Inuvo & Remark Media Update
Inuvo – As we discussed in previous updates, Inuvo shares have moved higher and we expect to see it ultimately settle in a higher trading range following initiation of coverage by Zacks. We are pleased to note that as of this morning Inuvo is now trading at a new 52 week high north of $1.80. Despite this increase in the share price, we continue to believe that the shares are undervalued and that the Zacks coverage represents just the beginning of the Inuvo story finally beginning to gain recognition among investors. Beginning tomorrow, Inuvo will enjoy the benefit of gaining the exposure in the financial media that comes when a company’s stock achieves a new 52 week high and this is significant because we believe Inuvo’s performance over the last 18 – 24 months and valuation relative to its peers is a story that will continue to attract new investors. Inuvo’s stock price is moving higher without any new reported developments simply because the Inuvo story is starting to get discovered. This began with the Zacks coverage and the process will only quicken with the stock getting the exposure of hitting new 52 week highs.
The bottom line is that Inuvo is a great little mobile advertising growth stock that is undervalued relative to its growth potential and we fully expect to see the stock continue to trade higher. Inuvo is cheap below $2 and we do not expect that investors will have much longer to buy shares below that level.
Remark Media – Remark’s roomlia division announced a deal with Siteminder today that should allow the company to expand to most major markets in short order. We believe this is significant as the roomlia business has the potential to eventually be the largest revenue engine among Remark’s operating divisions. While investors will likely be focused on the IRS.com, Taxextension.com and Bikini.com businesses in the first half of this year, we will be surprised if roomlia is not on pace to surpass them both in terms of revenue production by Q2 of this year and deals like the one with Siteminder make this outcome even more likely.
Earlier in the month we mentioned our expectation that Remark would go to market to raise capital and for this reason we were less likely to be in a hurry to buy shares. Since that time, the stock has pulled back 20-25%, trading at times near 52 week lows in the $3.50 range before bouncing back to a trading range just over $4. While some weakness would be expected in the scenario where the company may be about to offer stock to raise capital, we believe that sell off is entirely overdone and we view any price below $4.50 to represent an excellent buying opportunity.