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Although
the Dow managed to stage another rally today, gloom and doom has
definitely settled into the market sentiment. While the overall
valuations in the stock market needed to drop, the panic selling
of the last few days have brought some stocks down to almost
ridiculously cheap prices.
We at
eChristianInvesting
took a look at the internet sector to see which companies have
the strongest balance sheets to ride out this recession and
hopefully emerge with greater market share. We excluded
companies that aren’t currently profitable, as well as any
companies with any significant levels of debt on their balance
sheet. That left four profitable companies who have no debt and
plenty of cash on their balance sheets (compared to their market
capitalization).
The
Street (71% of Market Cap)
The Street
(TSCM) has seen their shares hammered in recent weeks, falling
from $5.99 at the end of September to close at $3.72 today.
That’s a 38% drop in valuation in a little over 2 weeks.
However, TSCM has over $80M on their balance sheet and are
carrying no debt. That’s $2.64 per share in cash! In addition,
the company is profitable with analysts expecting the company to
earn $.27 per share in 2008 and $.32 per share in 2009.
51 Jobs
(63% of Market Cap)
The
Chinese online recruitment company 51 Jobs saw their shares fall
after posting disappointing second quarter results. That led to
analysts slashing their estimates and the share pricing dropping
over 40%. However, 51 Jobs continues to be the market leader in
China and is expected to grow revenues by double digits next
year. That combined with their $152M in cash has this company
poised for a strong rebound.
The
Nine Ltd (78% of Market Cap)
Chinese
gaming company, The Nine Ltd (NCTY), provides one of the safest
bets within the internet sector. Their cash balance of over
$300M represents 78% of their current share price. Meanwhile,
analysts are expecting this company to continue its strong
growth pattern with projections of over 20% profitable growth in
2009.
eHealthInsurance (45% of Market Cap)
eHealthInsurance.com has been one of my favorite companies for a
long time. Unfortunately, their high valuation made their shares
unattractive until recently. The recent market panic has offered
investors a wonderful opportunity to create a position in their
shares. The company has an exceptionally strong balance sheet
with a $136M in cash ($5.43 per share) and no debt. Health
insurance is one of those areas which is considered to be
reasonably recession proof. Analysts are forecasting 19% growth
in revenues next year with the consensus being that individuals
will continue to purchase insurance policies despite the
economy. In fact, high numbers of layoffs may even help this
business as individuals have to look for insurance options
outside of what their companies have traditionally provided.
At the time this article was
published, the author held a financial position in The Street.
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Disclosure Policy |
