4-Star Stocks Poised to Pop: ValueClick

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online advertising company ValueClick (Nasdaq: VCLK  ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

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

ValueClick facts

Headquarters (founded)

Westlake Village, Calif. (1998)

Market Cap

$557.13 million

Industry

Internet software and services

TTM Revenue

$675.89 million

Management

CEO Tom Vadnais

CFO John Pitstick

Return on Equity (average last three years)

9.8%

Competitors

Google (Nasdaq: GOOG  ) ,

Yahoo! (Nasdaq: YHOO  )

CAPS members bullish on VCLK also bullish on:

Apple (Nasdaq: AAPL  ) ,

Cisco Systems (Nasdaq: CSCO  )

CAPS members bearish on VCLK also bearish on:

E*Trade Financial (Nasdaq: ETFC  ) ,

Citigroup (NYSE: C  )

Sources: Capital IQ (a division of Standard & Poor's), and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, 571 of the 597 members who have rated ValueClick -- or 96% -- believe the stock will outperform the S&P 500. These Foolish bulls include MintCoin and JPresbrown.

Earlier this month, MintCoin listed a few of the stock's bullish points: "Growth, no debt, very nice cash flow, about 30% undervalued relative to the market. If the object is better returns than the S&P this one should do nicely."

In a pitch from last month, JPresbrown agreed, elaborating on ValueClick's solid financial position and attractive valuation (which is even cheaper today):

This is a rapidly growing company with a pristine balance sheet (no debt, over $1 a share in cash) and positive cash flow. Hammered by market because advertising is economically sensitive, but this is well-reflected in current bargain price (14 [times] earnings and 1.2 [times] sales). May be volatile, especially if market continues down in 4thQ, but should make a great entry point for in the long-term.

What do you think about ValueClick, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Google is a Motley Fool Rule Breakers pick and Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.


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  • Report this Comment On November 12, 2008, at 11:13 AM, GotNick wrote:

    I worked for ValueClick for a few years. It's a mish mosh of companies thrown together without a really good sense of direction. They've bought companies which have dwindled down to nothing Search123 and other companies such as 123InkJets which really has nothing to do with their core businesses.

    A smart buyer would swoop in and buy the company now and spin off the divisions to full unlock shareholder value.

    This is a company that see's pops before earnings and then just slides back down again.

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