Internet Stock Winners - February 2009

The last trading day of February concludes yet another month of market losses. It’s hard to even remember when the market showed a positive gain for an entire month (last August if anyone can remember back that far).

However, even in this bear market it’s important to remember that there are stocks that are performing quite well. In fact, the internet sector alone produced nine different stocks with double-digit gains in the month of February.

So who were the biggest winners?

Shutterfly

Shutterfly (SFLY: 22.89 +0.04%) ended the month up 21.5% after posting strong than expected fourth quarter results. Revenues of $107.7 million easily topped analyst expectations of $96.7 million. While management did indicate that 2009 could bring possible revenue declines, the market was expecting the outlook to be much worse.

Sohu

Sohu.com (SOHU: 50.86 +1.46%) reported another strong quarter to finish off an impressive 2008. However, investors were most impressed with the company’s first quarter 2009 guidance of 31-36% y/y growth. Sohu shares finished the month up 24.9%.

Priceline

Our third big winner also benefited from better than expected earnings results. Gross booking rose 23% driven by strong domestic demand. The company’s guidance for 2009 also exceeded consensus expectations despite the company’s penchant for providing conservative estimates. The positive news pushed the stock up 26.5% for the month.

Travel Zoo

The biggest winner for the month was Travel Zoo (TZOO: 20.16 +3.60%) – posting an impressive 38.7% gain. Travel Zoo’s long-suffering investors have watched the stock fall from the mid-$90’s to less than $4 per share as the company invested heavily into expanding their business into Europe and Asia-Pacific. However, the company’s fourth quarter performance showed that they are reigning back on their international investments and taking a serious look at their cost structure.