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$17.40 0.07 (0.40%)
9/5/2008 4:00 PM

IAC/InterActiveCorp. (IACID)

CAPS Rating:
****

The Company operates and diversified businesses in sectors being transformed by the Internet, online and offline its mission is to harness the power of interactivity to make daily life easier and more productive for people all over the world.

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Avatar weiwentg (90.37) Submitted: 1/16/07 9:34 AM : Outperform Start Price: $37.18 IACID Score: -42.90

IACI is one of my virtual winners in CAPS, but as I write this the stock price is around $37 and there isn't enough of a margin of safety for me to buy the stock in real life. IACI owns many choice Internet properties. Their individual businesses have attractive network effects, and IACI is moving to integrate the businesses, for example by placing an ask.com search box in each of its sites. Their businesses generate a great deal of cash, because they are usually dominant in their individual fields. Lendingtree and Ticketmaster are particularly healthy. This is, incidentally, the same company that spun off Expedia.

However, Lendingtree is a cyclical business that is entering a downturn with the housing market. HSN has suffered from bad merchandising decisions, and Ask.com is going up against Google and Yahoo - at best, an uphill battle. And IACI is a complex entity, struggling to transition from a holding company to an operating company.

I thought there was a good margin of safety when I picked the stock. I'll be sticking with my pick.

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