"VeriSign keeps the Internet's largest registry of domain names, those addresses that end in ".com" and ".net." The U.S. Commerce Department just approved a renewal of VeriSign's contract, which allows it to raise prices in four of the next six years. Running the registry is a high-margin endeavor that's growing 25% to 30% annually. Put a 25-to-30-times multiple on just this business' after-tax contribution, says Macnguyen, and you've already justified the stock's $24.50 price. The company also has a certification business, which reassures shoppers that a retailer's Website asking for their credit card is valid. The latest Internet browser from Microsoft has an address bar that glows green when visiting sites that have a VeriSign "extended validation" certificate -- which costs the retailer extra. Amazon and PayPal have already signed on for this VeriSign seal of approval. Put an 18-times multiple on VeriSign's profits from this enterprise, says Macnguyen, and it brings another $7 of value to the shares. VeriSign has several other units that provide services to telephone and cellular companies -- each worth perhaps $1 a share. It's got real estate worth almost $1 a share, as well as $2 a share in cash. Add it all up, Macnguyen figures, and VeriSign stock should be worth 40 bucks or more. The Mountain View, Calif. company has authorized a substantial stock-buyback program that's on hold while it investigates some errant options backdating. When that self-exam is done, Macnguyen expects VeriSign to start the buyback. "

"Macnguyen also likes Yahoo! (YHOO). He estimates that the Internet firm has been spending $400 million-$500 million a year on its search-advertising business. The Sunnyvale, Calif. company is enmeshed in a project it calls Panama, to make its search technology more competitive with Google's. If Panama works, Yahoo could improve its cash flow by 50%-to-100%. If it doesn't pan out, the downside will be cushioned. Yahoo could cut out hundreds of millions of dollars in annual spending and get paid to send its search traffic to Google. While Yahoo's earnings may encounter near-term bumps, Macnguyen thinks Google-smitten investors are overlooking the better risk/reward offered by Yahoo."

"Together, CVS and Caremark would have $44 billion worth of annual drug purchases. That would give it about 1.5 times the purchasing power of Walgreen's, twice that of Rite Aid and triple that of Wal-Mart. Every 1% savings in drug costs would yield 14 cents a share in earnings for CVS. If the merged business can grow its per-share earnings 20% annually for the next five years, it could command a 20-times multiple and a $50 stock price."

"The casket business is overcapitalized, he says, and could be levered up to yield a 5% dividend. Hillenbrand has already attracted the attention of buyout firms"

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