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Little known spin off that's a Cash Flow machine with a strong balance sheet and the potential to attract a Private Equity buyer at a much higher price.
For this stock to be fairly valued at this price, you have to assume that the company will be able to grow earnings at 22% per year for at least the next five years. I don't see that happening, especially in a bad economy. I think that $25 is a more realistic value for this stock.
This spinoff will eventually pop after we get a few quarters of earnings. Lots of FCF and good growth history.
I spoke on Boston radio recently about FTD. http://audio.wrko.com/a/88619572/stock-talk-jim-royal-motley-fool.htm
massive free cash flow. inexpensive. good business model.
FTD is a recent spinoff of United Online. Barron's argues that its earnings are understated as a result of "significant amortization expense stemming from its acquisition by United Online." With strong free cash flow, the company could juice its stock with buybacks or a dividend. Deej
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