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The Street
is scheduled to report third quarter 2008 results after the
market closes on Wednesday, October 29. Based on our analysis,
we at
eChristianInvesting are expecting TSCM to report better than
expected top-line results that beat Wall Street’s consensus
expectations.
Analyst
Expectations
We are
forecasting revenues of $19.9 million and EPS of $.07. This
would represent a 24% increase in revenues from last year’s
$16.1 million in the same period. The current analyst consensus
calls for revenues of $19.2 million and $.06 EPS. The company
has provided no guidance.
While The
Street’s business is clearly linked to the capital markets, we
believe that the company will be able to post decent quarterly
results since 45% of revenues come from non-financial
advertisers. In recent quarters, the company has begun to expand
its online presence with MainStreet.com, Promotions.com and
other web properties.
Share
Performance
The
tumultuous market conditions this year have resulted in TSCM’s
shares dropping an excessive 76% to date. In October alone, the
shares have fallen 36%. We believe that the recent sell-off is
due more to the market’s pessimism rather than the underlying
fundamental value of the company. The S&P 500 is also down an
astounding 25% this month.
Valuation
Shares are
trading at a compelling 12x consensus 2009 EPS estimates. This
is a steep discount to the relative valuations of their peer
group. With close to $3 in cash and no debt, we see little
downside risk for this profitable company at the current
valuation levels.
Recommendation:
Buy with a $6 price target.
At the time this article was published, the author owned shares
of The Street.
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