THE LOFTY RETURNS of a select group of e-commerce firms and turnarounds by a few other marketers are masking otherwise lackluster performance among consumer direct marketing stocks.
In the 12-month period that ended May 30, the 52 consumer DM issues tracked by Gruppo, Levey & Co.’s Direct Marketing Index rose by an average of 36.8%. In contrast, for June 1998 through May 1999, the benchmark Standard & Poor’s 500 gained roughly 19.4%.
Not So Rosy But underneath the strong average, the numbers are less promising. The median stock price increase for the 52 marketers was only 4.9%. Just as telling, the average price per share of consumer catalog stocks dropped 5.7% over the 12 months.
The stocks of eight DM companies soared more than 100% in value during the year, including four of the 12 electronic marketing firms tracked.
Gains were led by Amazon.com, which jumped 709% in the period, and e4L, up 377% as a new management team began to execute on an integrated direct response television/Internet strategy.
Strength among the electronic marketing issues came despite a lack of profits at all but four of those companies.
This review excludes firms acquired in the preceding quarter (Brylane, Fingerhut Cos. Inc., N2K).
Next quarter the DM Index will debut seven consumer marketing companies’ stocks in the catalog and electronic commerce sectors-Autobytel.com, Autoweb.com, BarnesandNoble.com, eToys, iTurf, Sportsman’s Guide and Ticketmaster Online-CitySearch.
