What to make of Ancestry.com

In Depth Analysis for Ancestry.com

When I think of 2011, I think of ancestry.com as being on of those wild rides that if you weren't in it you wish you were. 

Ancestry.com Stock Ticker

The Business:

Ancestry.com, Inc. (Ancestry.com) is an online family history resource. As of December 31, 2011, the Company had over 1.4 million paying subscribers worldwide. The foundation of its service is a collection of billions of historical records that the Company has digitized, indexed and put online over the past 14 years. It has developed and acquired systems for digitizing handwritten historical documents, and has relationships with national, state and local government archives, historical societies, religious institutions and private collectors of historical content worldwide. The Company’s subscribers use its online platform and digital historical record collection to research their family histories, build their family trees, collaborate with other subscribers, upload their own records and publish and share their stories.

Pros:
Subscription based companies such as Ancestry.com or even Netflix have been on fire, with growing subscribers and a growing interest for the companies resources and the stocks. Subscriptions are an excellent source of income and the cost to get the subscription becomes cheaper the longer the subscriber.

Cons:

Data posted from Bloomberg and Nasdaq stated the short interest on Ancestry.com rose 17% as of August 31. This resulted in a 10% pullback in the stock bringing it well below the 50-day moving average and well below the 200-day moving average.

This is the year to date chart with the MACD displaying on the lower of the chart. which is a technical buy/sell indicator. 

Although earnings are increasing as of the 2nd Qtr results when the stock was trading at over $40 per share. The report showed slowing growth of subscriptions and it has been down since.

What to make of Ancestry.com

Even though the stock is down for $40 since the end of July, I still feel the shares are a little to expensive for my taste. If you are worried the shares will increase dramatically and you would have missed the boat if you do like the company buy some out-of-the-money call options. I have this on my radar for a buy at $26, we will see how the trade plays out.

If you have any suggestions on stock picks you would like to see analysed, post a comment with your pick.

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These are brief explanations if you have any questions or would like additional information please contact me directly through the blog. Leave your email and I will try to respond quickly. These are just opinions of mine and you should not use a specific opinion to make an investment. Investors should be aware of the risk involved in making investments.

Can default rescue the euro and stock prices?

Its been sometime since I've come to post, so here it is:

If you haven't picked up a newspaper in about 2 years than you wouldn't know that Europe has dominated the headlines. Countries like Greece, Portugal and Ireland all taking ECB bailouts and speculation of a Greek default growing.

What does this mean for you?

If you are not directly invested in Europe you have probably still felt the contagion, and if you are than you have most likely seen losses on your investments. An organized default may save the euro and boost your stock prices as well.

Lets look at Russia's default in 1998 and Argentina in 2002, both countries after default saw essential company stock prices rise +1,000% as stocks have been brutally hammered and value investors saw the value of the companies in the economy.

Default priced in?

The Athens exchange has lost one third of its value in the last several weeks and other exchanges have seen losses all across the board.

A stock like The National Bank of Greece (NBG) which is trading at pennies on the dollar when looking at current assets and lucrative businesses abroad have priced in a default. If default occurs this is a stock to look at as being a value investment.                                Current market price: $0.78

How can you make money?

Essential companies in these damaged European economies is a great way to pick up some bargain stocks. Companies that the economy simply will no function properly without, banks, telecommunication, utility companies etc. Values of these companies have been wiped away by speculation and fear and reality is these companies are needed to progress further. Imagine waking up without utility companies, banks, cellphones?

"Be fearful when others are greedy and be greedy when others are fearful" - Warren Buffet

Comment and Subscribe/Follow the blog.

These are brief explanations if you have any questions or would like additional information please contact me directly through the blog. Leave your email and I will try to respond quickly. These are just opinions of mine and you should not use a specific opinion to make an investment. Investors should be aware of the risk involved in making investments.