Vishesh Kumar
Now may be the time for bargain-hunters to check out IACI/InterActiveCorp(IACI Quote - Cramer on IACI - Stock Picks).
Shares of the Internet conglomerate are down 20% over the last three months, while the broader Nasdaq is off only about 3% during that time. The stock is hanging around 52-week lows because the crisis in the mortgage market has battered the company's LendingTree division, while fears of a consumer slowdown could further hurt the company's struggling Home Shopping Network division. But the selloff may be overdone and could provide savvy investors with a cheap entry price. While investors are correctly wary about IAC's two struggling units, they may be overlooking the potential for growth in its stronger divisions. And recent moves by the company suggest that it's well-positioned to make strong gains in the burgeoning online ad sector. Also, after stalling for the past two quarters, an aggressive stock-repurchase program may kick into full swing soon, further bolstering shares. IAC's online ad division continued to deliver a strong performance in the second quarter of 2007. Revenue in the company's search and media unit came in at $174 million, up 33% year over year and well ahead of the 26% rise in industrywide online advertising in the first quarter of 2007, according to the Internet Advertising Bureau. But IAC may just be gearing up for even bigger gains. The company's widely visited network of Web sites, which includes sites like CitySearch and CollegeHumor, are "underpenetrated" and "undermonetized," based on the amount of views they garner, says Doug Lebda, president and chief operating officer of IAC.
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