Archive for January, 2014
Things have been relatively quiet for Inuvo over the last month or so, with INUV stock settling into a trading range between $1.30 and $1.50. The fourth quarter has traditionally been one where we expect a slowdown in internet traffic – starting with a big boost due to the holiday shopping rush followed by an enormous drop-off in web usage during the last few weeks of each year. Given that Inuvo’s Alot portfolio has always been heavily dependent on traffic trends (both in their ability to produce revenue and in the company’s ability to acquire new users of its search products), we have no reason to expect that trend to be any different this year. I think much of the slowdown in the trading of Inuvo (and drop off in the price) is likely due to investors pricing in such a slowdown and the expected slow to no growth numbers that would come with it. While the company has remained tight-lipped thus far (no early release of top line production), we would not be shocked if Inuvo delivered a little upside surprise for investors in the form of a a stronger bottom line, perhaps even record earnings. The company appears to be shifting more of its efforts to addressing the exploding market for mobile advertising and we believe at some point the rising tide in that space is going to start showing up in Inuvo’s bottom line. We note that the impact of the company’s mobile pursuits has already started to have a big impact on the company in terms of revenue produced and it appears that the company may be ahead of the curve in terms of monetizaton strategies for its mobile properties. If the company’s mobile revenue grows at the same trajectory we witnessed in the second and third quarter, that increase against a backdrop of Q4 being the first full quarter of expense reduction savings since the move to Arkansas in Q1 may allow for a nice little upside surprise for Inuvo shareholders. If that turns out to be the case, we would not be surprised to see the stock trade to a new 52 week high, which would provide 50%+ upside in just a few months for investors buying in at today’s prices.