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Shutterfly, Inc. (NASDAQ:SFLY) has attracted considerable attention by snatching up Kodak's (rest in peace) online photo services division for $23.8 million. SFLY share prices increased 16.54% and Shutterfly's trading volume ballooned to 8.8 million shares on Friday. Arguably the stock was already glamorous based on the interest in social media stocks. Is this focus on SFLY warranted, or should investors zoom out for a wider perspective?

As simple as it sounds, you are better off shopping around than focusing on newsworthy or popular stocks. Moreover, many of them are trading at lower price multiples.

Instead of news stories, SFLY's earnings and future cash flows will determine its value. The future financial potential of a stock can be gauged by using financial metrics to determine how cheaply a stock is priced, its ability to weather hardship, and its growth potential.

As alternatives to SFLY, consider the following stocks with strong track-records and solid credit scores:

Ticker

Company

Industry

10-Year Average ROE

Altman Z-score

ASYS

Amtech Systems Inc.

Semiconductor Equipment & Materials

2.3%

3.31

CMTL

Comtech Telecommunications Corp.

Communication Equipment

13.9%

3.72

SEAC

SeaChange International Inc.

Application Software

0.4%

3.05

Shutterfly, Inc.

Internet Information Providers

2.8%

7.50

Like SFLY, these alternative stocks are all categorized as "safe" according to the Altman Z-score,* indicating that they are not considered bankruptcy risks. Moreover, the average 10-year return on equity (from the last ten reported fiscal years) demonstrates that these four stocks have grown shareholder wealth at a higher annual rate. It is clear from these two metrics that each of these five alternative stocks is a "high" quality stock capable of weathering bad times and delivering positive long-term results.

What's more, these stocks are cheaper and have higher growth prospects:

Ticker

P/E

P/S

P/B

EPS growth next 5 years

ASYS

5.14

0.39

0.75

35.0%

CMTL

16.89

1.18

1.23

35.0%

SEAC

18.92

1.02

1.00

46.0%

SFLY

104.5

2.31

1.79

34.3%

Based on lower price-to-earnings ratios, price-to-sales ratios, and price-to-book ratios, these stocks are cheaper than Shutterfly at current market prices. Better yet, they have better growth prospects according to analyst projections. Rather than restrict yourself to concentrated investments in one stock like SFLY, consider a diversified mix of these five securities as a more attractive alternative.

*Please read the article disclaimer.

Source: Better Deals Than Shutterfly