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TheStreet Open House

Constant Contact Delivers Profits at a Bargain Price

NEW YORK (TheStreet) -- Instead of being last on the train to buy Twitter (TWTR) Facebook (FB) and LinkedIn (LNKD), you may want to consider another social media company with explosive growth and a valuation to justify its price.

Email marketing provider Constant Contact (CTCT) is filling shareholders' inbox with cash.


CTCT Revenue (Quarterly) Chart

Constant Contact is a leader in the email space whose shares, at $28, are up near 124% for the past 52 weeks. Unless you haven't received an email since Y2K was a concern, you've received an email through this company's system. Constant Contact is expected to report May 1 but shareholders received the best email surprise Tuesday when the company released a preliminary first-quarter indicating faster growth than investors predicted.

According to the company's press release, in the first quarter the revenue range is now $78.7 million to $78.8, a 15% increase above previous guidance. CEO Gail Goodman stated the company is growing its customer base, average revenue per user and customer retention numbers.

If you ever trekked to the mall area during the afternoon of Black Friday, you know what a challenge it is to find value after previous shoppers have already picked the deals clean. It's the same feeling I have when examining many of the social media stocks. The momentum plays are falling to reality and others don't appear to have a long runway for growth.

Where's the edge buying yesterday's hottest stock? Investors willing to look at rapidly growing companies (but ones that are not so large the economies of scale are an impediment) can probably make a lot more money than buying what everyone else has already bought.

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