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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs and Seeking Alpha. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and... More
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Marketocracy Capital Management
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  • The Internet is here to stay -- Profit from it 0 comments
    May 19, 2010 11:03 AM | about stocks: VRSN
    Having a successful investment portfolio is not just stock picking; its also portfolio management. Don't be afraid to cut loose stocks that don't meet your criteria and always have a list of stocks you'd like to buy if conditions are right.

    The Internet is growing by unbelievable leaps and bounds and companies properly positioned to take advantage of that growth should benefit. VeriSign (NASDAQ:VRSN) is one of the leading providers of trusted infrastructure services to website owners, enterprises, electronic commerce service providers and individuals. The company's domain name registration, digital certificate, global registry and payment services provide the critical web identity, authentication and transaction infrastructure that online businesses need to establish their web identities and to conduct secure electronic commerce, or e-commerce, and communications.


    The company has initiated Project Apollo which is a 10 year initiative to increase its infrastructure capacity by 1,000 times its present size. Since they sell Internet access could that mean a 1000 times increase in revenue? Probably not as sales prices per unit of data will come down and margins might get squeezed but growth is still in the picture. They are also buying back $54 million in share to increase shareholder value.

    Wall Street has taken notice with 12 buy and 7 hold recommendations published. Analysts estimate sales will increase by 5.90% this year and 10.40% next year. The double digit growth in earnings is what interests me. An EPS growth of 19.50% this year and 15.70% next year is predicted. The forecasted 5 year annual compounded EPS growth rate is expected to continue at a rate of 12.64%.

    Investor sentiment is high on Motley Fool with the CAPS members voting that the stock will beat the market by a vote of 245 to 39 with the All Stars in agreement 65 to 9. The Wall Street column its Fool follows have been positive also by 10 to 1.

    Is this the right time to buy? Let's look to Barchart for the technical price evaluation. Barchart has a buy signal on all 13 of its technical indicators for a 100% buy signal. The stock is presently trading above its 20, 50 and 100 day moving average and hit 7 new highs in the last 20 trading sessions. The stock has enjoyed an 8.08% price increase in the last month and presently trades at 28.68 with a 50 day moving average of 26.80.

    VeriSign (VSRN ) meets my criteria for a buy:
    • Wall Street analysts have buy recommendations released with increases in sales and double digit increases in earnings projected
    • There is a positive investor sentiment
    • The stock is presently enjoying positive price momentum and has a 100% Barchart technical buy signal

    Jim Van Meerten is an investor who blogs on investing on Financial Tides and

    Barchart Portfolio blogs. Please leave a comment below or email JimVanMeerten@gmail.com.

    Disclosure: No positions in VRSN at the time of publication

     


    Disclosure: No positions at the time of publication
    Themes: long idea, Internet Stocks: VRSN
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