CHATROOM

The Only $2B Company I’ll Ever Recommend Buying

October 26, 2007 at 9:58 pm
by Timothy Sykes

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Stop the presses! Every traditional printer’s worst nightmare, online printing service provider, VistaPrint (Nasdaq: VPRT), just broke out to a new all-time high to $46.05 on great earnings Friday. The highlights include quarterly revenue growth of 59% year over year ($79.5 million vs. $50 million), 64% booking came from repeat customers, nearly 1 million first-time customers in the quarter and non-US business represented 34%of sales and increased 77% year over year.

This is an international printing powerhouse and for all the bitching and whining that the people who control the 9.21 million shares short (nearly 1/4 of the float) do about valuation (trailing PE is 77), the stock just executed a perfect 10-month chart breakout. You guys know I love charts and this one’s a stunner.

vprt.png

Hmmm, shorts, ever think about using a forward PE since this company is clearly moving more forward in a big way? If you did, you’d find a forward PE of 29, not too shabby for a company expected to grow 36% over the next 5 years and whose earnings estimates have been rising steadily. You know, with this latest earnings blowout, I’m going to up the earnings estimates for next year from $1.59 to $1.75/share (just cuz I feel like it)–now the stock is trading at 26x next year’s earnings. Uh oh shorts, and then there’s this:

A SmartMoney.com article from October 16 goes into a long tirade of VPRT’s business details, but one sentence managed to stick in my mind:

“The company’s proprietary technology allows it to receive thousands of print jobs every day and process them in a more cost-efficient way than traditional printing shops.”

Wow, that’s really what it all boils down to and why this stock is headed higher.

UPDATE: I just used VistaPrint to order business cards–after my design was complete, they tried to upsell me on everything from t-shirts and magnets to mailing labels and buttons, all for just a few dollars more. I have to admit, I was tempted to pull the trigger, but my frugal ways wouldn’t let me. Still, I respect their business even more now.

Disclosure: Timothy Sykes has no position although he probably will take one in the near future.

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  • http://nicholaspepera.com BRICKHOUSE

    Tim,

    I heard you loud and clear on Friday about IDAE! Great Livestock btw! I bought some and held over the weekend as well so lets hope this sucker really spikes!!!

    Thanks!

  • kelvin

    no email alert this morning ?

  • http://www.test.timothysykes.com timothysykes

    u shouldve gotten it?

  • kelvin

    yeah… thanks

  • beinggreat

    I’m holding 300 shares IDAE I bought on Friday @ 2.35

  • Reaper

    I’m actually long SOAP. It is trading at like 70% of its net cash, making it a nice long-term play for this sissy value investor. I did sell a bit on the spike and would sell more on another spike, but I don’t think this has much room to drop and I would not short it unless it goes way higher.

  • PCola

    So Tim, you saying you want to hold it until Tuesday or Wednesday, and that it could hit $3 or even $4, means you’ll be selling right at the open for 2.45ish, doesn’t it? :D

  • Oracle of NYC

    1,200 shares of IDAE just sold in pre-market @ $2.50. This thing is going up!

  • Dwess

    qmnm released some fluff bs this morning, keep an eye on it..great pick on idae Tim!!its makin me some $$!

  • chas

    I didn’t get the email either – chasdabigone at gmail dot com

  • chas

    or chas at tamu dot edu
    not sure which one i registered

  • tradertomcat

    XING up 28% whadda think Timay !

  • be-the-ball

    tim,

    why don’t you ever do partial sales. Sell some and let the rest ride. no harm in that?

  • http://www.test.timothysykes.com timothysykes

    BTB, i usually scale in and out of my positions but i’ve had to change my strategy since my tiny account cant handle too much trading commissions/trades…u’ll see when i’m at 50k-100k, everything changes…for now i just gotta continue taking $200, $300 and $600 gains

  • PCola

    Ha, I called it. Was off by a few pennies though… :P

    “So Tim, you saying you want to hold it until Tuesday or Wednesday, and that it could hit $3 or even $4, means you

  • be-the-ball

    it was a nice trade, regardless, sorry i didn’t take it with you…

  • Brent Lear

    tim, you already out of IDAE?

  • Reaper

    Got out of IDAE. Tiny position, I closed some on Friday too. Total profit of $165. I like shorting these no-business hype companies, not longing them.

    PCola – I usually bidwhack / askwhack when trading OTC (and I do it a lot more than Tim). Prices can collapse or climb so fast I don’t worry about a 1% to 2% hit. For example, I just bidwhacked IDAE @ $2.47, but I ogt out and now it is at $2.35/$2.36.

  • Oracle of NYC

    I made about $220 on IDAE after fees and commissions in my wife’s IRA account. I’ll take it any day.

  • PCola

    That’s fine reaper, you are free to bidwhack, but eventually you will see that you’re better off putting in your order for the price you want to get out and let it hit there. Bidwhacking is letting immediate emotions rule your trades, instead of having a plan. It’s back up to 2.49 already.

  • PCola

    Is theer a way to edit old posts? My reply to reaper came off stronger than I intended.

    Basically my point is that psychologically, if you put in an order to sell at 2.47 when it’s trading at 2.40 and it goes up to 2.60, you’re content with your trade because you knew you’d be happy to get out at 2.47, but if it goes up to 2.55 and then starts to drop and you bidwhack at 2.47 and then it goes back to 2.60, you’d most likely be more upset because you got “shaken out”.

    Anyway, that’s just my opinion based on experience.

  • PCola

    By the way, I just sold my 5K shares at 2.44 and 2.45 , and may buy back in if it drops back into the low 2.30s when Tim posts his exit on the free board.

    Tim, for your records I pulled in $777 before commission

  • Brent Lear

    out with 115.98 net

  • http://www.test.timothysykes.com timothysykes

    aweosme guys keep posting–here’s my latest alert in case u didnt get the email somehow:

    http://www.timalerts.com/2008/07/14/sold-all-idae-at-249-10-profit/

  • Reaper

    Don’t worry PCola, I didn’t take it personally. Perhaps you are right with your psychological point, but when I decide to get out, particularly with a play I am not enamored with like IDAE, I am willing to pay 1% on the spread to get a quick fill. I think that is a separate issue from when to get out (such as deciding to hold on while it bounces back after the first wave of TimAlerts people sell following Tim). In my experience, trying to get the absolute best fill often keeps me out of a play or keeps me from closing a play until too late.

    By now I am pretty immune to worrying if I miss the top … my timing is generally crap, but I still make money.

  • beinggreat

    Seems a little odd that people are strategizing their timing with TIM Alerts. I realize we get the info 1st. I guess as a rookie this fell in the realm of I didn’t know I didn’t know. At least now it’s in the realm of I know I don’t know so I can find out. Just learning not complaining.

  • http://www.test.timothysykes.com timothysykes

    always gonna be time lags with any alert service, thats why when i pick a stock, i make sure the setup is good enough for multiple days, not just intraday scalps…still think IDAE will go over $3, but i dont have the capital to sit around and wait…for now

  • beinggreat

    still in 300@2.35. Seems like there is livelier conversation going on with the test.timothysykes.com site. I’m enjoying watching both and getting the hang of it.