Stock Watch: CMGI Rockets On Coverage

Shares of Internet holding company CMGI (Nasdaq: CMGI) soared more than 20 percent on Wednesday, gaining 21 to 124-3/4 after the stock received favorable coverage from both Goldman Sachs and Prudential. Goldman Sachs gave CMGI a market outperform rating and a 12-month price target of $150, while Prudential reiterated its strong buy rating on the stock and upped its price target to $186.

CMGI received similarly positive coverage from Wit Capital two days earlier. According to Wit Capital, which gave CMGI a buy rating, CMGI could reach the $180 level in the next 12 to 18 months. CMGI, which has a market value of more than $14.5 billion, is not a cheap stock, but the company does have a lot going for it. For one thing, recent companies that it has taken public — such as Engage Technologies and NaviSite — have seen their stock prices soar. CMGI also plans to take AltaVista public sometime next year, and that initial public offering is expected to do similarly well, if not better.

In addition, CMGI looks like a bargain compared to business-to-business incubator Internet Capital Group (Nasdaq: ICGE). Internet Capital Group has a market value of more than $20.5 billion, even after its stock closed down 13-13/16 to 162 on Wednesday.

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