Wednesday, December 24, 2014

Why Shutterstock Is Poised to Plunge

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, online imagery marketplace operator Shutterstock (NYSE: SSTK  ) has received an alarming one-star ranking.

With that in mind, let's take a closer look at Shutterstock and see what CAPS investors are saying about the stock right now.

Shutterstock facts

Headquarters (founded)

New York (2003)

Market Cap

$1.3 billion

Industry

Publishing

Trailing-12-Month Revenue

$169.6 million

Management

Founder/Chairman/CEO Jonathan Oringer

President/COO Thilo Semmelbauer

Trailing-12-Month Return on Capital

62.7%

Cash/Debt

$102.1 million / $6.0 million

Competitors

Facebook

Google

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 33% of the 12 members who have rated Shutterstock believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, OklaBoston, succinctly summed up the Shutterstock bear case for our community:

High insider ownership indicates this recent IPO has a good chance of staying above book value, but even allowing for that I wouldn't pay more than $7 for it. Current [price-to-book value] is an absurd 18. Can't green thumb that even with the insider support.

While you can certainly make huge gains in exciting young tech stocks, the best investing approach is to choose great companies and stick with them for the long term. The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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