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HistoricalPEGuy (63.43)

WSPI - A Small Cap Value

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February 09, 2008 – Comments (0)

Here's a great example of how the market is just wrong - dead wrong.  This is what gets me excited about investing - especially value investing.

WSPI has done nothing but grow their business and create shareholder value.  Not a perfect company by any stretch, but a great small cap value stock that has gotten caught up in the selling cycle for no reason.

To start, they have proven growth.  Not some fly by the night internet start up or a speculative hopeful.  Just a company with a really simple business model.  They make web pages.  Just like your nephew did for you several years ago.  Difference is, these guys are actually professionals.  Their customers love their service and stick around - for a very long time.  If you are a small business and need web-presence these guys are the only real game in town.  That's it.  A stupifingly simple business model.  And it works.

Its all about customer attrition vs. new sales.  WSPI has continued to show over several years that they know how to grow the business.  First, the wonderful acquisition of Web.com - a really smart move on their part.  According to Zacks - it should show dividends in this fiscal year.  Second, a proven track record of growth.  Its almost scary that a company like this can continually drive revenues on such a consistent basis.

Revenues in the millions:
Q3: 09/2007 17.82
Q2: 06/2007 17.40
Q1: 03/2007 16.42
Q4: 12/2006 16.35
Q3: 09/2006 12.04

EPS:
Q3: 09/2007 0.15
Q2: 06/2007 0.14
Q1: 03/2007 0.12
Q4: 12/2006 0.14
Q3: 09/2006 0.11

Earnings aren't shabby either.  The company continues to show growth in profitability.  I love this stock.  Not because its going to be a 14-bagger.  Not because its flashy.  Because it just knows how to be itself and simply drive value for its shareholders.  Sometimes good things come in small packages.  WSPI, in my opinion, is an absolute no-brainer below $10.  Zacks has it at $15 by years end.

Do I own the stock?  Absolutely.

-- HPEGUY

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