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DM will double or my name isn't Rob

|Includes:Dolan Co (The) (DOLNQ)

Well that seems like a tall order and I am sort of kidding.  DM is Dolan Media.  It is a $262m professional and business services company which is growing 40% in 2009 and 18% in 2010 through a combination of organic and accretive acquisitions.  They have a solid 30% EBITDA margin and generate cash EPS considerably higher than reported EPS given their depreciation and amortization (non cash accounting costs).  
They just recently guided 2010 EPS to $1.54 to $1.60 up from $1.34 in 2009 or 17% growth.  Given their recurring revenue services stream, they are able to provide this kind of visibility to investors, in my view.  Organic growth should atleast stay similar if not accelerate given better economic environment which would be upside to estimates.

The stock, DM, trades at around $10 or 6x 2010 EPS, absurdly low for such a business.  12x 2010 is my double case or $20.  Stocks like this do not stay undiscovered for long either by investors or takeout.

BUY with target of $20 

Disclosure: LONG DM

Stocks: DOLNQ