4-Star Stocks Poised to Pop: Digital River

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Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, e-commerce solutions specialist Digital River (Nasdaq: DRIV) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Digital River's business and see what CAPS investors are saying about the stock right now.

Digital River facts

Headquarters (Founded)	Eden Prairie, Minn. (1994)
Market Cap	$1 billion
Industry	Internet software and services
Trailing-12-Month Revenue	$395 million
Management	Founder/CEO Joel Ronning CFO Thomas Donnelly
Return on Equity (Average, Past 3 Years)	10.3%
Cash/Debt	$411.4 million / $8.8 million
Competitors	IBM (NYSE: IBM) Amazon.com (Nasdaq: AMZN) eBay (Nasdaq: EBAY)
CAPS Members Bullish on DRIV Also Bullish on	Google (Nasdaq: GOOG)
CAPS Members Bearish on DRIV Also Bearish on	UAL (Nasdaq: UAUA)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93.4% of the 317 members who have rated Digital River believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars wooderino and TSIF, both of whom are ranked in the top 10% of our community.

Late last month, Digital River happened to pass wooderino's test for attractiveness: "Showed up on a screen for solid 5 year growth with low debt, cash on hand and still at attractive P/E ratios. The recent sell off makes me nervous but I think it's still fundamentally sound."

In a pitch from two weeks earlier, TSIF dove deeper into Digital River's recent loss:

The 38% plummet of Digital River after announcing that their largest customer does not plan on renewing contacts in 2010, in my opinion, is a little overdone. Symantec (NYSE: SYMC) plans on using an "in-house" ecommerce system. ... At 24% of Digital River's revenue, this will be a blow. ... Digital River has been diversifying its base and growing its sales. I believe that by the time this impacts their bottom line in mid-2010 that Digital River will have made up ground in other areas. ... Margins at plus 15%, a strong cash position and minimal debt. Digital River is far from drowning.

What do you think about Digital River, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!