I did my sneaky trick (using Chrome) and managed to grab this idea from Seeking Alpha- Summary Perion Network is very undervalued, trading near its net cash level of $400 million, offering significant upside in a business turnaround. Despite recent operational challenges and -70% share selloff, the company runs several units growing at a fast clip. Technical trading indicators suggest a potential price bounce, with targets between $12 and $22 if sales stabilize and cash levels increase. Sentiment has gotten so bad on Wall Street, Perion is now priced at roughly the level of net cash held of $400 million. With an equity market capitalization hovering just below this number, you can now theoretically buy the business and all future profits for FREE. In effect, you are exchanging cash in your brokerage account for cash on Perion's balance sheet when you buy shares. Even more interesting is the enterprise value calculation. The average U.S. equity almost never trades at a "negative" EV number (equity value + all debt - cash holdings), yet this is the third time over twenty years for Perion. I have circled the previous two instances in gold below (late 2008 and late 2013). YCharts - Perion Network, Enterprise Value, Since 2006, Author Reference Points
First Julian Assange... now Stoney. Negative Enterprise Value: Is Wall Street Paying You To Buy Perion Network? Sep. 01, 2024 9:32 AM ETPerion Network Ltd. (PERI) StockMSFT, MSFT:CA5 Comments Paul Franke 24.53K Followers Summary Perion Network is very undervalued, trading near its net cash level of $400 million, offering significant upside in a business turnaround. Despite recent operational challenges and -70% share selloff, the company runs several units growing at a fast clip. Technical trading indicators suggest a potential price bounce, with targets between $12 and $22 if sales stabilize and cash levels increase. Risks include the potential for an expansion in operating losses and/or poor cash management, but the risk-reward setup currently favors bulls. Van accepts Stoney into his stock and option training program. © Getty Images 2021 One of the worst stocks to own over the last 12 months (still earning a profit) traded in the U.S. has been Perion Network Ltd. (NASDAQ:PERI), based in Israel. The company focuses on digital marketing initiatives, alongside other operations matching supply/demand for the online world. Unfortunately for existing shareholders, the company has been bombarded by a number of operating issues, with one unit forced to close and others suffering from a list of reasons. Sentiment has gotten so bad on Wall Street, Perion is now priced at roughly the level of net cash held of $400 million. With an equity market capitalization hovering just below this number, you can now theoretically buy the business and all future profits for FREE. In effect, you are exchanging cash in your brokerage account for cash on Perion's balance sheet when you buy shares. So, depending on how, when, and if the operating business begins to grow again, or what is done with the large cash stash to increase shareholder worth, the quote could quickly reverse higher the remainder of 2024 or languish under $10 over the next 12 months. Since a similar pricing/valuation relationship has occurred two other times over the last 20 years, with one terrific buy opportunity and the other a nothingburger, readers will have to decide for themselves whether buying a position makes sense for their individual portfolio goals and risk tolerances. I personally find enough positives to put a Buy rating on the stock, anticipating some sort of rebound in price to $12 or even $15 could be approaching (good for a sizable percentage gain from $8 presently). With massive sell trading volume and logical excuses to run away from this name, today's existing shareholder base is likely of the very strongest kind. What this means is any good news or better-than-expected operating gains by the company could support a large imbalance of share demand vs. supply. Simple economic theory teaches us if buyers outnumber sellers 2:1 or 3:1, price will have to jump to find new supply for transactions. Let's review some of the pro and con arguments for Perion ownership. The Problem Child Initially, the stock was hit hard by the decision by Microsoft (MSFT) to change how it pays Perion as a function of Bing search revenue. Then, a decision was made to eliminate all identifiable MFAs from searches (clickbait-type websites nicknamed Made For Advertising), which included a unit of Perion accounting for 5% of revenues, according to management. With the bad press and insinuation of shady practices, Perion immediately shut down this unit. You can read more on the situation in an excellent article by analyst Henrik Alex here. Combined with a slowdown in its AdTech business overall, the hit to the company's reputation has led to a large downgrade in guidance by management for the rest of 2024 and 2025, alongside a monster -70% share selloff from August 2023. You can review the disaster for operating performance below during 2024, with little relief expected in 2025 by analysts. Perion Network - Q2 2024 Earnings Presentation Perion Network - Q2 2024 Earnings Presentation Seeking Alpha Table - Perion Network, Analyst Estimates for 2024-25, Made August 30th, 2024 That's not to say the company cannot recover. Several of its divisions for ad-based tracking are growing rapidly in 2024. I have taken some slides from its Q2 2024 Earnings Presentation to illustrate this reality below. Perion Network - Q2 2024 Earnings Presentation Perion Network - Q2 2024 Earnings Presentation Perion Network - Q2 2024 Earnings Presentation Perion Network - Q2 2024 Earnings Presentation The Undervaluation Story Below is a basic chart comparing tangible accounting book value for Perion, against the equity market capitalization, using prevailing stock pricing times outstanding share counts. Notice price has almost always traded above tangible book value, looking back to 2006. YCharts - Perion Network, Equity Market Cap vs. Tangible BV, Since 2006 Even more interesting is the enterprise value calculation. The average U.S. equity almost never trades at a "negative" EV number (equity value + all debt - cash holdings), yet this is the third time over twenty years for Perion. I have circled the previous two instances in gold below (late 2008 and late 2013). YCharts - Perion Network, Enterprise Value, Since 2006, Author Reference Points You can really see the negative EV to EBITDA and Revenue numbers on a log scale from YCharts below. You are essentially buying the company for free if earnings, cash flow, and overall cash levels rise in the future. Typically, negative enterprise value setups are reserved for businesses reporting large income losses, with similar results expected indefinitely. YCharts - Perion Network, EV to Trailing EBITDA & Revenues, Since 2006 How did the company's stock respond after the previous two EV wipeouts below zero? I have charted the outcomes below. The first occurred in late 2008 during the Great Recession. This situation turned out to be a terrific buying opportunity with price rising from $7 to $31 over the following nine months! However, example two in late 2013 didn't work out as well. Prices around $32 would witness a minor jump to $41 months later, followed by price sliding all the way to $16 later in 2014. YCharts - Perion Network, Daily Price Change, Nov 2008 to Dec 2009 YCharts - Perion Network, Daily Price Change, Sept 2013 to Sept 2014 Seeking Alpha's computer-scoring system gives Perion an "A+" Quant Valuation Grade today, largely a function of the ultra-low EV calculation. Bullish price to book value comparisons are also part of SA's equation. Plus, earnings from 6-12 months ago are still being counted vs. a rather bleak immediate income prediction by management. Still, if sales and earnings hold up in 2025, $8 for the share quote could be an amazing bargain in hindsight. Seeking Alpha Table - Perion Network, Quant Valuation Grade, August 30th, 2024 Final Thoughts The bearish trader, short interest position is higher than a few years ago, but 3% of outstanding counts is not an amazing size. There is not a massive short-covering pool to propel the stock well beyond $15 or $20 anytime soon. I will add, I don't believe shorting the stock at $8 near net-cash levels makes any rational sense today. YCharts - Perion Network, Short Interest, 5 Years The trigger for me writing this story revolves around the chart pattern. Perion's price has been trading above its 50-day moving average on-and-off-again for a few weeks. Often this action will encourage buyers to step in and sellers to raise limit-order prices. So, the timing of a bounce off its lows with the potential for sizable retracement of the major losses since February may be close at hand. Other positives include a much lower Average Directional Index and green 20-day Chaikin Money Flow readings over the last month. Both may be signaling the worst of the selling has run its course. In addition, On Balance Volume numbers bottomed in late June (circled in blue below). StockCharts.com - Perion Network, 12 Months of Daily Price & Volume Changes, Author Reference Point What are risks owning Perion with a negative enterprise value? My easy answer is substantial operating losses cannot appear. If the company continues to see sales implode and income turns sharply negative, cash holdings will move into reverse. Management could also do something stupid with the $400 million in cash, like acquire a similar company that is not earning any money. Exchanging $20+ million in cash investment yield annually for something worse would encourage me to sell any future Perion position and run for the hills. In terms of technical upside targets, I am thinking a refill of the price gaps around $12 and then $14-22 are possibilities, given sales stabilize and the company can build cash levels from here. Rebounding to $16-17 would generate a rough double on your investment capital (+100%), when purchasing shares around $8. And, if things don't turn around in 2025, slow cash burn should allow investors to get out with $5 or $6 per share. As a consequence, I feel the risk/reward equation is tilted in favor of bulls. I rate Perion Network shares a Buy, and will try to add a stake next week to my diversified portfolio. If quick trading profits appear before the end of the year, I will likely take some if not all of money off the table in this name. Thanks for reading. Please consider this article a first step in your due diligence process. Consulting with a registered and experienced investment advisor is recommended before making any trade.
Nice grab Vz- You got more of the article than me! IFF just upgraded at Mizuho, » 05:08 IFF-: GM all. I have been thinking more and more about AI and I have a new take--~~~ The first new take I gave you is the unseen; the earnings lift AI is going to give to many many companies... in essence allowing our " E " in PE to grow over the next ten years... That's good./ But there is a huge big rub... I've been trying to get my arms around the issue and the rub is this.. Unlike The Internet which we could all feel and use.. AI is not consumer driven. We are not going to go out and buy new AI. And unfortunately we are not going to pay up for new toys that have AI. So whereas there is a large group of companies that will benefit from employing AI, direct to consumer companies will feel great pain. They will be spending much more and not selling any more. AI: Quite simply the average person on the street does not want it. And that is a stock problem for a great number of stocks.. Apple included... Even Facebook.. investors are going to really hold their feet to the fire-- SHOW US THE MONEY..they will say and there is none. That's a big problem.
I want you guys to hold me to this::: If I do not hit my MLB bets today that's it I'm walking away from the table. I have entered one of my cold streaks... This has to end RIGHT NOW today!
It's unusually cold in Ct.- This sucks. I don't want to feel this now. Ayyyyy. No I am NOT turning on the damn boiler! I had that problem again with the Benz the hair in the muffler. I've been blogging these stocks for so long at ET some of my "Great Events" are starting to repeat!! This happened once before, hair like from an animal or a drag queen starts coming out of the muffler and you pull and pull and pull like a clown trick until you have this huge mound of disgusting hair. Apparently I am the only person in the world this happens to: Or the only person still driving a 91' Benz wagon.
We have that Cathie Wood stk to research Tempus AI-- it turns out to be kind of interesting like Recursion Pharma which she has a ton of, Tempus is AI into medicine which is a good rout to go and to make matters more interesting it's a rather recent IPO we missed...
I have not looked at the futures but my wager (made Fri) is DOWN! That was typical end of QTR BS stocking stuffing we saw late last week...
This stk was Tempus Labs. And nobody cared. They changed their name to Tempus AI.. and everyone cares./ Company Profile Tempus AI, Inc operates as a healthcare technology company. It engages in providing next generation sequencing diagnostics, polymerase chain reaction profiling, molecular genotyping, and other anatomic and molecular pathology testing to healthcare providers, pharmaceutical companies, biotechnology companies, researchers, and other third parties. The company also offers Insights, a license library of linked clinical, molecular, and imaging de-identified data, as well as a suite of analytical services to analytic and cloud-and-compute tools to pharmaceutical and biotechnology companies; and Trials that provides clinical trial matching services to pharmaceutical companies. In addition, it operates Next; Algos, a suite of algorithmic tests in oncology; Hub, a desktop and mobile platform for ordering, managing, and receiving tests and patient results; and Lens, a platform for researchers and scientists to find, access, and analyze Tempus data. The company has a collaboration with united therapeutics to study use of AI to detect patients at risk for pulmonary hypertension. The company was formerly known as Tempus Labs, Inc. and changed its name to Tempus AI, Inc in January 2023. Tempus AI, Inc was incorporated in 2015 and is headquartered in Chicago, Illinois.
SoftBank-backed Tempus AI prices IPO at $37, valuing it above $6B NewsFri, Jun. 14 Ok backed by Softbank.. they will be a big seller at some point. $37 IPO Goes to $24 <-- Where was Cathie then! and makes a run from $25-----> $70 AND WE MISSED IT??????????