Velti plc (NASDAQ:VELT)

CAPS Rating: 3 out of 5


Player Avatar ScalaAnalyst (21.47) Submitted: 11/7/2012 1:29:21 PM : Outperform Start Price: $4.88 VELT Score: -25.43

Here is a company that has a unique product in a unique industry. Against their competitors they have a very large market share. So, who are these guys? Well, they engage in mobile marketing. So all those people that have iPhone or iPad or similar equipment are receiving advertising to visit local markets in the area that they are in. I do a lot of numerical historical analysis on my stocks and, to be honest, it only gives me a clear hindsight view. I don't believe historical analysis can predict the future, but I believe it can 'hedge' my bet. So, I try to look for what I call the fifth element. This is where stock analysis steps away from the numbers and takes a look at the business model. I try to find companies that have a product that not many others have. Perhaps they sell a product that is their unique innovation that the remaining competition has overlooked. It is like seeing how leds will shape the future of lighting. Sure, they are small, they use less power, they are very reliable and can be massed produced inexpensively. Now a days, they are everywhere, in cars, traffic signals, flashlights, every kind of electrical device and they, along with CFC lighting, will overtaking the simple light bulb. I believe that hand held or pad type electronics that connect everyone to the internet will overtake the printed word. Look how connected we are. Twitter, Facebook and other social media is how news travels. This company has some room to grow. It will continue to grow as long as people keep buying these devices. I believe that we will have all the data in your wallet transferred to your iPhone, iPad, razor, droid or whatever you have. When you are interested in finding a new restaurant, do you go to one of your yellow books, or check social media and Google? My point exactly. These guys track their advertizing and lean on what works for the product. They are an agile company, changing as the market changes. Now onto the historical analysis. Their PEG ratio is quite favorable, They are a small company with a market cap of 421.67M. Just the right size to easily double. Insiders hold 11% so people at the helm are working to steer this company away from impeding storms and seek a clear route to the profitable horizon. With the changes in the value of the dollar, the price to book is looking really good. Also the debt to equity ratio is real nice, which makes it appealing for a larger suitor. I'm talking a potential buy out offer may be presented in the near future. Another strong indicator is that their EPS growth ratio against other companies in their industry is real favorable.

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