Wyatt: Tying the Knot
01/09/2004 12:00 am EST
As its name implies, Growth Report focuses on high-growth potential companies, with several of its top performers coming from the high-tech arena. Editor Ian Wyatt has been very successful at uncovering exciting, but less-known players in various Internet sectors, such as his top pick for 2004, an online wedding play.
"The Knot (KNOT OTC BB) is a media publishing company that assists individuals with planning and executing their weddings through its Web site TheKnot.com and its local and national magazines. A clear leader in wedding publishing, The Knot should continue to profit from growth of advertising (online and print) as well as from the build out of its merchandising business. For the nine months ended Sept. 30, revenues grew by 27% to $28.5 million with earnings per share of $0.04.
"We expect The Knot to increase revenues by 30% in 2004, resulting in net income of $5.5 million or 24 cents a share. With shares trading at $4, The Knot commands a forward p/e of 16, which we believe makes it extremely attractive given our expectation for long-term top- and bottom-line growth in excess of 30%. The company’s recently completed $10.5 million private placement positions The Knot for future acquisitions, which could accelerate growth beyond our current expectations. Like many of our favorite investment ideas, The Knot is unknown to most on Wall Street and Main Street, making the company an attractive opportunity."