TPS Position Update – February 3, 2016

| February 3, 2016

TPS Position Update

. . . . Inuvo, Inc. (NYSE: INUV) – Hold 

The Little Rock-based advertising technology and digital publishing company is doing well. 

We recommended Inuvo in October 2014 at $1.43 and now it’s at $2.65.

The high of $3.57 that INUV hit last summer… will we get back to that June price again soon?  We don’t see this right away, but…

Here’s what we do see.  Solid revenue growth.

Inuvo is looking for Q4 revenue to come in between $20-$21 million.  That’s a 35% increase over Q4 2014.

For the full year, the company is forecasting net revenue of $69-$70 million, a 41% increase of approximately 41% compared to 2014.   

“We had a successful fourth quarter driven by strong demand from advertisers during the holiday season,” says Inuvo CEO Richard Howe.

“Revenues for the fourth quarter exceeded expectations and our various advertising delivery and fraud detection platforms have allowed us to provide high quality clicks to our advertising buyers.” 

. . . . McClatchy Company (NYSE: MNI) – Hold 

We recommended McClatchy in August 2015 at $0.96. It went on a nice run and reached a high of $1.60 in November, a 66% return.  Now it’s pulled back to $0.65.

We believe the pullback reflects two factors.

  • The overall downturn in the market.
  • Renewed skepticism about the company’s ability to lighten the financial pressures of publishing daily newspapers.

We remain believers.  There is a new publisher at the company’s Kansas City newspaper, The Kansas City Star.

Digital revenues are growing.  And management is focused on shifting McClatchy from a newspaper publisher to a digital media organization.

“We plan to continue the rapid and innovative transition required of a digital company in an evolving media landscape,” says McClatchy President and CEO Pat Talamantes.

“We are focused on driving non-traditional revenues and concentrating on local advertising customers as larger retailers and national accounts become a smaller portion of our advertising revenues. We expect to continue to reduce legacy costs as we reengineer the way we operate our business. And importantly, our commitment to reducing debt and interest costs remain top priorities.” 

Action To Take

  • Hold Inuvo, Inc. (NYSE: INUV)
  • Hold McClatchy Company (NYSE: MNI)

Category: TPS Update

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