EmergingGrowth.com Report on Holiday Spending and Bluefly (NASDAQ: BFLY) as indicated by comScore (NASDAQ: SCOR).
Miami, FL - December 6, 2012 (www.investorideas.com newswire) EmergingGrowth.com, a leading digital financial media company, Reports on Bluefly (NASDAQ: BFLY) as indicated by comScore (NASDAQ: SCOR). Also read about other indicators such as Keynote Systems (NASDAQ: KEYN) and Harmonic (NASDAQ: HLIT), and a report on Yelp (NASDAQ: YELP)
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Leading analytics firm comScore (NASDAQ: SCOR), toward the fall of November, forecasted a 17 percent growth in U.S ecommerce holiday spending to $43.4 billion. Interestingly, this foresight has already begun materializing. On Cyber Monday, online retailers managed to rake in $1.465 billion, making the day the heaviest spending day in U.S ecommerce history. It was also established that 37 percent of U.S consumers use smartphones, even when in brick-and-mortar stores, to compare prices. Considering the ballooning number of smartphone users, ecommerce spending is very likely to continue trending upwards. To underscore the projected growth in ecommerce spending, online spending during the third quarter edged up 13 percent to $41.9 billion; marking the 12 th consecutive quarterly growth in online spending.
What does this expected increase in online spending mean for emerging growth companies like Bluefly (NASDAQ: BFLY)?
While the implications are varied, the expected increase in online spending during the holiday season, coupled with anticipated general steady increase in online spending thereafter, will certainly have positive implications on Bluefly. The emerging growth company is neck-deep in the fashion industry; an industry that is permanently fixed in the crosshairs of consumers. In addition, it currently has a new strategy that will allow it to not only increase shareholder value but to also widen its footprint during the holiday season and thereafter.
New strategy is a recipe for success
Bluefly's (NASDAQ: BFLY) new strategy is a sure recipe for success. The new strategy trades off high gross margins for increased inventory turns. In simple terms, the company is more focused on increasing the number of units sold than it is on reaping lumpy profits- this is a tell-sign of a company that is geared towards attracting customers and fostering growth. In addition, the new strategy optimizes return on invested capital. This increases shareholder value and allows the management to carry on with operations without any interference from disgruntled investors.
Although the strategy was unveiled some time back, it has already started delivering material effects- as witnessed in the company's 3Q earnings report . During the quarter, the company increased inventory turns by 80 percent, signaling increased buying among its customers. Similarly, there was a 26 percent increase in first-time customers. To underscore the increased enthusiasm from first-time customers, the company also managed to record a 44 percent growth rate in orders from international markets. A crucial part of the strategy that managed to deliver increased inventory turns was the set of incentives put forward to lure new customers. First-time customers were not only given daily deal offers but they were also given promotional shipping, which essentially translates to free shipping.
As expected the increase in first-time customers came at a cost; nevertheless it was a worthy cost considering that the company is edging closer and closer to meeting its goals. Costs tied to first-time customers (daily deal offers and promotional shipping) partly contributed to the decrease in gross margins percentages which decreased from 29.1 percent to 13.6 percent. All the same, the company as of the moment has managed to not only cast its net over very many new customers but it has also maintained a leash on its current customers. This will greatly favor the company during the holiday season and thereafter. Given its strategy and positioning in the fashion industry, Bluefly is one of the emerging growth companies that it set to benefit from the increase in ecommerce spending.
Keynote Systems (NASDAQ: KEYN) provides Internet and mobile cloud monitoring and testing solutions worldwide. Keynote's mobile commerce index tracks the speed and reliability of the 30 top mobile retail sites from the vantage point of smartphone users in cities across the United States. Mobile retail sites typically average around 8 seconds to load. On Cyber Monday Keynote data suggests that mobile sites were taking 18 seconds to load. This is about seven times slower than the same websites' traditional pages on Cyber Monday.
The company has a market capitalization of $243 million, offering investors a yield of 1.75%. The stock is trading at $13.61, above its 52-week low of $12.46 and well-below its high of $21.49. There are currently five analysts that cover the stock with the lowest target at $17. Over the last six months insiders have been buyers of 561,662 shares, as expectations continue to grow for the stock from within. Based on demand for the company's services there can be substantial growth for this company.
Harmonic Inc (NASDAQ: HLIT) manufactures, and sells video infrastructure products and system solutions to create, prepare, and deliver a range of video services for television and media platforms. With services like Harmonic's in demand the company is consistently reinvesting in technology to better its core business. The company continues to gain market share in a sector with some competition.
The stock price of HLIT usually does well for next three months when looking at the company's past performance. The seasonal effect of holiday sales helps Harmonic's bottom line. The company has a market capitalization of $530 million and is trading just above $4.50. The stock price is under within 80 cents of its 52-week low, which offers a great entry level.
Yelp (NASDAQ: YELP) analysts at Cantor have suggested that the previous declines were excessively based on the weak execution and focus enacted by a minority of direct sales people, and that this had an exaggerated impact on short-term performance. With the management at Yelp looking to address these issues, sales performance in the next quarters will likely pick up and show improvement.
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