Friday, 18 March 2011

Ancestry.com stock: review and prospects

Ancestry.com stock closed on 17 March at $30.39. From initial offering at $13.50 in November 2009 the price of climbed to a peak of $38.69 reached on 16 February. Since then ACOM has slipped.

Also on 16 February Joshua Hanna replaced Christopher Tracy as Executive Vice President and General Manager of Ancestry.com. The following week, on 24 February, the company released it's most recent quarterly results. Earnings matched expectations. However, it was the first quarter since the stock went public that ACOM had not beaten estimates. Subscriber growth, 5% in the previous quarter, had slipped to 1.3%.

On 8 March the company released its annual report for 2010. While the subscriber base rose substantially in 2010 so did the number of employees, advertising expenditures and the cost of obtaining a subscriber. There are also statements in the report indicating the company recognizes it is operating in an increasingly competitive market, especially with the energetic development of familysearch.org.

Insider trading appears bearish.  The past six months have seen company insiders selling 554,000 shares in 16 transaction, as recently as 14 March by Mr Hannah, while just one insider transaction, for 5,800 shares, was a purchase.

Analysts estimates are for a 40% drop in net earnings per share for the first quarter of 2011 over the previous quarter. First quarter results are expected to be released on 25 April. Analysts anticipate recovery in the second quarter.

No comments: