ABOUT: Liquidity Services, Inc. [LSI] is an online auction marketplace for wholesale, surplus and salvage assets. The Company enables buyers and sellers to transact in an automated online auction environment offering over 500 product categories. Its marketplaces provide professional buyers access to a global supply of wholesale, surplus and salvage assets presented with digital images and other relevant product information. The Company's online auction marketplaces include www.liquidation.com, www.govliquidation.com and www.liquibiz.com. It also operates a wholesale industry portal, www.goWholesale.com, which connects advertisers with buyers seeking products for resale and related business services. In October 2006, LSI completed the acquisition of the wholesale business of STR, Inc. On May 24, 2005, it acquired substantially all of the assets of Aldnet Media Group, LLC.
FUNDAMENTALS: Liquidity Services is a company that really began to ramp up growth towards the end of '05 and hasn't looked back. In the past year, profits have nearly doubled on sales growth of near 50%. Earnings growth estimates for '07 and '08 are quite positive at between 30 - 35%. Return on Equity is very good at around 20% and management is behind the company with 60% ownership. If there is one negative, it's in the margins which are well below industry averages (net margin about 6%).
TECHNICAL: Following its earnings report Thursday, the stock broke out of a base to a new all-time high with near record volume behind the move. With no resistance ahead and institutions jumping in, the coast appears to be clear for LQDT to move much higher in the coming months.
Full Disclosure/Disclaimer: I currently do not hold a position in LQDT.
LQDT 1-yr chart: