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Welcome to the Equities Section of Options Realm |
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Today (3/24/2007) I am writing about a stock that has interested me for some time. It is TSCM or TheStreet.com INC. which is a online financial site that has both free and paid content. One of the main owners of the site is Jim Cramer who hosts Mad Money on CNBC. Jim Cramer has recently been in the news when a video was put on popular online video network Youtube. The video displays Jim Cramer explaining different ways that the market could be manipulated by hedgefund managers. TSCM is a very interesting company which had its IPO during the tech boom of the early 2000 and then proceeded fall with all of the other tech stocks at that time. TSCM was one of the companies that happened to make it through those tough times and over the past two years TSCM has gone from have net losses to being profitable. Over the past two years many things have come together for TSCM for the company to turn into a profitable company. One of these important factors is the importance of the comeback of the stock market since the September 11th attacks. With the market recovering from the losses the overall investor sentiment has made people want to enter into the stock market again. This coupled with the emergence of online discount brokerages has left a real need for investing information. TSCM supplies this information that people want. The analyst’s expect the earning of TSCM to grow at a twenty percent growth rate over the next five years. Using these growth estimates and using a DCF model you get a price estimate of 10.15 a share. If we modify the growth estimates to only 15% a year over the next five years then we get a price of $7.90 a share. Given this information we see that at its current price TSCM is overvalued but given the way that the market has set up for TSCM I feel that the business is in a financial climate to prosper. With the combination between discount brokers and the added amount of investors managing their own money I think that TSCM can continue to prosper yet at these current prices I do not feel TSCM is a buy. |
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