TPS Position Update – November 4, 2015
. . . . Inuvo, Inc. (AMEX: $INUV) – Hold
We were pleased to see the digital advertising technology company report strong Q3 results a few weeks ago.
Revenues were $19.3 million, up from $13.0 million the same quarter last year.
The 48% increase in revenue came with a 45% increase in net income for the first nine months of 2015 compared to 2014.
What lies ahead?
With $3.6 million in bank debt paid off, the company is in good financial shape to invest in technology and people.
There is fierce competition in the digital advertising space. Inuvo will need to make sure it is not viewed by advertisers as a commodity. If it is able to differentiate its services, and advertisers see a quantifiable benefit, the firm will be in a position to renew agreements, grow client budgets, and increase revenues.
The stock has been doing well, although it is off a June 19th high of $3.45. We recommended Inuvo in October, 2014, at $1.43.
. . . . Goldfield (NASD: $GV) – Hold
Goldfield isn’t the first company to go to its bank, renegotiate a loan, ask for more time to pay off the loan, and pay a higher interest rate.
That’s what happened in September when Goldfield renegotiated its working capital loan with Branch Banking and Trust Company.
The company has also extended a stock repurchase plan. This too is not unusual.
But neither event is good. Both underscore the problems the Melbourne, FL company has been experiencing.
Goldfield is a construction company. Its clients are electric utilities and industrial firms.
It builds and maintains electric utility facilities and works on transmission lines, distribution systems, and substations.
Bad weather is never good for business, and this year the weather, especially in Texas where Goldfield works on major projects, has taken its toll.
The stock has been trading in a narrow channel for the past few months between $1.65 and $1.90. We recommended the stock in April, 2015, at $1.67.
We would like to see a weather forecast with sunshine and calm winds, so Goldfield can make up lost ground.
Action To Take
- Hold Inuvo, Inc. (AMEX: $INUV)
- Hold Goldfield (NASD: $GV)
Category: TPS Update
