Super Monkey Portfolio Addition: Shutterfly
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Welcome to the Super Monkey Portfolio, which was created with three simple goals: beat the market, make money, and have fun. Stocks selected for the Super Monkey Portfolio are originated through a random ticker generator. From there, my resident Super Monkey makes his selections based off of a list of qualifying factors and criteria.
Well the good news is the Super Monkey Portfolio is still beating the market, even though one of the holdings, Peabody Energy Corp. (NYSE: BTU), has dropped by over 5% after falling short of analyst expectations in the past 24 hours. With that loss, the Super Monkey Portfolio is still beating the market by almost 2%. In the effort to continue to diversify the portfolio, I would like to welcome Shutterfly, Inc. (NASDAQ: SFLY).
About the Company
Shutterfly is an online based personal publishing service. They provide a variety of personalized photo-based products that make editing, uploading, enhancing, sharing and printing photos simple. Revenue is primarily made by selling professionally bound photo albums and other printable material such as calendars, stationery, greeting cards, etc. Over the past two years, Shutterfly has been active in purchasing two companies which have strengthened its strategic advantage.
Reasons for Consideration
Shutterfly differentiates itself from the traditional photo processing business model by providing a finished, professional product at a fraction of the cost. They have modernized the art of scrapbooking, while providing a personal website that allows the user to share their own memories with loved ones around the world.
Not only is the product offering unique and nicely put together, there are several indicators that suggest this stock is poised for some steady increases. Shutterfly boasts a year over year revenue increase of over 55%, pushing total revenue for the last year to almost $400 million with a 3% profit margin. One of the biggest benefits for Shutterfly is their lack of any debt. This has been particularly beneficial since revenue has been decreased the previous few quarters. Below are some other statistics that were pertinent to the decision to include Shutterfly in the Super Monkey Portfolio.
Current Ratio 3.00
Book Value per Share 16.44
Price to Book 1.41
One concerning factor is that the 52 week change in share price for Shutterfly is -28%. This is most likely reflective of the past few quarter results. However, Shutterfly operates in a heavy cyclical environment with holiday sales helping to drive higher Q4 numbers and I fully expect that the upcoming earnings release to be a positive one for Shutterfly.
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