Now with the inversion of the yield curve, markets are becoming more sure of an impending recession, and as a consequence, there's a flight to value. Finding that extraordinary bargain may be hard these days, but there will always be some special-situation issues that are overlooked. One such bargain, in our humble opinion, is Deluxe Corporation (NYSE:DLX). Once a provider of checks and forms, it is now repositioning as a provider of web and online marketing services targeted at small businesses and financial services. Although the repositioning was driven by an acquisition strategy of questionable success, write-downs on which have been a transient headwind for earnings, it nonetheless leaves Deluxe gaining more than 30% of their revenue from marketing solutions and web services alone. With their presence in these markets, I believe that they stand to benefit from the incoming sole proprietor and online business revolution, which given their valuation makes them a great GARP investment.
Drop-shipping and the Entrepreneurial Revolution
As jobs are becoming disrupted and the US public, leveraged with student and car loans, seek to make money wherever they can in an increasingly gig-oriented economy, the value of risky, personal entrepreneurial initiatives has gone up. While before, small businesses and sole proprietorships selling niche products or services found it difficult to economise on customer acquisition, now with the possibility of small incremental expenditures on digital marketing ad campaigns supported by social media platforms like Facebook (FB), a business of any size can effectively generate leads in a manageable quantity.
According to the various gurus in the digital marketing space, getting a positive spread between lifetime value (LTV) of a customer and customer acquisition costs (CAC) only really takes a reasonably crafted product and a good understanding of the people in your niche market. Indeed, the success in generating a positive ROI on advertising dollars
