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3 Internet Companies With Troubling Sales Trends January 9, 2013

Posted by Ishmael Chibvuri in Latest Articles!!!.
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Do you consider a stock’s sales trends when choosing among names? We ran a screen with this idea in mind.

We screened the Internet sphere for stocks with weak sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables, the healthier the company’s revenue.

We screened for stocks seeing slower growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a larger portion of current assets over the same-time period.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Do you think these stocks are in hot water? Use this list as a starting point for your own analysis.

1. Akamai Technologies, Inc. (AKAM): Provides services for accelerating and improving the delivery of content and applications over the Internet in the United States and internationally. Market cap at $7.27B, most recent closing price at $39.98. Revenue grew by 22.51% during the most recent quarter ($345.32M vs. $281.86M y/y). Accounts receivable grew by 29.33% during the same-time period ($236.23M vs. $182.66M y/y). Receivables, as a percentage of current assets, increased from 19.76% to 31.34% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

2. CGI Group, Inc. (GIB): Provides information technology services (IT) and business process services in Canada, the United States, India, Europe, and the Asia-Pacific. Market cap at $6.36B, most recent closing price at $23.16. Revenue grew by 60.06% during the most recent quarter ($1,609.66M vs. $1,005.67M y/y). Accounts receivable grew by 197.29% during the same-time period ($1,470.8M vs. $494.74M y/y). Receivables, as a percentage of current assets, increased from 35.85% to 52.72% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

3. Sina Corp. (SINA): Provides online media and mobile value-added services (MVAS) in the People’s Republic of China. Market cap at $3.52B, most recent closing price at $52.39. Revenue grew by 16.95% during the most recent quarter ($152.38M vs. $130.29M y/y). Accounts receivable grew by 30.88% during the same-time period ($144.96M vs. $110.76M y/y). Receivables, as a percentage of current assets, increased from 12.44% to 16.27% during the most recent quarter (comparing 3 months ending 2012-09-30 to 3 months ending 2011-09-30).

Retrieved From: http://seekingalpha.com/article/1097821-3-internet-companies-with-troubling-sales-trends?source=email_investing_ideas&ifp=0

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