robert Friedman

The acquisition of Galaxy Business Jets for $330 milion would further strengthen General Dynamic's already strong position in the fast-growing business jet industry. S&P expects strong global growth trends to continue for many years as ongoing unreliability and inconvenience of commercial airlines aids demand for fractional corporate jet ownership. At 4.5 times the projected 2002 operating profits, General Dynamics is buying the Israeli company at a good price. General Dynamics has excellent long-term EPS growth, and return on equity at record levels. Still, the shares are pricey for entry now.

Exodus Communications (EXDS ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Mark Basham

S&P views recent management departures as a positive development. S&P believes management will now tighten its strategic focus on growing operating cash flow and achieving positive earnings before goodwill amortization. Exodus' customer list is rapidly shifting to mostly established enterprises. S&P believes further fallout from the dot-com exposure will be less than feared and that the company's capital plan is fully funded. S&P forecasts EBITDA more than tripling in 2001 and doubling in 2002, with positive EPS in early 2003.