A Pair of Lesser-Known Internet Stocks to Consider

 | Apr 18, 2016 | 1:00 PM EDT
  • Comment
  • Print Print
  • Print
Stock quotes in this article:




The Internet is a big place, and a number of companies have carved out niches that are both profitable and dynamic. Alphabet (GOOG) and LinkedIn (LNKD) are just a couple of the major success stories. But other, lesser-known companies have done well too, and they could make excellent additions to your investment portfolio.

One of these is NIC Inc. (EGOV), which designs and helps maintain government websites and provides other e-government services. Its sole market is the public sector, including federal, state and local agencies. For example, the company provides portals that allow automobile owners in various states to register their vehicles online while other portals enable hunters and fishermen to obtain required licenses online.

To choose stocks to recommend, I rely on automated strategies I created based on the thinking of some of Wall Street's greatest minds. One of these strategies, which mirrors the thinking of Warren Buffett, points to NIC for its well-established position in the e-government market, earnings per share, which have increased in each of the past 10 years, the lack of debt, an d high returns on both equity and total capital. In addition, this strategy projects an annual return over the coming decade for NIC of a strong 20.3%.

While NIC focuses on the government Internet market, Angie's List (ANGI) targets the consumer Internet market. It lists providers of local services, such as auto mechanics, health care providers and home improvement companies, all of whom Angie's list has done a background check. In addition, user reviews are verified and charged a membership fee to use Angie's List.

A strategy I based on the writings of James P. O'Shaughnessy recommends this recommender of local services. According to this strategy, the market cap and earnings per share have improved in each of the last five years, and it has a desirable price-to-sales ratio (which indicates a well-priced stock). Among those companies meeting the above criteria, the strategy then picks the top 50 based on relative strength, which measures how well a stock has performed during the past year relative to the overall market. Angie's List makes it into this top-50 cohort.

Angie's List has only a $457 million market cap, so if you see the stock spike up, be patient and let it return to its natural level before buying.

Columnist Conversations

Now that AAPL has violated the shorter term support, these are the two areas I have to consider for new buy en...
The symmetry is holding up in MCD.  Target 1 is 163.34 if we continue to hold above here!  ...
As far as TSLA is concerned, I still have a higher target above the market at the 409 area.  I stated in ...
The TLT setup discussed in my last commentary is a bust. Key support was violated and it violated the recent l...



News Breaks

Powered by


Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.