Internet Security: The Battle Grows...Along with the Profits

04/11/2013 7:45 am EST

Focus: STOCKS

James Oberweis

President, Oberweis Asset Management, Inc.

This company is drawing substantial benefit from the seemingly never-ending war on hackers, writes Jim Oberweis of TheOberweis Report.

AVG Technologies (AVG) provides software and online services by simplifying, optimizing, and securing their Internet experiences. It has amassed a large community of 146 million active users.

The company’s product portfolio targets the consumer and small business markets and includes Internet security, PC performance optimization, online backup, mobile security, identity protection, and family safety software. AVG Technology offers offer free and low-cost offerings that can be accessed and utilized with minimal effort and limited technical know-how from the user.

While a significant majority of its active users have been users of their free products and online services, the company also offers products with premium functionality and enhanced customer support when customers purchase an annual or multi-year subscription.

Further monetization of this user base through online services represents a significant market opportunity for the company. AVG has approximately 15 million subscription users. The company has been successful in growing its product portfolio over time through internal development and select acquisitions.

In AVG’s latest reported fourth quarter, sales increased approximately 28% to $95.2 million, compared to $74.3 million in the fourth quarter of last year. The company reported earnings per share of 32 cents in the fourth quarter versus 21 cents in the same quarter of last year.

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