Envoy Global Research

Incredimail Raises Guidance - Stock Should Really Trade Higher

"just not sure why people wouldn't it be buying it like there's no tomorrow."

We were all thinking the same thing when MAIL was at $3 and was trading at a negative enterprise value. And yet, eventually it doubled and more.

Just give it time and the stock will perform well. It takes time for the Market to catch up with these types of micro caps.

In the meantime, we all collect our dividend, which as Michael has pointed out, is better than we can get in any money market. The dividend, at this rate, is well covered for a decade, just given the cash and profitability.

Vocaltec: A Company with Cash and a Growing Business in Emerging Markets

MAIL continues to slide. Maybe you can suggest to management over at ANSW to takeover MAIL? Seems like ANSW has more credibility with Wall Street, so they garner a higher valuation than MAIL, despite having a very similar business model and despite MAIL's larger top line and better profitability. So an acquisition of MAIL would be immediately accretive for ANSW and support a much higher valuation for ANSW shares.

Vocaltec: A Company with Cash and a Growing Business in Emerging Markets

I think it is important to add that VOCL has approximately $2 million in restricted cash, which is seemingly used as a security deposit against certain leases (according to the 20-F). This seems very high for these purposes, and since I can't find any other reason for such a high restricted cash balance, I believe that some of the restricted cash will be freed up soon, implying that the cash balance/per share is a bit higher than you estimate.

All in all, it seems unbelievable that a company whose business is improving every quarter (they should break even by year end), and that finds itself at very opportune time in the VOIP industry, can trade at a negative enterprise value. The risk/reward here is simply incredible.

Very similar situation to MAIL at $3, and once people discover VOCL it should provide a similar return.

Vocaltec: A Company with Cash and a Growing Business in Emerging Markets

Hi Michael,

Thanks for writing up VOCL. I highlighted this on Envoy Research back in August.

I think it

IncrediMail: Drop in Share Price Isn't Based on Fundamentals

Funny, the fact the VC sold at $2.60 last year, was exactly the reason why I bought back then.

When VC's need cash for whatever reason, and they sell long-term holdings that they are tired off, they nearly always sell at the exact bottom. It's a common buying signal. VC's dumps everything at a ridiculous valuation, you buy.

As for the dividend, they have over $25 million in cash, and they can support this dividend for years even with lower profits. Nevertheless, their dividend rate now is 50% of net profits this year. Easily covered.

How anyone views this type of dividend as a negative is beyond me. If only every publicly-traded company paid out this percentage amount in dividends every year, instead of paying executives exorbitant salaries and stealing profits from shareholders, the stock market would once again become a true investment vehicle instead of the gambling casino it has become. Bravo to MAIL management for making investing meaningful again, and doing what every public company should do, share profits with shareholders so that we don't have to rely on speculative share price gains for income.

IncrediMail: Drop in Share Price Isn't Based on Fundamentals

The flipside is that once Yaron is done selling, and I'm reasonably certain he is close to or already done, the stock will rebound quickly.

The sell-off obviously has nothing to do with fundamentals. MAIL's latest dividend announcement is equal to their entire income for the first half of 2009. Their policy is now to payout 50% of net income each year as a dividend, meaning that earnings for this year will be at least $0.80 per share. Though, I expect it to come in a bit higher. So excluding cash, the stock is at about 7X earnings, which is still very cheap for this type of business.

IncrediMail Buying Opportunity: Stock Sales Misjudged

Good points.

It's also worth mentioning that as Yaron sold, SPROTT ASSET MANAGEMENT LP out of Canada, a highly respected fund, picked up a 5% position in MAIL.

Also, I don't think Wall Street is misjudging MAIL, as I believe few on Wall Street even know about this company yet, as indicated by the extraordinary low valuation and lack of analyst coverage. Incidentally, MAIL management has only recently started to talk to the Street.

Notably, Google hit a 52-week high today. MAIL is basically a "distributor" for Google. With Hi-Yo gaining traction and the new version of Incredimail now out, it is very likely that MAIL will continue to surprise on the upside.

Clunkers and Home Buyer Tax Credit: All the Same Thing

This is a fantastic article and articulates a theory for the housing bounce that few have written about, but that seems to be 100% accurate. Great analysis.

Vonage Earnings: Significantly Better than Expected, Turnaround Is Progressing

The inability to add subscribers may or not be true, but the point is that even if that is the case, VG doesn't have to add any subscribers now, for the stock to appreciate significantly. The current subscriber base now provides ample free cash-flow, and can form the base for upsells of news products and services.

No Future for Vonage

They have 2.5 million subscribers right now. Alot recurring revenue, happy customers, and cash-flow to work with to grow the mobile offering.

No Future for Vonage

POTS goes away? Call me in ten years from now with that potential issue. By then VG has already morphed into something else.

No Future for Vonage

Very silly article. You clearly don't know how to read a financial statement. Vonage did over $30 million in EBITDA this past quarter and nearly $15 million in free cash-flow. The stock is trading at less than 2X EV/EBITDA. The company is not going anywhere. The future is that the company is now a cash cow. And the less they spend on marketing and just focus on their core customers who love the service, the more cash they'll bring in.

Short j2 Global at Your Own Peril

So overall, this author is 100% correct. This is one of the silliest short ideas, I've ever seen. Pristine balance sheet with no debt, tremendous free cash-flow, recurring revenues, low valuation, and not one iota of evidence that their business is in declining or faces any major competitive threats. In fact, they are buying out their competition. And even if the business was declining, the company's low valuation already reflects that worry.

By the way, I use OneBox and eFax for my businesses. Both are great services and I'll be using them for another decade.

Short j2 Global at Your Own Peril

You've clearly never used OneBox, if you think Google Voice competes with it.

Also, you've obviously never used eFax is you think the usage is going away anytime soon. Until there is a valid and widely accepted form of online signature (which is never going to happen in the next decade at least), fax will remain a key business process. Maybe not growing as in industry, but still vital to the functioning of nearly all businesses.

IncrediMail Raises Guidance: Expect Stock to Head North

It is actually quite simple to project revenues from search and adsense. Anyone who is in this business does it all the time. It is based on estimates of traffic, search queries, and average cost per click. For all of this data you have historical trends, as well as recent information. Estimates tend to be very conservative here, since you don't assume a major increase in traffic.