Thursday, March 15, 2012

A Stock Cramer Never Recommends

         A Stock Cramer Never  Recommends
A Penny Stock that should be bought aggressively for the long term

TheStreet, Inc. (NASDAQ: TST $1.94)

TST stock is trading less than book value. It's very difficult in today's environment to find any stock that is not trading at a premium. Most of the market is higher than it was in October and finding discounted investments is nearly impossible.

(Digital) Content Merger & Acquisition Activity.

Advertising Industry Statistics

TheStreet (TST) year end stock prices
  • 2007 $15.92
  • 2008 $ 2.90
  • 2009 $ 2.40
  • 2010 $ 2.67
  • 2011 $ 1.68
The stock has declined from 2007 highs due to declining sales, income and cash flow.
(Stockdiagnostics charts: OPS 20q, OPS 5yr, FCF 20q, FCF 5yr, LTGR,GFNN)

Fundamentals have declined over the last 5 years. Weakening fundamentals are nearly always avoided on the long side, but I find the shares attractive on the health of the company's balance sheet and the low Operational Cash Flow multiple the stock currently trades.
  • FY2011 Operational Cash Flow = $3,558,977.00 or $0.11/share

The online financial information sector is here to stay and Thestreet is a pioneer in the space. I believe TheStreet will be acquired at some point at premium to it it's current cash value of $2.34.

TheStreet, Inc Annual report
TheStreet, Inc. Management Presentation

I'm not sure if Cramer is allowed to tout this stock, but if he could, it would get a big United States Booo-Yaaa!

Tom Renna, Equities Research, LLC

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