For the Executive Decision segment of his "Mad Money" program Monday, Jim Cramer sat down with Vivek Shah, CEO of j2 Global Inc. JCOM, a portfolio of Internet media and software brands with shares that are up 40% in 2019.
Shah said 60% of j2's revenue stems from recurring sources and most of the remaining 40%, which comes from advertising, also renews on an annual basis. He said j2 is not in the business of selling impressions or page views; rather, it focuses on performance marketing, providing customers with actual clicks, leads and client acquisitions.
When asked about his company's business model, Shah said j2 is run for profits with slower revenue growth, not for growth at all costs. He said far too many companies are willing to spend a dollar to make 75 cents, but he never has been interested in those types of models.
Shah said his company is also hot on the acquisition trail after already spending more than $3 billion to buy businesses that are then improved and optimized for profits so they can add to j2's momentum.
Let's add the story that the charts tell to this fundamental outline.
In this daily bar chart of JCOM, below, we can see an interesting pattern to the price action. First there is a rally from late December to April followed by a sideways consolidation to August. From August prices have launched a new uptrend into November. Prices are above the rising 50-day and the bullish 200-day moving averages. The trading volume looks like it has increased from August while the On-Balance-Volume (OBV) line shows a rise the past 12 months. The OBV line has made new highs since early October to match and confirm the price strength. Buyers of JCOM are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in September for a buy signal and remains bullish.
In this weekly bar chart of JCOM, below, we can see that prices have finally cleared the resistance around $90. Prices are trading above the rising 40-week moving average line. The weekly OBV line is positive and the MACD oscillator on this longer time frame has been bullish since February.
In this Point and Figure chart of JCOM, below, we can see the breakout at $97.31 and the upside price objective of $113.
Bottom line strategy: Traders could try to go long JCOM near $95, risking below $90 and looking for $113 on the upside.