NIC, Inc. (NASDAQ:EGOV)

CAPS Rating: 4 out of 5

The Company is a provider of eGovernment services that helps governments use the Internet to reduce costs and provide a higher level of service to businesses and citizens.

Recs

1
Player Avatar KenN513 (< 20) Submitted: 5/18/2008 9:57:34 PM : Underperform Start Price: $6.10 EGOV Score: -167.25

NIC provides internet portals for state and local governments in the US. Their ratios compare favorably with other companies in the internet content industry. For example, NIC's p/e is 38 vs industry average of 70. Earnings growth expectation for the forseeable future is about 12% vs industry average of -0.12%. So, by comparison to their industry, they are well positioned for the intermediate future. Here's the problem: This Industry Stinks. Stinky expectations in a stinky industry still look (almost) ok.
I tend to always go back to the old Fool Ratio: PEG. It asks how much are you willing to pay for future growth? A PEG of less than 1 is considered a value company. This company has a PEG of somewhere around 3. I don't want to own this industry and this company is no exception.
This company came to my attention from a CAPS screener. I chose five star small cap companies with significant insider ownership and unanimous all-star outperforms. See my blog on my CAPS page for other companies from this screener.

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