The problem with all the great values in the current stock market is that many of these stories can stay great values for a very long time. You can thank the bear market for this.
The S&P 500 Index does not look very healthy here and I’m afraid that general stock market weakness is going to with us for quite some time.
I’m always looking for stocks that are unappreciated in the market. One small company that fits the bill is DemandTec, Inc. (NASDAQ/DMAN).
This small technology company helps retailers sell more product to consumers. Right now, retailers can use all the help they can get.
Founded in 1999 and based in San Carlos, California, this company sells a suite of on-demand software applications that are designed to help retailers analyze their customers and develop new business initiatives to improve sales and profitability. Some of the company’s customers include: Advance Auto Parts, Best Buy, Circle K Stores, Delhaize America, Giant-Carlisle, H-E-B Grocery Co., Monoprix and Safeway.
The company recently announced solid financial results for its first quarter of fiscal year 2009 ended May 31, 2008.
According to DemandTec, its revenues were just over eighteen million dollars in the first quarter of fiscal 2009, representing impressive growth of 36% over revenues of just over thirteen million dollars generated in the first quarter of fiscal 2008, and growth of four percent from revenues of almost seventeen and a half million dollars generated in the fourth quarter of fiscal 2008.
Loss from operations was $1.5 million in the first quarter of fiscal 2009, as compared to a loss from operations of $1.1 million in the first quarter of fiscal 2008. Net loss was $1.0 million, or ($0.04) per share, in the first quarter of fiscal 2009, as compared to net loss of $1.2 million, or ($0.19) per share, in the first quarter of fiscal 2008.
DemandTec finished the quarter with cash and cash equivalents of almost eighty and a half million dollars, representing almost $3.00 per share, without any material debt to speak of.
There are a lot of companies like DemandTec that are languishing in this market. This always happens in bear markets for stocks. But, here you have a growing company selling products that are in demand, and the enterprise is just about to become profitable. Where I come from, that’s a great combination.