Groove Update – RAVE, INUV & Introducing TZOO
RAVE made a terrific run from the price ($8.18) at which we first introduced it to the Groove community. While we were not surprised to see the stock move to new highs ( $13.49) following Shake Shack’s IPO, we are also not surprised to see the stock consolidate and we have been pleased with the levels at which aggressive buyers re-emerge to provide support and additional upside. Longer term, we believe the comparisons will continue to be made between publicly traded fast casual restaurant valuations and what RAVE may be able to achieve with a partial spin-off and IPO of its fast growing PIE5 division. Such comparisons highlight the value disparity we continue to see with RAVE shares and why we believe there remains significant long-term upside regardless of any near term volatility.
Inuvo – Inuvo will be releasing its Q4 and full year earnings report tomorrow. We believe Groove members should be cautious going in to the report due to the difficult Q4 reports from other similarly situated players in the space (like LOCM). We hope that INUV’s moves over the last couple of years to focus their efforts on acquiring higher quality traffic will help to insulate them from some of the issues we saw with LOCM’s report and we will be watching to see if they have been able to grow the bottom line despite the ever shrinking contribution from the legacy ALOT appbar business.
TZOO – last night we added Travelzoo (Nasdaq: TZOO) to the Groove focus list. You can access the due diligence report here – Travelzoo