Blackboard: A Compelling Small-cap Software Story (BBBB)

Dec.29.05 | About: Blackboard Inc. (BBBB)

I’ve added Blackboard, Inc. (NASDAQ:BBBB) to my watchlist. Blackboard provides enterprise software applications and related services to the education industry. It offers a suite of products, including Blackboard Learning System, Blackboard Community System, and Blackboard Content System. From a Motley Fool article:

Blackboard has more than 3,000 licenses with 2,225 institutions, serving students from kindergarten through graduate school. The average licensee pays close to $29,000 a year, and customers are renewing at a rate north of 90%. The firm is making inroads internationally, with more than 15% of its sales on foreign soil and a commitment to translate its software into eight languages by the end of this year. Moreover, the company just bought its largest competitor.

I like the fact that so many educational institutions are BBBB’s customers. Schools are notriously slow to change and when they adopt something they will usually stick to it for a few years till a new need arises. BBBB is a bit boring, and traded volume is low -- suggesting the stock doesn’t have much public awareness or speculation behind it. I may look at purchasing shares of BBBB if the stock drops below $28. It looks to me like investors are merely taking profits in a stable growing company.

BBBB 1-yr chart:

« Any opinions expressed on the Seeking Alpha sites are those of the individual authors and do not necessarily represent the opinion of SeekingAlpha or its management. »