Shutterfly: The Most Important Company in the World

I’ve decided that this is the stock pick that I want to be remembered by. It is Shutterfly (Ticker: SFLY). My time line is forever. It’s not about the numbers (which are not bad). It’s about my chubby, adorable grandson, Connor Matthew.

Shutterfly offers digital photo printing, personalized books, calendars, etc.; they have fostered relationships with computer manufacturers like Dell (DELL) and Apple (AAPL) as well as retailers like Target (TGT). Their annualized 5-year sales growth is an impressive 75%. None of this really matters to me, however. They archive your pictures for you, and that is what makes this company so valuable. Computers crash, there are floods and fires, things get lost. When I hear victims of disasters speak, time and time again, the physical loss that grieves them the most is their family photos, priceless memories, gone forever.

Shutterfly does have competitors, Snapfish (owned by Hewlett-Packard (HPQ)) and Flickr (owned by Yahoo (YHOO)) to name two. Personally, I hope Shutterfly will remain independent, but considering their modest market cap of about $750 million, they may be a buyout candidate for one of the tech giants. I don’t really like the thought of my most treasured memories being part of some over-diversified conglomerate’s bottom line.

Torture the numbers until your heart’s content, but here’s something worth a thousand words:

That’s my son Jake, and the chubberball is, of course, Connor Matthew. This image means so much to me now. What will it be worth to them in 50 years? It resides at Shutterfly, and that’s why it is “The most important company in the world”, at least to me.

Special thanks to Jonathon Carlucci, who introduced me to Shutterfly about four years ago, and who helped galvanize my opinion that Shutterfly was the kind of buy and hold opportunity most of us spend our lives seeking.

Disclosure: I own no shares as of this writing, but will be buying it today, Monday November 12, 2007 at somewhere around $31.