PERI

I’ve mentioned this company a few times before, with minimal interest from most of this board. It may very well fall into the “too hard” category with PN and the like, because it just seems to defy all attempts at valuation. The PE is currently 2.8, which makes you think it’s a coal company or something, expected to shrink for years to come. But actually, revenue grew 46% in the June quarter and is expected to grow over 50% for the September quarter. It is also (non-GAAP only, I must stress) profitable, and that is expected to continue.

Very similar to RUBI, too.

So what’s the deal? Any opinions or questions welcome.

Bear

It’s a shame none of us could answer this riddle back in October. The stock is up from $1.04 to $2.35!

I have no idea why…the CEO left but that’s about the only news. That’s the reason I stopped paying attention to this tiny company – too hard to get information. I still have a ~1% position. Not sure what to do…take the money and run? PE is still only ~6. PS is 0.6.

It’s probably just a value stock now. Despite the ~40% growth in 2016, it’s not forecast to grow much this year. Still with GAAP EPS now, as long as they keep coming I could see more share appreciation. Where she stops, nobody knows?

First world problems.

Bear

What does the company do, Bear?

Matt
Just curious

What does the company do, Bear?

Matt
Just curious

Advertising. Digital ads. They used to do something with mobile search (honestly I don’t even remember) and then that market started drying up / dying. So they made this huge series of acquisitions. Undertone was I believe the biggest. It’s actually like a digital ad agency that creates content, at least from what I can tell. Codefuel is another acquisition – it measures engagement and monetization, I believe.

Anyway, as you can tell my interest level in this company is really low, and if they have a secret sauce I don’t know what it is.

As for the share price doubling, my theory is that when they made the acquisitions, it cast serious doubt on the viability of their business. They were undertaking a major turn-around. Maybe their last quarter or two of decent results is slowly starting to convince the market that they can find a niche.

I think they could easily double from here without too much growth (is a PE of 12 really that hard to fathom for even a boring company?), but I also think it’s not something I’m ever going to feel comfortable with. I could continue to let it ride, but I have some things I want to buy right now…

…so I sold PERI.

Bear

1 Like

I love it - yeh boring digital company that just doubled over night. Scared to think what gets you excited!
Ant
:wink: