ValueClick
We're far past the boom days of the Internet when revenues were growing by multiples instead of single- or double-digit percentages. As competition becomes more fierce and growth is harder to come by, it's important to see consistent sales and improving margins in a maturing business. Three of ValueClick's four business segments had improved margins in the most recent quarter, highlighted by Affiliate Marketing, which improved operating margins to 53.1% from 47.1 % last year. The only group that didn't improve was Owned & Operated Websites, which lost a major customer impacting second-quarter revenue by an estimated $11 million.
Internet trends may also be working in ValueClick's favor. One analyst who just upgraded the stock thinks Google's Instant Search will be a growth driver for ValueClick, saying, "We believe affiliate marketers may experience a surge in traffic and sales."
To top it off, ValueClick has a solid business, improving margins, and a 15.4 price-to-earnings ratio, which is cheap relative to Web developer Digital River's
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