Text size: Small font Default font Larger font

Have an account? Please log in.

TSI Network
Patrick McKeough is one of Canada’s top safe-money advisors. The Wall Street Journal, Forbes and The Hulbert Financial Digest have all recognized his ability to find stocks with hidden value. He is editor and publisher of The Successful Investor, Stock Pickers Digest, Wall Street Stock Forecaster and Canadian Wealth Advisor; inventor of the Quick Profit/Value System and the ValuVesting System™. A best-selling Canadian author, he wrote Riding the Bull, the book that predicted the 1990s stock-market boom.

Growth stocks: eBay aims to handle even more online shopping

December 26, 2011 -  Be the first to comment
Posted by: Pat McKeough Filed in: Growth Stocks
  • Comments

Growth stocks: Ebay

As the post-Christmas shopping season opens, we look at one of the most interesting growth stocks in the retail industry. This stock began by allowing shoppers to buy and sell items from the comfort of their home computers, but it has since aggressively added to the array of online transactions it handles.

EBAY INC. (Nasdaq symbol EBAY; www.ebay.com) operates the world’s largest online auction website, with over 99 million users in 39 countries. The company charges users fees to list and sell their goods through its websites.

The company also operates several other websites, including StubHub (live event ticket sales), Shopping.com (comparison shopping) and Rent.com (apartment and house rentals).

In all, these websites account for 55% of eBay’s overall revenue. The company gets a further 35% of its revenue by processing online financial transactions, mostly through its PayPal subsidiary.

Look at the latest figures from the undisputed independent authority on investment newsletters, Hulbert Financial Digest. They show that The Successful Investor has beaten the Wilshire 5000 Total Stock Market Index with a spectacular 16.7% compounded over each of the last 10 years. That’s more than 100% better than the index’s 7.9% average! That means that during a decade that included some of the most wrenching downturns in stock market history, The Successful Investor posted remarkable returns for our readers. Pat McKeough tracks three different portfolios for readers of The Successful Investor—one for Conservative Growth, one for Aggressive Growth and one for Income-Seeking Investors. And subscribers get free updates and advice on the stocks they’re following every week in the E-mail/Telephone Hotline. We are happy to offer you a bargain-priced, no-risk introduction to The Successful Investor. It gives you the first month FREE. Act now. Click here.

Growth stocks: eBay earnings jumped even without Skype

The remaining 10% of this growth stock’s revenue comes from GSI Commerce Inc., which eBay bought for $2.4 billion in June 2011. GSI, which has over 500 business clients, sells services that help its customers process orders from their websites and increase their online sales.

In 2009, eBay sold 70% of Skype, which lets users make free voice and video calls over the Internet. eBay received $2.0 billion for this interest, and received an additional $2.3 billion for its remaining 30% stake when software giant Microsoft Corp. (Nasdaq symbol MSFT) completed its purchase of Skype in October 2011. Even without Skype’s full contribution, eBay’s earnings jumped 35.3% in 2010, to $1.8 billion, or $1.36 a share.

eBay is investing heavily in technology that makes it easier for users of smartphones, tablet computers and other mobile devices to access its websites. These investments will also help PayPal securely process payments from mobile devices.

The stock trades at 14.3 times the $2.10 a share that eBay will probably earn in 2011 and 13.3 times the company’s likely 2012 earnings of $2.25 a share. These are low multiples in light of the company’s large share of the fast-growing e-commerce market.

In the latest edition of Wall Street Stock Forecaster, we assess eBay’s chances of continued success in a fiercely competitive and rapidly changing industry and its plans to continue raising its spending on technology and buying other companies. We conclude with our clear buy-hold-sell advice.

You can get Wall Street Stock Forecaster, with our advice on U.S. growth stocks and value stocks written especially for Canadian investors, along with 5 in-depth Special Reports FREE, as well as FREE access to our weekly Email/Telephone Hotlines (which keep you up to date on our U.S. stock market investments between issues) when you subscribe now. And as a new subscriber you can save $50.00 on an introductory subscription. Click here to get started right away.

Be the first to comment

Permalink: http://www.tsinetwork.ca/?p=50946

All of our articles are available for republishing as long as you provide a link back to the original article.

Tags: , , , , ,

  • Comments

Would you like us to inform you when new articles are posted?

What do you think? Go ahead and add your comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.

Twitter Facebook
Follow TSI Network on Twitter and Facebook!

TSI Network Products

In today's economy, it's more important than ever to have clear investment advice that is tailored to your own personal goals. This is where Pat McKeough's conservative safe-investing philosophy comes in. Through TSI Network, you get access to reports, monthly newsletters and premium services that go beyond the daily headlines to give you all the advice and information you need to build a portfolio with long-term growth potential. Simply click on the links below to discover which service is right for you.