Green Dot (GDOT) is another name that saw some stellar performance in 2013; shares of the small-cap financial firm have doubled in the last 12 months. Green Dot sells prepaid Visa (V) and MasterCard (MA) payment cards, which are available at more than 80,000 retail stores across the country. Green Dot also operates a full-fledged bank holding company, Green Dot Bank.
Green Dot's bread and butter is made up of lower-income and lower-credit consumers who have historically operated outside of the country's banking system. By selling prepaid cards, Green Dot provides the convenience of credit or debit card purchases without the regular hurdles. Because GDOT customers can purchase, use and even re-load its cards right at major retail locations, the firm can court customers without easy access to a bank.
Because Green Dot's model is spend-centric (it earns fees when customers use its cards more), sales have grown rapidly in the years since 2008. And profitability has remained consistent on a quarterly basis as well. While GDOT may not look like a value name because of its relatively high P/E ratio, the balance sheet tells a different story: with $565 million in cash and investments and no debt, more than 60% of the firm's current market capitalization is covered by money in the bank.
At the last quarter, VCs owned 2.83 million shares of Green Dot, for a $75.5 million stake in the company.