Earlier this year I rounded up sleeper picks for 2015 from tech people I know. I included some of my own, including less-heralded tech IPOs of 2014 that would have good sophomore years as public companies. One that I liked in particular (and mentioned on Real Money) is GrubHub (GRUB). It's out with great earnings this morning and shares were up almost 10% to $41 recently. It's been above $40 before, but not since September.
GrubHub is a middleman, connecting mobile users and third-party restaurants for food delivery. It also has the very popular Seamless delivery service in New York City, where ordering take-out food is a way of life. How do you win as a middleman? By being the No. 1 brand in that space and spending money on advertising to widen the distance between you and the Nos. 2 and 3 players.
That's exactly the map that GrubHub has been following under founder and CEO Matt Maloney. Since its initial public offering last year -- bringing millions more in capital to throw at advertising -- you've likely seen more national TV ads from GrubHub. Competitors are now only regional and can't spend money on similar advertising, nor would they want to since it would be out of their service area.
GrubHub is already popular with college students who will eventually graduate, start careers and have even more money for take-out food. They will also start families and be pressed for time before or after soccer practice and need to order take-out.
In short, GrubHub's financials should get better with each passing quarter. It is just scratching the surface of its addressable market in the U.S. Keep watching GrubHub.