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A Digital River of Cash? (DRIV) 06/22/2005
06/22/2005: It's been quite a while since we profiled a new stock; sometimes it's hard to find anything that looks appealing. However, here's a gem of a company that keeps growing revenues and earnings, has a great product range, and an increasing number of big-name clients. It may not have the revenue or diverse range of product offerings of GSI Commerce, one of its main competitors in the e-Commerce arena, but it does have vastly higher profit margins and appears to be somewhat more nimble.
Digital River "builds and manages online businesses for more than 40,000 software
publishers, manufacturers, distributors and online retailers. Its
multi-channel e-commerce solution, which supports both direct and
indirect sales, is designed to help companies of all sizes maximize
online revenues as well as reduce the costs and risks of running an
e-commerce operation. The company's comprehensive platform offers site
development and hosting, order management, fraud prevention, export
controls, tax management, physical and digital product fulfillment,
multi-lingual customer service, advanced reporting and strategic
marketing services."
Their flagship product is a technology called SoftwarePassport which manages online delivery of downloadable software offerings for DRIV clients.
DRIV Quarterly revenue grew each quarter last year and in the first quarter of 2005. Return on Equity is high. The company has a large cash balance on a per-share basis -- over $9 per share. Cash Flow from Operations and Free Cash Flow are positive. 96% of the shares outstanding are held by Insiders; the beta for this stock is likely to be on the high side making it fairly volatile. In Apirl 2005 the company announced a significantly increased share buyback program of up to $50M, superceding a previous buyback program of up to $5M.
Viewed from many angles, DRIV looks to be a company that is poised to grow significantly further and increase its market share.
Looking at the chart with our technical hat on, a downtrend that was in place from December 2004 to the beginning of May 2005 appears to be ending. However, a close above approximately $34 with would give this rally more conviction and convince the Graham Investor to buy.
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Their flagship product is a technology called SoftwarePassport which manages online delivery of downloadable software offerings for DRIV clients.
DRIV Quarterly revenue grew each quarter last year and in the first quarter of 2005. Return on Equity is high. The company has a large cash balance on a per-share basis -- over $9 per share. Cash Flow from Operations and Free Cash Flow are positive. 96% of the shares outstanding are held by Insiders; the beta for this stock is likely to be on the high side making it fairly volatile. In Apirl 2005 the company announced a significantly increased share buyback program of up to $50M, superceding a previous buyback program of up to $5M.
Viewed from many angles, DRIV looks to be a company that is poised to grow significantly further and increase its market share.
Looking at the chart with our technical hat on, a downtrend that was in place from December 2004 to the beginning of May 2005 appears to be ending. However, a close above approximately $34 with would give this rally more conviction and convince the Graham Investor to buy.