Skillsoft EarnsTop Marks with Impressive Earnings

Portfolio holding Skillsoft (SKIL) delivered another strong quarterly earnings report in Friday's trading pushing the stock to its highs last seen in November. I purchased Skillsoft in the portfolio originally in 2006 at right around $5 per share and the stock has exhibited a slow climb to the $10 level at which it trades today. In 2007, Skillsoft acquired one of its largest competitors, Netg, which is just starting to be accretive to the company's earnings and which allows Skillsoft to be one of the largest players in the sector.

In the company's press release, it guided to 17-20% revenue growth over the next year with gross margins of 86-87%. My projections are that the company will be able to grow bottom line earnings along with cash flows by 25% in 2009 and by 60% in 2010 as the full integration of Skillsoft with Netg gives the company more significant economies of scale.