- Impact
- 20
I noticed that Marchex stock (MCHX) has been slammed lately. As of this post, it's trading at $9.49 per share. The price earnings ratio is high. Their Q2 income was 1 cent per share instead of the 11 cents that analysts had expected.
I don't understand the reasoning behind slamming a stock like that. This company is sitting on a money printing machine. They are buying other companies with all the money they print and so investors bail? When they bought Yun Ye's portfolio, it was making $18 million per year on revenue of $20 million. They must have a lot of other goodies because their annual revenue in 2006 was $127 million.
If they decided to stop reinvesting their profits, then money would flow and nearsighted investors would probably love the stock. This kind of company owns some of the best online real estate online and that puts a serious barrier to entry between them and other local search competitors. Forgetting about the cash flow, just think how much their domains are worth in terms of resale value! Their market cap is only around $400 million. They probably own 400 domains worth a million each, not to mention all the other names they own.
So, my question for you is how long do you think they will be on a spending spree and when do you think they will decide to milk their cow and shoot their stock price through the roof?
There is an optimistic volume of March 08 Call options out there in the $10.00 to $15.00 strike price range. You can get March 08 Call options with a $10.00 strike price for $1.20. For example, if you bought $10,000 worth of those and the stock price rose from $9.49 to $12 sometime before March 08, then you'ld turn your $10K into $16K. March 08 isn't too far away though. A three year option would be nice if it existed.
When do you think it will be the right time to pick up this stock? I'm curious to hear your insight.
I don't understand the reasoning behind slamming a stock like that. This company is sitting on a money printing machine. They are buying other companies with all the money they print and so investors bail? When they bought Yun Ye's portfolio, it was making $18 million per year on revenue of $20 million. They must have a lot of other goodies because their annual revenue in 2006 was $127 million.
If they decided to stop reinvesting their profits, then money would flow and nearsighted investors would probably love the stock. This kind of company owns some of the best online real estate online and that puts a serious barrier to entry between them and other local search competitors. Forgetting about the cash flow, just think how much their domains are worth in terms of resale value! Their market cap is only around $400 million. They probably own 400 domains worth a million each, not to mention all the other names they own.
So, my question for you is how long do you think they will be on a spending spree and when do you think they will decide to milk their cow and shoot their stock price through the roof?
There is an optimistic volume of March 08 Call options out there in the $10.00 to $15.00 strike price range. You can get March 08 Call options with a $10.00 strike price for $1.20. For example, if you bought $10,000 worth of those and the stock price rose from $9.49 to $12 sometime before March 08, then you'ld turn your $10K into $16K. March 08 isn't too far away though. A three year option would be nice if it existed.
When do you think it will be the right time to pick up this stock? I'm curious to hear your insight.
