| To: Tom Caruthers who wrote (77) | 3/22/2005 12:54:39 AM | | From: Tom Caruthers | | | | Glenn,
Don't know if you have been watching KNOT volume, but it is picking up quite a bit lately, moving KNOT to new 52 week highs. This portends good things. I'd imagine that we will be able to get relisted soon.
Tom |
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| To: Tom Caruthers who wrote (81) | 4/3/2005 7:19:29 AM | | From: Glenn Petersen | | | | I couldn't figure out why KNOT popped on Friday, until I picked up my copy of Business Week:
businessweek.com
APRIL 11,
By Gene Marcial
INSIDE WALL STREET
The Knot: Here Come The Brides
Weddings are big business, and The Knot (KNOT ) is a pure player in that hot market. Weddings account for $72 billion in annual domestic retail sales, notes CEO David Liu, who says The Knot's revenues have jumped from $24.1 million in 2001 to $41.4 million in 2004. The company turned profitable in 2003, earning $1 million, or 5 cents a share. In 2004, it made $1.3 million, or 7 cents.
Just six years old, the company provides information, products, and services on its Web site and in its magazines to couples planning to get married. Its services include a registry where engaged couples list their gift preferences at specific stores. The Knot has inked a pact this month with Target (TGT ) for the retailer to offer its products on The Knot Web site, which has one million active members. Target is the largest wedding gift registry retailer. Liu says The Knot's services span the period from engagement to motherhood. Justin Cable of securities firm B. Riley says The Knot's online business showed solid growth in 2004 and should expand again this year. Rob Amman, managing partner at R.K. Capital Management, which owns stock, says the shares, now at 7.20, are cheap, in light of The Knot's rapid growth and high-margin (75%) business. He sees it earning 9 cents a share in 2005 on sales of $50 million. But that will jump to 46 cents next year, he says, on sales of $60 million, due to a widening in the margins and a jump in vendor ads on its Web site and magazines.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial |
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| To: Glenn Petersen who wrote (82) | 5/27/2005 10:28:19 PM | | From: Tom Caruthers | | | | Hi Glenn,
I have picked up some shares at this level after selling some fortunately at the high. I am still a big believer in this concept. I am waiting to pick up a lot more on a retreat to under $6. The stock has violated its support and the volume on up days is very poor.
Tom |
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| To: Tom Caruthers who wrote (85) | 8/1/2005 4:01:40 PM | | From: Glenn Petersen | | | | A nice move from KNOT today. Earnings out on August 11. If Federated (is stupid and) dumps its (future) position, you may get an opportunity to add some shares below 6.
NUPTIALS
Take the Plunge: It’s Time to Buy the Knot
The small-cap wedding specialist is registering big gains in online-ad sales.
By Matthew Boyle
Ah, to be young, in love, betrothed—and in a state of panic over where to find the reception hall, the bridesmaids’ dresses, and the DJ. That’s where wedding specialist the Knot (KNOT, $7) comes in. Founded in the dot-com froth of 1996, the Knot not only survived the bubble but has emerged as the web’s go-to spot for nuptials-related content and services. With more than 2.1 million visitors a month, its flagship site (theknot.com) is attracting a passel of advertisers eager to grab their share of the $70 billion that’s spent annually on weddings in this country.
That huge web presence gives this small fry (market value: $155 million) great growth potential. The Knot’s online-ad revenue increased 41% in 2004 and is growing even faster this year. To broaden its appeal, the company recently added sites designed to target newlyweds (thenest.com) and singles (greatboyfriends.com). It also cut a deal with Target’s gift registry—the largest in the U.S., according to NPD Houseworld—to shore up a glaring weak spot in its retail business. KNOT is currently trading at nearly 100 times its previous 12 months’ earnings. But JMP Securities’ Bill Morrison, the lone analyst who covers the Knot, expects profits to jump from 11 cents a share this year to 31 cents in 2006. Based on those projections, KNOT is now trading at a forward P/E of 26. "We think online media is a growth area, and the Knot is the dominant media asset in its niche," says Henry Ellenbogen, co-manager of T. Rowe Price’s highly rated Media & Telecommunications fund, which owns around 200,000 shares of KNOT.
As with any union, though, saying "I do" to the Knot has its risks: Investors should keep a close eye on what occurs once retail giant Federated completes its acquisition of May Co., which has a 16% stake in the Knot. (Federated is a shareholder and partner of WeddingChannel.com, the Knot’s main rival.) Should Federated sell May’s shares on the open market, it could put a damper on KNOT for several months. Still, we think this wedding party is worth crashing.
fortune.com |
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