| Stock (Symbol) | Stock Price | |
Ancestory.com (ACOM) |
$35 |
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| Data is as of | Expected to Report | Sector |
August 30, 2011 |
Oct 24 |
Technology |
| Sharek’s Take | ||
 Ancestory.com disapointed investors with its earnings report last quarter. Monthly churn (the rate the company losses subscribers) rose to 4.6% last quarter, up from 3.7% 2QtrsAgo and 4.3% in the year-ago period. The cost to add a new subscriber also rose to $81 from $74 in the year-ago period. These little things mean a lot because there’s a lot of sceptics surrounding this stock.On the bright side, thsi management is cutting edge. The company buys back its stock (in chunks) and continues to build its library of records. Ancestory.com has a huge portfolio of records that only they possess, so there are barriers to entry. Still, its tough to believe people will pay $20 a month or $155 a year to subscribe to the website. |
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| One-Year Chart | ||
 Although ACOM dropped after earnings, the stock is climbing again. Profit growth along the bottom looks great and Estimates for the next two quarters are each a solid 46%.ACOM’s P/E is 29. That’s not cheap nor expensive. I think the estimated Long Term Growth Rate of 20% is too low, this company can grow earnings faster than that becasue it buys back its own stock and each new subscriber’s subscription revenue is mainly profit. |
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| Earnings Table | ||
 Sales grew 36% compared to 41% 2QtrsAgo. Ancestory.com’s profits profits jumped 83%.ACOM beat by 3 cents in each of the past two quarters. Last quarter’s was more impressive because the company upped estimates, then beat them. Annual Profit Estimates increased slightly.The estimated annual profit growth is very nice — 59% this year, 27% next year and 31% the year after.Quarterly estimates look amazing. 46% growth is expected the next couple of quarters and that could get beat (looks likw it will). ACOM could continue to grow faster than 50%. |
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| Fair Value | ||
 I’m taking ACOM’s Fair Value down from 40 times earnings to 35 times earnings. Gosh, this company really must haave family tree addicts to keep getting subscription revenue. Upside is still good. |
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| Ten-Year Chart | ||
 Wow, I love the annual profit growth. This is one well oiled machine. I love companies that derive business from the internet. Its so profitable. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
18 of 20 |
I was really thinking of selling ACOM before writing this article. I question the company’s ability to keep charging customers $20 a month for family history. Seems like you would try it for a few months then cancell the subscription. On the otehr hand management is top notch, the company buys back stock and continues to build its portfolio of records. ACOM is ranked 18th of 20 stocks in the Growth Portfolio Power Rankings. I’ll likely hold this stock because I like companies that grow annual profits at rapid rates. ACOM is not in the Aggressive Growth Portfolio but investors in this portfolio who like to live a little could buy this stock here as (1) it just turned higher (1) its undervalued and (2) its growig rapidly. |
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Aggressive Growth Portfolio
N/A |
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