This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Taking Stock Of This Fallen Angel

Our search for stocks under $10 often reveals some familiar but forgotten names, and one that a reader asked us to take a closer look at is CMGI (CMGI). This supply-chain management company captured investors' imaginations in the late 1990s when it aggressively invested venture capital money in Internet companies, catapulting its market value to around $30 billion. But it's been a long fall from grace for valuations in this space, and the once $163 stock now changes hands at just $2.24.

We aren't adding CMGI to the Stocks Under $10 model portfolio because we want to keep the number of stocks in the portfolio at around 16 -- where it is now -- but we believe investors with discretionary money would do well to research this stock for some hidden value.

CMGI boasts three attributes we like to see in a stock in our universe. It has a legitimate revenue stream that, thanks to a recent acquisition, should cross over the $1 billion plateau during the next 12 months. Analysts are ignoring its recent operating improvements, as not one firm has picked up coverage just yet. And finally, the company's venture capital business, while not as highly touted as it once was, could still produce some solid investment returns with market valuations improving.

The company generates most of its sales these days through its SalesLink segment. SalesLink allows companies to better manage their inventory and supply-chain functions, including order management, warehousing, returns processing and logistics optimization. In addition, SalesLink provides marketing technology and advice that enables corporations to fulfill informational requests for customers and prospects quickly and cheaply in order to maximize profit and customer satisfaction.

Its results for the fiscal first quarter, ended in October, are a strong indication that CMGI is on its way to legitimizing itself as a bubble survivor. The company reported sales of $257 million for the period, up 171% from the prior year. The top-line growth was primarily a function of CMGI's acquisition of privately held supply-chain solutions provider Modus Media, which closed in August. Management said when this deal closed that the addition of Modus would turn the company into a $1 billion annual sales company.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs