Webxu Lower P/E Ratio than Industry Peers and a True Value Proposition


Initial Public Offerings and Internet stocks have been the talk of the market over the last year as the stock market is experiencing the next generation of an Internet boom. While most everyone knows about companies such as Zynga (NASDAQ: ZNGA) and Groupon (NYSE: GRPN), the fact remains that plenty of other companies in the Internet space focused on analytics and customer acquisition have performed far better in ROI. BazaarVoice, Inc. (NASDAQ: BV), a company that tracks and analyzes what customers are saying on places like Facebook, IPO’d about two months ago and is still climbing in value. InterActive Corp. (NASDAQ: IACI), another digital media outfit engaged in integrating content and advertising, has been a staple in the industry for years. Its stock price has risen since early 2009 from $13.16 to about $50 currently, far outpacing “bandwagon” plays like GRPN and ZNGA.

Lower profile plays such as BV and IACI are successful because they effectively direct audiences and command attention for their clients in an Internet age of constant distraction. An upstart company following firmly along this path to success that is a must for investor due diligence is Los Angeles, California-based Webxu, Inc. (OTCBB: WBXU), a media company that owns and operates a network of consumer branded websites focused on customer acquisition, social media and E-Commerce. The company is growing by leaps and bounds since incorporating in mid-2010 and going public in late 2011.

Webxu, still only in its infancy, offers a unique proposition through its revenue-driving business strategies that are catapulting the company into a leadership position in the digital media space. Its Internet revenues are generated through sales of online advertising in monetization formats such as cost per click (CPC), cost per lead (CPL), and cost per action (CPA).

Strengthening and broadening the core competencies of its brand, Webxu made two substantial strides in 2011 that are providing the fuel for its growth strategy. In June 2011, Webxu launched Bonus Interactive, a company which specializes in customer acquisition and retention programs in multiple vertical markets. In November 2011, Webxu acquired Lot6 Media, a customer acquisition expert and solution provider for online businesses, media agencies, and marketers. Due in part to these transactions, Webxu, on a consolidated pro forma basis for the fourth quarter 2011 alone, posted net revenues of $4.7 million.

Projecting forward, if you annualize Webxu’s performance for the fourth quarter 2011, factor in its gross profit margins of 35% and its current 21 million shares outstanding, Webxu’s P/E ratio estimates will be ridiculously low compared to the industry average of 25.03:1. At an extremely conservative 15:1 ratio, WBXU would be valued at a minimum of 3 times its current stock price of $1.60 per share.

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Moreover, these estimates are calculated based only on current performance. The industry is booming and it would be presumable that Webxu is going to post higher earnings in 2012. This assumption is based on the expectation of the company expanding into additional vertical markets and potential closing of targets in their acquisition pipeline which include complementary businesses that add additional vertical growth. As noted recently by Webxu Chairman and CEO Matt Hill, “Along with our organic growth strategy, we recently signed a LOI with a current strategic and synergistic acquisition that we expect to bring significant top and bottom line growth in 2012.”

In the small cap world, phrases like “value proposition” and “undervalued” are used all too often with disregard; diluting the true meaning as a consequence of trying to make a developmental firm look better than it really is. Calling Webxu a true “value proposition” is a prudent example of the accurate use of one of these phrases. It is already posting enviable revenue statistics while maintaining a lean share structure and carrying very limited debt on its books. Employing an aggressive organic growth strategy along with adding complementary acquisitions, Webxu is positioned for exponential growth in both the near and long term in an industry that has nothing but upside.

Webxu (WBXU) Stock Quote and News:

Disclaimer: Neither nor its officers, directors, partners, employees or anyone involved in the publication of the website or newsletters (“us” or “we”) is a registered investment adviser or licensed broker-dealer in any jurisdiction whatsoever. Further, we are not qualified to provide any investment advice and we make no recommendation to purchase or sell any securities. The prior article is published as information only for our readers. is a third party publisher of news and research. Our site does not make recommendations, but offers information portals to research news, articles, stock lists and recent research. Nothing on our site should be construed as an offer or solicitation to buy or sell products or securities. This site is sometimes compensated by featured companies, news submissions and online advertising. Viper Enterprises, LLC (parent company of OTC Showcase) has been compensated four thousand dollars by an unaffiliated third party, Accelerize Financial, for its efforts in presenting the WBXU profile on its website and distributing it to its database of subscribers as well as other services. Please read and fully understand our entire disclaimer at


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