There has been a lot of hype on new media / Internet advertising stocks lately. Of the three main stocks (THNK, DCLK and LEAP), all three companies have nearly identical revenues and revenue growths, yet only THNK and LEAP have begun to show profits. In contrast, DCLK's losses are increasing, yet it closed at 41!
The biggest downside potential for these stocks is all of the hype, leading to "irrational exuberance" with DCLK and the inevitable crash that pulls down the other two. However, if we stay steady based on the facts, we will be able to ride THNK and LEAP to their full potential. I know -- I was one of the first to publicly spot THNK just before it began its run from 11 to 33, and to publicly spot LEAP before it doubled over the last two trading days.
Here are some relevant facts, showing a comparison between the three companies. Based on these comparisons, you decide whether DCKL is a better investment than THNK and LEAP:
THNK
Year Ago Qtr. Revenues: 3.80
Last Qtr. Revenues: 10.1
Annual Revenue Growth: 166% increase
4Q 1996 EPS: -0.19 loss
1Q 1997 EPS: -0.21 loss
2Q 1997 EPS: -0.95 loss
3Q 1997 EPS: 0.05 profit
4Q 1997 EPS: 0.12 profit (most recent)
Current Stock Price: 33 1/4
DCLK
Year Ago Qtr. Revenues: 3.85
Last Qtr. Revenues: 10.9
Annual Revenue Growth: 183
4Q 1996 EPS: -0.15 loss
1Q 1997 EPS: -0.10 loss
2Q 1997 EPS: -0.10 loss
3Q 1997 EPS: -0.20 loss
4Q 1997 EPS: -0.34 loss (most recent -- note declining profits!)
Current Stock Price: 41
LEAP
Year Ago Qtr. Revenues: 3.81
Last Qtr. Revenues: 11.4
Annual Revenue Growth: 199% increase
4Q 1996 EPS: 0.05 profit
1Q 1997 EPS: -0.08 loss
2Q 1997 EPS: -0.11 loss
3Q 1997 EPS: -0.17 loss
4Q 1997 EPS: 0.01 profit (after turnaround from prior losses during three prior quarters)
Current Stock Price: 4 1/4
Notice the nearly identical revenues and revenue growths between the three companies. Despite the similar revenues, DCLK is at 41 on sharply dropping profits, THNK is at 33 1/4 after showing initial profits during the last two quarters, and LEAP is at only 4 1/4 on new profits after a turnaround from earlier losses.
You go figure. Then make your own decisions and stand by the courage of your convictions. However, IGNORE THE HYPE (both positive and negative)! |
