Internet Brands, Inc. is an Internet media company that builds, acquires, and enhances branded Websites. Its Websites are focused on facilitating the research of high-value or specialty products, enabling it to sells targeted advertising. Now own over 69 web sites that bring in over 100,000 visitors/month and attract more than 32 million visitors per month across their properties
Strong Acquisition Pipeline
- spending about 25 million per quarter
- Acquire Websites at Great Rates
- On a tear. Buying properties constantly.
- In fact, with the soft environment, sellers may be more motivated to do deals
Loss of some revenues
- mortgage and auto vertical related
- Replaced with other revenues
Concerned about costs rising with revenues
- Cost attributed to Acquisitions
- But that doesn’t seem to be the case
- Cost is mainly due to personnel both selling and technical
- hopefully Cost Efficiencies
Conclusion
- hold for now. Watch for cost efficiencies
Links - Documents read in preparation for this video:
Orbital Sciences (NYSE: ORB) is a space contractor founded in 1982 with a focus on building smaller and more affordable satellites and launch vehicles, with projects in communications, defense systems, scientific research. All of these market segments are trending upwards.
This is a growth stock. Orbital is aiming for 10% growth rate for the next 3-5 years. The company is maintaining its focus on the smaller, growing niches which are underserved by the major aerospace companies. Orbital seeks to continue providing highly-reliable space systems on fast schedules at affordable prices.
Orbital is an R&D stock, at its core. A strong R&D stock with some age will show a gradient of segments, ranging from mature segments which make steady money at a nice margin to fledgling segments which are just emerging with low profit margins but excellent long-term growth. Orbital looks to have legs on this point. Let’s examine their segments:
3 Core Segments
Launch Vehicles
These are literally the rockets that get various systems into space, whether it’s a satellite or a missile. This is the original business Orbital was set up for in the early 1980s, and over 500 launch vehicles have been produced to date. About 177 more of them are under contract, currently. Launch systems represent the mature segment of Orbital’s resources, where they hold a majority share of the market with profit margins at 10%+ and an expected growth of about 10% per year through 2010.
Satellites
Orbital has a strong share of the satellite market, with 145 satellites delivered since ‘82, and 28 more currently contracted. Despite Orbital’s strong position here, the satellite market is not as lucrative, with revenue growth projected at 5-7% and profit margins in the 8-9% range. However, Orbital is the dominant player in the small communications satellite market, with 55% of the segment.
Advanced Space Programs
This is the bleeding edge of R&D for Orbital. In the past 10 years, they have worked on “8 Major Advanced Space Products” which are adjacent to the core offerings. Just last year this segment was spun out into its own group, and with good reason. Its margins are currently only around 6%, but the growth potential looks to be something like 20-25% per year through 2010, and I see no reason why it would stop there.
Some Financial Info
Orbital maintains a high revenue visibility due to a $3.4B contract backlog, which is already 60% of revenue coverage between 2008 and 2010!
Orbital was recently awarded a DoD contract for $100M over the next 10 years, and they also announced earlier this month that they would be manufacturing the Koreasat 6 Communications Satellite for KT Corporation in the Republic of Korea.
Most of the information in this post is derived from the ORB presentation at FBR given on May 28th.
Josh presents Rick’s Cabaret International, Inc. (NASDAQ:RICK) for purchase as the Hot Stock for June 2008. Rick’s operates upscale gentlemens clubs throughout major cities in the US. Their current aggressive acquisition methods and organic growth places them at the forefront of their industry. They are poised to see their business, and stock price, grow.
Apple, Inc. designs, manufactures, and markets personal computers, portable digital music players, and mobile communication devices and sells a variety of related software, services, peripherals, and networking solutions. Apple has a checkered past in Ben-Hur lore as it has been suggested, and rejected, as a buy several times. However, a dip in the market afforded an opportunity to secure the stock at a value. Apple has harnessed an increasing amount of market share over the past several years on account of its top of the line selection of MacBook laptops, iPod digital music players, and the iPhone. Additionally, their stable operating system allows compatibility with Microsoft Windows and Office applications like never before – undoubtedly another reason for the increase in market share. The club sees a lot of promise in this growth stock. Apple looks to continue to be a force in the market for some time as they offer improvement with each generation of their products.
Total System Services is a payment processing company Ben Hur chose as an international growth investment. Their business model is to process payments, a task which they do very well as they were the first in this market and a handful of their clients in the past have unsuccessfully tried processing in house just to re outsource to Total System Services. Internationally they own over 40% of a similar company in China which controls its processing market their. In addition they are making progress in the UK by making London the international headquarters for expansion with new offices in India, Germany and the Netherlands. The plan is to be a part of their international growth which should result in a diverse base for healthier earnings.
NETC is the leading Brazilian cable & broad band provider. Currently Brazil’s population % of people using cable and the internet is much smaller then in other developed markets like the US, Japan and Europe. Ultimately Ben Hur feels the standard of living increase especially in the Brazil’s middle class will tend towards narrowing the gap. As time goes on we expect the % of Brazil’s citizens using cable and or broadband to potentially double in the next five years. This growth play is long term and should be revisited once a year to track the progress Brazil’s population is making with these markets. We are looking for population of about 60% users.
Ben-Hur Investments