Direct investing - includes list of available no-load stocks - Brief Article - Statistical Data Included

Black Enterprise, August, 1999 by Ivan Cintron

Direct stock purchase plans make a splash on the Internet

For years, cost-conscious individual investors who balked at paying brokers' fees to buy stocks have propelled the growth of direct stock purchase plans, called DSPs. This desire to cut out the middleman has also fueled the proliferation of Websites devoted to DSPs and DRIPs, or dividend reinvestment plans.

The sites range from the transaction-related, such as Netstock Direct (www.netstockdireet.com), to the purely informational, such as DRIP Central (www.drip central.com). Others offer access to a number of DSPs and DRIPs, but charge fees to provide this service. They also try to sign up subscribers to other, ancillary products.

Jeff Seely, president and CEO of Bellevue, Washington-based Netstock Direct, boasts that his site is the only one that does not charge investors a fee. The firm currently has 1,600 companies offering their DSPs on the site, but charges a minimum fee to only 250 of those companies which post their enrollment materials on the site. They include such well-known companies as BP Amoco (NYSE: BPA), General Electric (NYSE: GE) and Home Depot (NYSE: HD). However, Seely faults firms that serve only as portals to company DSPs. "On the Web today, to get you to the door of a transaction but not open the door is not what customers expect. It's like going to Amazon.com and not being able to buy the books," he says.

Here's the catch with most DSPs, however: they require a minimum investment of at least $250. Others, like Lucent Technologies (NYSE: LU), ask you to plunk down $1,000--an amount beyond the reach of some mom-and-pop investors. Some companies, like IBM (NYSE: IBM), will waive their minimum initial investment if you join their automatic debit plan. IBM's requires $50 a month for 10 months in lieu of a $500 minimum investment.

There are a handful of companies, however, that do offer one-share purchase plans, which allow investors who have never owned stock in a company because of high initial investment requirements to purchase just a single share. One relatively cheap way to buy such stocks is through the National Association of Investors Corp.'s Low-Cost Investment Plan (www.better-investing.org). Kenneth S. Janke, president of the NAIC, a Madison Heights, Michigan, umbrella organization for investment clubs, says the group offers this one-stock purchase option for 155 companies through its Website. If you are a NAIC member, there is a $7 setup fee to enroll, a $10 price fluctuation fee, plus the cost of one share of the company stock you want to buy.

Among the companies in NAIC's low-cost program are AT&T Corp. (NYSE: T), Mobil Corp. (NYSE: MOB) and Wendy's International Inc. (NYSE: WEN).

RELATED ARTICLE: Bypass Your Broker

Want to buy shares of your favorite company directly without paying a broker's fee? So do some other individual investors. The following stocks were the top 10 most sought after no-load stocks by visitors to www.netstockdirect.com as of June 1, 1999.

                           Minimum
                           Initial       Minimum
Company/Ticker            Investment   Reinvestment

Fannie Mae (NYSE: FNM)       $250          $25

General Electric              250           10
Co. (NYSE: GE)

Home Depot                    250           25
Inc. (NYSE: HD)

IBM Corp. (NYSE: IBM)         500           50

Lucent Technologies         1,000          100
Inc. (NYSE: LU)

Merck & Co.                   350           50
Inc. (NYSE: MRK)

Wal-Mart Stores               250           50
Inc. (NYSE: WMT)

Walgreen Co.(NYSE: WAG)        50           50

Walt Disney                 1,000          100
Co.(NYSE: DIS)

Warner-Lambert                250           50
Co. (NYSE: WLA)

                           Stock
Company/Ticker            Price(*)   Website

Fannie Mae (NYSE: FNM)    $67.31     www.fanniemae.com

General Electric          102.56     www.ge.com
Co. (NYSE: GE)

Home Depot                 55.81     www.homedepot.com
Inc. (NYSE: HD)

IBM Corp. (NYSE: IBM)     112.00     www.ibm.com

Lucent Technologies        56.00     www.lucent.com
Inc. (NYSE: LU)

Merck & Co.                68.13     www.merck.com
Inc. (NYSE: MRK)

Wal-Mart Stores            43.45     www.wal-mart.com
Inc. (NYSE: WMT)

Walgreen Co.(NYSE: WAG)    23.76     www.walgreens.com

Walt Disney                28.81     www.disney.com
Co.(NYSE: DIS)

Warner-Lambert             61.81     www.warner-lambert.com
Co. (NYSE: WLA)

(*) Closing price as of 6/1/99

Source: Netstock Direct

RELATED ARTICLE: For First-Share Buyers

If you don't have a single share of a company's stock and want to avoid high initial investment fees, first-share purchase plans can help The following are the stocks bought the most by members of the National Association of Investors Corp., a trade group for investment clubs, through its Low-Cost Investment Plans.

                            Number of       Minimum
Company/Ticker             Purchases(*)   Reinvestment

Intel (Nasdaq: INTC)          11,000          N/A

Wendy's International          7,900          $20
Inc. (NYSE: WEN)

Diebold Inc.(NYSE: DBD)        7,000           10

RPM Inc. (NYSE: RPM)           4,600           26

AFLAC Inc. (NYSE: AFL)         4,300           50

AT&T Corp. (NYSE: T)           2,600          100

Emerson Electric               1,900          N/A
Co. (NYSE: EMR)

GTE Corp. (NYSE: GTE)          1,800           25

Newell Corp. (NYSE: NWL)       1,600           10

                             Stock
Company/Ticker             Price(**)   Website

Intel (Nasdaq: INTC)        $50.69     www.intel.com

Wendy's International        27.81     www.wendys.com
Inc. (NYSE: WEN)

Diebold Inc.(NYSE: DBD)      28.25     www.diebold.com

RPM Inc. (NYSE: RPM)         13.69     www.rpminc.com

AFLAC Inc. (NYSE: AFL)       49.19     www.aflac.com

AT&T Corp. (NYSE: T)         55.06     www.att.com/ir

Emerson Electric             65.25     www.emersonelectric.com
Co. (NYSE: EMR)

GTE Corp. (NYSE: GTE)        63.56     www.gte.com

Newell Corp. (NYSE: NWL)     43.00     www.newellco.com