Tuesday, 15 May 2012

Are you on the Ancestry stock roller coaster?

Sunday's announcement of the cancellation of the US version of Who Do You Think You Are? the NBC TV program, the result of poor ratings, saw the stock of Ancestry.com close at $22.57. That's a decline of 13.72% from Friday's close of $26.16 but up from Monday's opening of $21.51.

In the past year ACOM has traded as high as $45.18 last July and as low as $20.67 in March.

Since this date last year several company insiders, Timothy P Sullivan,  Benjamin C Spero, Victor E Parker Jr., and Joshua John Inghram Hannah reported sales at above $30 per share, mainly as a result of exercizing options. In the last six months insiders sold a net 19,000 shares, institutional investors sold a net 1,927,540 shares.

There's mixed news for Ancestry. The company is taking new initiatives with its purchase of Archives.com and move into genetic genealogy. Subscribers are at record levels. WDYTYA's cancellation by NBC gives Ancestry an opportunity to try a fresh approach without indicating it had lost confidence in the program which was popular with the genealogical community.

On the other hand WDYTYA did push up the number of Ancestry subscribers each series. With its non-renewal how will the company keep an inflow of new subscribers to compensate for the relatively high turnover (churn rate.)

Insiders and, institutional investors, haven't shown any consistent enthusiasm for the company since July, but market analysts continue to rate ACOM a buy or better. Is this decline a buying opportunity?

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