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.
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 It has developed and acquired systems for digitizing handwritten historical documents, and has relationships with national, state and local government archives, historical societies, religious institutions and private collectors of historical content worldwide.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.
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.
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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.
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