Seeking Alpha
Value
Profile| Send Message|
( followers)  

With several high profile tech IPOs over the last year, the interest in internet stocks has grown substantially. Today we focus on internet stocks that are set apart not only by having strong profitability, but also by having wide backing from industry analysts. We came up with a rather diverse list - we hope you enjoy.

The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue

EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.

We first looked for internet stocks. We then looked for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3). We next screened for businesses that have been able to retain strong profit margins on the bottom line (Net Margin [TTM]>10%)(1-year fiscal EPS Growth Rate>10%). We did not screen out any market caps.

Do you think these stocks have strong fundamentals? Use our list to help with your own analysis.

1) Bitauto Holdings Limited (NYSE:BITA)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$149.90M
Beta:-

Bitauto Holdings Limited has a Analysts' Rating of 1.30, a Net Margin of 13.01%, and a Earnings Per Share Growth Rate of 102.69%. The short interest was 0.14% as of 06/18/2012. Bitauto Holdings Limited provides Internet content and marketing services for the automotive industry, primarily in the People's Republic of China.

2) Google Inc. (NASDAQ:GOOG)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$186.11B
Beta:1.08

Google Inc. has a Analysts' Rating of 1.80, a Net Margin of 27.09%, and a Earnings Per Share Growth Rate of 13.10%. The short interest was 1.70% as of 06/18/2012. Google Inc., a technology company, maintains an index of Web sites and other online content for users, advertisers, and Google network members and other content providers. It offers AdWords, an auction-based advertising program; AdSense program, which enables Web sites that are part of the Google Network to deliver ads from its AdWords advertisers; Google Display, a display advertising network that comprises the videos, text, images, and other interactive ads; DoubleClick Ad Exchange, a real-time auction marketplace for the trading of display ad space; and YouTube that provides video, interactive, and other ad formats for advertisers. The company also provides Google Mobile that optimizes Google's applications for mobile devices in browser and downloadable form, as well as enables advertisers to run search ad campaigns on mobile devices; and Google Local that provides local information on the Web.

3) Akamai Technologies, Inc. (NASDAQ:AKAM)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$5.61B
Beta:0.90

Akamai Technologies, Inc. has a Analysts' Rating of 2.20, a Net Margin of 16.10%, and a Earnings Per Share Growth Rate of 18.54%. The short interest was 3.91% as of 06/18/2012. Akamai Technologies, Inc. provides content delivery and cloud infrastructure services for accelerating and improving applications over the Internet in the United States and internationally. The company offers application and cloud performance solutions to enhance the operation of the applications used by enterprises to connect with their employees, suppliers, and customers. Its solutions include Web Application Accelerator, which enables enterprises to run various applications; and IP Application Accelerator that is designed to optimize the performance, availability, and real-time sensitivity associated with IP-enabled applications delivered over Internet-related protocols.

4) OpenTable, Inc. (NASDAQ:OPEN)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$1.01B
Beta:-

OpenTable, Inc. has a Analysts' Rating of 2.50, a Net Margin of 15.28%, and a Earnings Per Share Growth Rate of 51.12%. The short interest was 48.51% as of 06/18/2012. OpenTable, Inc. provides restaurant reservation solutions in the United States, Canada, Germany, Japan, Mexico, and the United Kingdom. It offers solutions that form an online network connecting reservation-taking restaurants and people who dine at those restaurants. The company provides electronic reservation book (NYSEMKT:ERB) that combines proprietary software and computer hardware to deliver a solution, whcih computerizes restaurant host-stand operations.

5) SouFun Holdings Ltd. (NYSE:SFUN)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$334.44M
Beta:-

SouFun Holdings Ltd. has a Analysts' Rating of 1.80, a Net Margin of 30.53%, and a Earnings Per Share Growth Rate of 57.13%. The short interest was 0.59% as of 06/18/2012. SouFun Holdings Limited operates a real estate Internet portal in the People's Republic of China. It offers marketing services primarily through advertisements on its soufun.com Website to real estate developers in the marketing phase of new property developments, as well as to real estate agencies and other home furnishing and improvement vendors who wish to promote their products and services, including home furnishing and improvement products and services, furniture, electronics, and other products. The company also intends to integrate paid priority placement of customer links in keyword search results into its current search and search ranking services.

6) Blucora, Inc. (NASDAQ:BCOR)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$502.78M
Beta:1.29

Blucora, Inc. has a Analysts' Rating of 2.30, a Net Margin of 13.67%, and a Earnings Per Share Growth Rate of 224.14%. The short interest was 4.96% as of 06/18/2012. Blucora, Inc., together with its subsidiaries, provides white label search and monetization solutions to Web publishers worldwide. The company also operates its own branded search sites, including Dogpile, a metasearch engine, as well as MetaCrawler and WebCrawler. In addition, it offers online tax preparation solutions to consumers and professional preparers.

7) Baidu, Inc. (NASDAQ:BIDU)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$42.39B
Beta:1.87

Baidu, Inc. has a Analysts' Rating of 1.70, a Net Margin of 45.43%, and a Earnings Per Share Growth Rate of 88.08%. The short interest was 1.53% as of 06/18/2012. Baidu, Inc. provides Internet search services. The company offers a Chinese language search platform on its Website, Baidu.com.

8) Facebook, Inc. (NASDAQ:FB)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$67.16B
Beta:-

Facebook, Inc. has a Analysts' Rating of 2.40, a Net Margin of 26.95%, and a Earnings Per Share Growth Rate of 79.57%. The short interest was 8.07% as of 06/18/2012. Facebook, Inc. operates as a social networking company worldwide. The company builds tools that enable users to connect, share, discover, and communicate with each other; enables developers to build social applications on Facebook or to integrate their Websites with Facebook; and offers products that enable advertisers and marketers to engage with its users. As of February 2, 2012, it had 845 million monthly users and 443 million daily users.

9) Yandex N.V. (NASDAQ:YNDX)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$6.01B
Beta:-

Yandex N.V. has a Analysts' Rating of 2.20, a Net Margin of 28.22%, and a Earnings Per Share Growth Rate of 42.22%. The short interest was 2.04% as of 06/18/2012. Yandex N.V., an Internet and technology company, operates an Internet search engine in Russia and internationally. It offers access to a range of information available online; localized homepages for specific geographic markets; and personalized and email services. The company also provides specialized search services comprising news aggregation and information services; and price comparison services, such as product information, price comparisons, and consumer-generated reviews of products and online retailers, as well as other specialized search services, including search services for images, videos, music, theatres, televisions, weather, jobs, transportation, cars, and real estate.

10) Ancestry.com Inc. (NASDAQ:ACOM)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$1.19B
Beta:-

Ancestry.com Inc. has a Analysts' Rating of 1.70, a Net Margin of 16.17%, and a Earnings Per Share Growth Rate of 70.90%. The short interest was 21.46% as of 06/18/2012. Ancestry.com Inc. operates as an online family history resource for subscribers worldwide. The company's subscribers use Web-based services and content collection to research their family histories, build their family trees, collaborate with other subscribers, upload their own records, and publish and share their stories. Its subscribers can search through its collection of various records that cover birth records, marriage and death records, census records, immigration documents, photographs, maps, military records, personal narratives, and newspapers.

11) ValueClick, Inc. (VCLK)

Sector:Technology
Industry:Internet Information Providers
Market Cap:$1.31B
Beta:1.58

ValueClick, Inc. has a Analysts' Rating of 2.10, a Net Margin of 17.74%, and a Earnings Per Share Growth Rate of 26.77%. The short interest was 8.80% as of 06/18/2012. ValueClick, Inc. provides various products and services that enable marketers to advertise and sell their products through online marketing channels primarily in the United States and the United Kingdom. The company's Affiliate Marketing segment provides technology platforms, advertising network, and customer services, which enable advertisers to create their own commissioned online sales force comprising third-party Website publishers. This segment offers its services under the Commission Junction brand.

*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.

Source: 11 Profitable Internet Stocks Analysts Love