I identified Valueclick (VCLK) a few weeks ago, did a little research, then made a BUY on a stake 2/12/13 at $21.59 on anticipation of a good Q4 FY12 earning report. That report came out today and I viewed it positively. The stock currently sits at a healthy bump of 9.67% as of 07:38 PM ET in extended hours.
Valueclick is an integrated online marketing company. I only plan on holding my stake short term, as for medium and long term growth I seek to focus on intensive R&D technology companies, but the company looks solid and has indications that it could post solid growth and appreciation into FY13 and potentially beyond.
I have made my analysis of VCLK based on a limited set of key factors, which I will now summarize. All data can be found freely available on the internet and citations may be provided (but are not guaranteed) on request. I rank each factor qualitatively on a scale of 1 to 5, 5 being the best, and give notes where appropriate.
1. Business identity (3/5). Notes: I know marketing & advertising are big, important businesses, but I prefer greater technology focus longer term. I am not convinced VCLK provides that opportunity.
2. Earnings (4/5). Notes: Solid margins, solid earnings, good growth and continuing growth projected.
3. P/E valuation (4/5). Notes: Fair valuation, rising now due to growth, but the rate looks acceptable.
4. Management (4.5/5). Notes: My assessment is based on (a) video of ex-CEO James Zarley giving a positive impression, (b) recent CEO appointment of John Giuliani seems like a bullish indicator, (c) see below.
5. Recent earnings call (4/5). Notes: As mentioned, stock is up almost 10% after Q4 F12 earnings call. Reinforced positive impression and positive rating of management.
6. Product quality (3/5). Notes: Their internet domain looks well worked to me, if not particularly impressive. I looked into a few of their ad products, and had a favorable impression, particularly of Investopedia which looks like a smart play to me.
7. Company history (4/5). Notes: Long term presence in online marketing.
8. Chart (2.5/5). Notes: Chart shows some good indicators and some bad ones. Looks very good in the past 9 months and shows good indicators longer term, but took a hit in May on Q1 FY12 earnings adjustment. Absorbed the hit very quickly which I take as a highly negative indication on volatility. I speculate this is partly just due to small trading volumes. Chart showed some resistance on the 1 year gains around 21.60, so if it establishes extended hours gains on 2/14/13, I speculate it should continue rising, barring outside factors.
9. Analyst research (5/5). Notes: I initially found the stock on E-Trade stock screener as only one out of two satisfying parameters (a) NASDAQ, (b) micro-cap or small-cap, (c) positive Thomson Reuters and five stars Standard & Poors. (Thomson Reuters consensus is actually beaten 2.2 to 1.5 by KELYA.) Very strong report from S&P, 12 mo. price target at $27.00 as of last time I checked.
10. Short term prognosis (4/5). Notes: Strong growth expected in the short term into the medium term.
11. Long term prognosis (3/5). Notes: Not enough information to judge.
12. Market factors (4.5/5). Notes: This market is obviously growing. I think advertising is still figuring out how to work best on electronic devices. I like that companies like Google and Facebook have given a bit of luster to this industry. The fact that certain companies (especially Facebook) are still looking to develop their advertising revenue is a strongly favorable market factor for Valueclick.
Comments are welcomed but response is not guaranteed. This assessment is intended to prove useful for future reference and in the benefit of open discussion of investing ideas. No BUY or SELL recommendation should be taken purely from this article alone.