It looks like the "Risk On" trade is on today after the long holiday weekend, despite the ongoing mess in Europe. Keeping in the spirit of the trading day, I recently came across a rapidly growing $7 stock worth serious consideration: NetSpend Holdings (NTSP).
7 reasons NTSP appears to be a solid value at just over $7 a share:
- Analysts expect low double digit revenue growth for both FY2012 and FY2013 and the stock has a five year projected PEG significantly under 1 (.63).
- Consensus earnings estimates for FY2012 and FY2013 have held steady over the last three months, despite falling significantly for its competitor Green Dot (GDOT).
- It is just entered into a distribution deal with Family Dollar (FDO).
- Valuation is reasonable at less than 12 times forward earnings and just over 10 times operating cash flow.
- Credit Suisse up its price target on NTSP to $11 from $10.50 after its last earnings report as the company beat its estimates.
- The company's cards are currently available for purchase in 8,000 locations, but the company expects that to increase to 15,000 locations by the end of this year. Its cards can be reloaded at 130,000 locations and it recently added Walgreens (WAG) to its reload network.
- NTSP is selling in the bottom third of its historical valuation range based on P/B and P/CF.
Disclosure: I am long WAG.