GrooveVC Portfolio Update – Inuvo, Rave & Travelzoo
1)Inuvo has been picked up by Zacks with an Outperform rating and a $2.30 price target. We believe this could be a big deal because it is the first national firm to pick up coverage of Inuvo in its history (previous analyst coverage has been by smaller, regional firms) and this is the highest price target in years. We have seen an immediate uptick the volume traded since the Zacks report was released and we will be surprised if we do not see the follow through take us to a higher trading range for Inuvo.
2) Rave shares continue to show strength as each selloff related to articles attempting to paint Rave as overvalued are met by heavy buying in the $11 range. With the turnaround at Pizza Inn (6% same store sales growth and what appears to be the continuation of that trend), Pie Five’s extraordinary store level economics (17% same store sales growth) and the openings of a new franchise or company owned store almost weekly, the Pie Five growth story gets better and better. As more investors are exposed to the opportunity in the fast casual pizza space, we believe more will begin to see Pie Five as one of the likely winners in the race to the top of the space and the resulting demand for shares will continue to push RAVE to new 52 week highs.
3) Travelzoo share continue to show strength and seem to have found a new trading range around $10 per share. We are aware of new institutional buyers as well as new attempts by institutional buyers to make contact with Travelzoo management, to no avail. Travelzoo management has not made any kind of public announcement in a very long time now and the silence is deafening.