Why ICG Group Inc. Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of ICG Group (NASDAQ: ICGE  ) finished Thursday with a 6% gain after topping out at a gain of more than 11% in early trading. The company reported stronger-than-expected results for its fiscal first quarter before the opening bell.

So what: ICG's quarterly revenue grew 53% year over year, to hit $18.4 million, ahead of Wall Street's $17.8 million consensus, and its loss of $0.10 per share was narrower than the $0.13 loss analysts had expected. During their earnings call, company executives also reiterated their full-year guidance, which calls for a range of $78 million and $80 million in revenue, and a loss of anywhere from $0.36 to $0.41 per share for 2014. Both ranges are a shade better than Wall Street's estimate, which had pegged ICG's full-year revenue at $78.9 million and its loss at $0.40 per share.

Now what: ICG is a very unusual company that can't be properly assessed in the same way one would assess most other companies. It's never booked an operating profit, and yet it remains enormously profitable on a net basis because of a complex business model that would probably require a separate article to adequately explain to anyone who's never encountered it before. According to ICG's annual report, annual "revenue" has only exceeded reported GAAP net income once since 2009, which makes assessing its real opportunities on the basis of its guidance a bit silly. However, ICG's earnings call did reveal that its core products are all growing their top lines at strong double-digit rates, which is certainly worth some optimism. ICG's shares have nearly doubled during the past year, and have quadrupled in the past five years, so its management must be doing something right.

Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play," and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2940347, ~/Articles/ArticleHandler.aspx, 7/22/2014 4:37:53 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement