Yesterday was the first day of Synacor (SYNC)'s huge rally back to $10-$11 pre-3Q results and $12.96-$15 the day after 3Q results, in NIA's opinion. SYNC finished yesterday up an impressive $0.16 to $7.47 on very strong volume of 1,131,900.
Just like NIA predicted Monday morning before the open, SYNC's supply/demand dynamics are now a lot different than the final two weeks of September. In late-September we saw fund managers selling SYNC along with other fund managers delaying their large SYNC share purchases due to window dressing. Now that the 3Q is over and the 4Q is here, SYNC's artificial supply of shares from institutions engaged in window dressing is gone. Furthermore, major institutions that were looking to aggressively accumulate SYNC before 3Q results but were holding off on their large share purchases until after the 3Q, will now purchase their shares beginning this week and continuing for the following two weeks.
A shocking 77% of American adults plan to make online holiday gift purchases in the 4Q, a new all time record! Online holiday shopping sales will reach $54.47 billion in the 4Q, up an incredible 17% from $46.63 billion last year. Huge growth in online holiday shopping this quarter will account for nearly all of America's 2012 holiday shopping sales growth, with brick and mortar holiday shopping sales projected to be only slightly positive year-over-year.
Despite the huge growth we will see this holiday season in online retail sales, the industry is now more competitive than ever and is an unattractive place to invest. While online retailers have lower overhead costs than brick and mortar retailers, at least brick and mortar retailers have people driving and walking past them - giving them free customers who will become repeat customers if they receive great products at fair prices and amazing customer service. Online retailers must invest heavily into online display advertising.
Although total U.S. display ad inventories have been rapidly growing in recent years, Facebook (FB) accounts for most of it. Online retailers who advertise on FB have notoriously complained about not receiving a good return on their marketing dollars spent. One study has found that 80% of ad click-thrus on FB are bots and not real people, which has forced FB to change from click-thru based pricing to an impression based pricing model.
There is huge demand for good quality display ad inventory and Synacor (SYNC) offers the best quality display ad space in the online media industry. After America's top 3 cable TV companies Comcast (CMCSA), Time Warner Cable (TWC), and Cox, SYNC operates the online portals for the majority of the other major U.S. pay-TV and broadband companies. In fact, SYNC operates the online portals for 13 of America's top 25 pay-TV companies! This gives SYNC the largest scale in the industry and a total reach of 23 million people, which equals a 25% market share of all U.S. broadband customers!
SYNC's top three clients are America's 4th largest cable TV company Charter (CHTR), America's third largest telco broadband company Centurylink (CTL), and America's #1 largest telco TV company Verizon Fios (VZ). These 3 huge SYNC clients have a total combined enterprise value of $237.55 BILLION! The online portals that SYNC operates for them receive about 13 million unique visitors per month! Overall, SYNC averages 20 million unique visitors per month and last quarter had a total of 10 BILLION advertising impressions up a whopping 74% year-over-year, making SYNC one of the world's fastest growing online media companies!
While comScore is reporting that SYNC's 4 main portals saw 20% year-over-year growth in unique users last month, they are also reporting that Facebook (FB)'s unique users declined 6%! It is absolutely insane how SYNC's traffic is growing much faster than FB, SYNC's ad impressions are growing much faster than FB, and advertisers are receiving much better results for their display ad dollars on SYNC's portals than FB!
SYNC's 20 million monthly unique users are almost all pay-TV subscribers who can afford to pay $200 per month for pay-TV services, and are a much higher class than FB's average user! Advertisers who failed with FB, are going to have HUGE success this holiday season advertising on SYNC's portals! There is going to be a MAJOR shortage of display ad inventories this 4Q due to the elections, which is why Comcast desperately needed to sign local and regional ad deals with SYNC! Comcast had too much business and not enough display ad inventory, and SYNC will benefit BIG TIME from this in the 4Q, with their RPMs set to skyrocket to record levels!
SYNC's 4Q guidance coming in 3 weeks could SHOCK all of Wall Street!
FB is now trading with an enterprise value/sales ratio of 8.69, which would value SYNC at $37.92 per share, a gain of 390% from SYNC's current share price! In the short-term, NIA expects SYNC to double and finish October at a share price above $15!
NIA is not an investment advisor and is not making any target prices or financial projections. Never invest based on anything NIA says. Always do your own research and make your own investment decisions. NIA never recommends to buy or sell any stock.
Disclaimer: NIA currently owns 486,035 shares of SYNC. NIA intends to sell these shares in the future and can do so at any time. NIA reserves the right to add to its SYNC position at any time.
NIA is not an investment advisor. This email is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This email is meant for informational and educational purposes only and does not provide investment advice.
Additional legal disclaimer information: http://inflation.us/legaldisclaimer.html
| This message was sent to blogotomat@gmail.com from: National Inflation Association | 96 Linwood Plaza #172 | Fort Lee, NJ 07024 | Email Marketing by |
| Unsubscribe | Send To a Friend |
No comments:
Post a Comment