Vertrue (VTRU) – I wondered, “what on earth does this company do?” You know, I read their profile (Profile) and I am still not sure I understand. “Consumer Services Marketing”, sounds like a fancy name for Spam, unsolicited telephone calls and junk mail. But I won’t hold that against them… let us see if they make money.
- Revenues increased this quarter 10% Y o Y.
- They raised guidance for 2006.
- Net income decreased 5% due in part to FASB 103. I have been seeing this in a bunch of earning reports as companies now have to expense options. I call it “The World According to GAAP”.
- Market Cap: $374m
- Current Price: $38.27 vs. 52 week range of $33.33 to $45.39
- Current Ratio = .666
I think I need go no further. Like FTD, these guys are in hock to their eyeballs. They have assets of $466m, of which $268m are intangible. They have liabilities of $490m, of which $237m is long-term debt. In fact, even with their soft and squishy intangible assets, their total equity is below zero!?! In accounting lingo this is called a “deficit”, a term all US citizens should be familiar with. In Justadrone lingo, this is called, “Run Away!”
This is the 2nd company from the MFI list that has really been in debt with few tangible assets. I will be watching these companies to see how they fare. I guess they do well per MFI as the formula in a weird way values intangible assets higher than tangible assets as you don’t need to invest more capital in them. Maybe I have an unfair bias against these companies in debt. A year from now, I’ll review these postings and see if I was too harsh.
Meanwhile, I will sound the gong! Next up, RAIL.