The ugly market has created an opportunity to buy a stock that could have a strong performance in the near term.
Vocus Inc. (VOCS) is a leading provider of cloud marketing software that helps businesses reach and influence buyers across social networks, online and through media. The Company offers an integrated suite that combines social marketing, search marketing, email marketing and publicity into a comprehensive solution to help businesses attract, engage and retain customers. Vocus software is used by more than 120,000 organizations worldwide.
Since the company is tangentially in the social media space, the lousy Facebook (FB) IPO didn't do it any favors. Nonetheless, the Company has had an interesting May and the next few days could provide investors with a quick pop. FBR raised its rating on the stock to Outperform and has a targeted range of $18-20 per share. Plus, four insiders, including the Chairman/CEO, COO, CFO, and a Director all bought stock around the $15 range. In fact the Chairman spent nearly $1 million on his purchases.
This scale does not happen often, but the stock had slid down in recent months, and has really based nicely, providing a nice entry point. Today, the Company is hosting an Analyst Day and the start of its annual User's Conference which usually means a lot of buzz could be coming from these events via analysts and others.
There is virtually no debt and the Company is very profitable with solid margins and it throws off a good deal of cash. The valuation at current prices (25x FY13E EPS) is reasonable given its expected EPS growth rate, and we view the FBR range as a sound targeted range. However, investors may best be served to primarily consider VOCS as a trade candidate, given the current market environment. For those with longer term horizons, if four senior people at the company are buying stock, that can't be a bad thing for the long haul.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.