Today Web.com (WWWW) added another strong member to its already talented management team. The company announced the appointment of Joseph A. Newcomb as Executive Vice President, Secretary and General Counsel.
Blog
Archive for March, 2006
New Stock Pìck: ActivIdentity (ACTI)
Investment Summary:
We believe that ActivIdentity (Nasdaq: ACTI), at its current price of about $4.37, represents a low-risk investment, with substantial upside price potential in the next two to three years, as the company capitalizes on new growth opportunities in the digital identity assurance market, under the guidance of the new CEO, Jason Hart.
Investing is a Boring Business
We have not posted in a view days, but in the interim we have received several emails asking us for some new picks. Well, we´re sure looking, but we have not find any stocks yet that meet our criteria of low downside risk and high upside appreciation potential. For now we´re just sticking with our current holdings, which are doing quite nicely. We are of course tracking a couple of potential interesting investment gambles, but they have not gone down enough in price so that downside risk is limited. Which brings us to the topic of this post: Successful Investing is a Boring Business.
T-3 Energy Services (TTES) Earnings Update
T-3 Energy Services (TTES) just reported excellent fourth quarter earnings. It´s hard to know how to value this company, given its exposure to the cyclical Oil and Gas industry, but the numbers sure make us optimistic about the coming year. Given the extremely low float in this stock, a modest valuation upgrade for the shares (they currently trade at less than 12X forward estimates, even though the company is growing at triple digit rates) could send the stock up 45%. At the same time, the downside appears quite limited because of the much improved balance sheet, solid business outlook, strong earnings growth expected during 2006, and the current low valuation.
Stanford´s View on Internap (IIP)
For those investors without access to Wall Street research reports, this post provides some notes from Stanford Financial Group´s March 1st, 2006 research report on IIP. The analyst´s target price is a bit higher than mine, primarily because I am applying a larger discount to the EV/EBITDA multiple for IIP.
Note: If you plan to link to this post or copy it in any manner, please be sure to credit: Stanford Financial Group (Rod Ratliff)
Internap (IIP) Earnings Review
Internap reported decent earnings results last evening. There were several positives, and a few negatives. Overall, there is clearly enough improvement in Internap´s financials to warrant holding onto to the stock, and the stock still appears undervalued primarily because the business is solid, EBITDA growth in 2006 will be excellent, and management at IIP is still underperforming basic industry financial metrics leaving room for additional stellar financial improvements.
I´m putting a conservative $0.60 per share target on the stock, which represents about 12X estimated 2006 EBITDA. The value disconnect in the stock reflects an inept management team, but therein of course lies the opportunity for potential acquirers and current investors (i.e. fire 5% of the upper executives at IIP and EBITDA goes up dramatically). In theory, the dramatic EBITDA growth in 2006 warrants a much higher multiple, but I´m not yet completely comfortable with the current new CEO´s ability to manage the financials here, so I´d rather be conservative and wait a quarter or two before assigning a higher multiple. As an aside, if the company seems capable of meeting the high end of EBITDA projections, as the year progresses, there is no reason not to assign a value of at least $0.90 per share to IIP.
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