VOLUME 01: ISSUE 07 Dow Jones 9,204.11 + 40.89 8:33 pm EST, Fri., October 19, 2001 NASDAQ 1,671.31 + 18.59 For info, visit access.smallcapnetwork.com S & P 500 1,073.48 + 4.87 To be removed, please click here. Russell 2000   425.70  + 4.64   Dear SmallCap Network Members: On Wednesday, we published our first SHORT TERM TRADING ALERT on Chad Therapeutics (AMEX: CTU.) CTU has traded within or above our trading guidelines since that time and appears ready to break to the upside. If you missed the STTA on CTU and would like to review it, please click here. Over the past two days, weve heard from many Network Members requesting more information on companies that have merit as turnaround candidates over the next twelve months. So todays WEEKEND OUTLOOK issue offers FIVE COMPANIES THAT COULD DOUBLE in the next twelve months. These companies are fallen angels that were once high flyers Wall Street couldnt own enough of until tech stocks collapsed in early 2000. These companies all share one fact in common: they have been punished incredibly over that past year and a half and are trading at or near all time lows. We urge you to consider this important guideline should you choose to invest in any of these issues.  If an issue doubles in the next twelve months, SELL HALF THE POSITION. This strategy accomplishes two things. First, it returns 100% of your risk capital to pursue other situations. Second, it allows you to hold the remainder of your position in the issue on a RISK FREE basis. FIVE STOCKS THAT COULD DOUBLE IN THE NEXT TWELVE MONTHS #1- CISCO SYSTEMS (NASDAQ: CSCO) Industry Group: Communications Equipment. Todays closing price: $16.75. On February 6, 2001, shares of CSCO closed at $35.75 and gapped down the following day to close at $31.06 on three times the prior days volume. This marked the continuation of a downtrend that carried CSCO to an April 6 closing low of $13.62. The shares rallied to close at $23.48 six weeks later (May 22) only to hit a new low on September 27 at $11.24. Since that time, shares have rallied with the rest of the market BUT APPEAR POISED TO PULL BACK slightly from current levels. We view any weakness in CSCO between now and year end as an excellent opportunity for investors to load up on this great company. In the next twelve months, we think CSCO will attempt to retest the gap created in early February of this year, making it our number one turnaround pick for the next twelve months. CSCO CEO John Chambers is one of the top business leaders in America today and if the economy turns around next year, CSCO undoubtedly will too.  SCN 12-MONTH PRICE TARGET: $34.00 #2- Akamai Technologies (NASDAQ: AKAM) Industry Group: Computer Services. Todays closing price: $3.50. One year ago today, AKAM shares closed at $52.78 on the way down from an all-time high of over $300.00 in January 2000. AKAM has produced a steady string of quarterly losses since it began trading publicly in late 1999. However, since that time revenues have skyrocketed. Third quarter revenues reported on October 11 were up 57.4% over the prior year quarter to $42.8 million even in a bad economy. At the end of the quarter, AKAM had $239.6 million in cash and equivalents, and estimated $100 million in negative free cash flow in 2002. The Company projects EBITDA breakeven by second quarter 2002. AKAM provides a global delivery service for Internet content, streaming media, and applications that improve Web site speed, quality, reliability, and scalability, provide protection against Web site failures. Since hitting an all-time closing low of $2.65 on October 1, AKAM shares rallied to close at $4.13 just eight trading days later before drifting back again the past few sessions. Selling volume has been trending lower all year and appears to have all but dried up. It appears the next significant move in AKAM shares will be up, however we caution SmallCap Network Members ONE MORE PRICE DIP COULD OCCUR before year-end. Nonetheless, we have no problem making AKAM our #2 turnaround pick for the next twelve months. AKAMs 200 day moving average price is somewhere north of $40-$50 per share. Any retest of the 200-day moving average in the next few months would undoubtedly push AKAM shares dramatically higher. SCN 12-MONTH PRICE TARGET: $8.00. #3- LEVEL THREE COMMUNICATIONS (NASDAQ: LVLT) Industry Group: Communications Services. Todays closing price: $3.05.  LVLT is a telecommunications and information services company that operates an advanced, international facilities-based communications network based on IP technology. For the six months ended in June, LVLT increased revenues from $411 million to $838 million. However, LVLT showed a $1.27 billion loss up from $552 million and has announced plans to spend as much as $1.05 billion to repurchase up to $2.86 billion of its debt. LVLT shares traded over $120 per share prior to the tech collapse in 2000. The stock started 2001 trading just north of $30 per share before continuing its precipitous decline. Since breaking the $5.00 mark in June, LVLT shares have been in a basing pattern for the past four months. On October 5, LVLT shares hit a closing low of $1.98 but have closed over $3.00 four times since then. The October 5 closing low of $1.98 on volume of over 25 million shares represented a capitulation bottom. The basing pattern in LVLT shares has broken the long-term downtrend the stock has been in since early 2000. For LVLT shares to double from current levels would put the market cap of the issue at about $2 billion, which also happens to be a pretty safe estimate of what the company will do in revenues next year. At a market cap of one times next years sales projections, we like LVLT as a great speculative play from current levels, and a good pick for a turnaround. SCN 12-MONTH PRICE TARGET: $6.50. #4- COMMERCE ONE (NASDAQ: CMRC) Industry Group: Computer Services. Todays closing price: $2.58. CMRC was one of Wall Streets glamour stocks until the Internet sector crashed in 2000, trading as high as $135.62 on March 9, 2000. The Street was enamored with CMRCs software applications providing B2B electronic commerce solutions linking buyers and suppliers of goods and services into trading communities over the Internet. Two days ago, CMRC announced third quarter results that showed revenues down to $81 million from $113 million in the year-ago quarter. The Company lost $119 million or $0.45 per share versus a $0.37 loss in the prior year. These results werent out of line with expectations and the stock closed at $2.41 on Thursday before bouncing $0.15 today. Despite the weak quarter, CMRC products continue to gain ground in their space, and we believe 2002 will prove much better for the Company than this year did. Stochastic indicators are almost into oversold territory once again, and the stock looks like a tremendous candidate for a short-covering rally between now and year end. As such, we are very comfortable making CMRC our #4 turnaround pick. SCN 12-MONTH PRICE TARGET: $5.25. #5- EMC Corporation (NYSE: EMC) Industry Group: Computer Storage Devices. Todays closing price: $11.51. EMC is an interesting company in a very beaten down group.  On October 20, 2000, just one year ago, EMC closed at $100.00 per share before going into a 12-month free fall.  During the last several weeks we have witnessed EMC shares pressing against an $11.00 bottom witnessed on October 2, 2001 The Company lost $270 million, or 12 cents a share, in the third quarter, excluding charges. Wall Street was expecting a loss of 5 cents a share. The company earned 20 cents in the year-ago period. Revenue dropped to $1.21 billion from $2.3 billion. The company took an $825 million restructuring charge in the period and announced plans to cut additional staff, bringing the total number of job cuts to around 4,000. EMC has had a rough go, however most analysts expect a return to profitability by the second half of next year. In most cases, stocks will show an upturn three to six months before actual events unfold. This gives us a real good feeling about EMC shares at current price levels. As we stated, the Computer Storage Device sector has been one of the worst performing sectors in the market over the last thirteen weeks. Despite all that's bad, EMC shares have held their bottom remarkably well recently. EMC has a 200-day EMA of over $35.00 per share and while this statistic is in decline, we fully expect a retest in the next few months. SCN 12-MONTH TARGET PRICE: $23.50. There you have our top five turnaround picks for 2002. 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