Buy Vistaprint (VPRT)

The Business


Vistaprint is the premier resource for small businesses.  Whether you need to make a website, create and distribute business cards, mail special reports to clients, or create an email database, Vistaprint has all the answers.  In fact, Vistaprint has a specific niche in the market for micro-businesses that have ten employees or fewer.  Although this may seem like a small market, Vistaprint's research has shown that there are at least 50 million micro-businesses in the United States, Europe, and Canada alone.  This global perspective has influenced Vistaprint to diversify its business, which can be shown through their revenue distribution: 57% of revenue comes from North America, 38% from Europe, and 5% from Asia Pacific.  It is important to note that Vistaprint is pursuing increasing its footprint in the Asia Pacific market.

The Stock


Vistaprint appears to be a very attractive growth investment because of its strong financials and solid value.  Compared to last year, revenue and earnings growth have increased over 21% and 22%, respectively.  This means that Vistaprint has successfully expanded its business in North America, Europe, and Asia Pacific.  With zero debt and over $230 million dollars have cash, Vistaprint is poised to continue its aggressive expansion and increase its customer base.

Over the past month, shares of Vistaprint have dropped 42%.  For a company of this quality, the share price drop is quite astounding.  Aside from the market getting beat up in general, Vistaprint shares dropped because they produced lower than expected earnings expectations for next year.  Despite the large sell-off, Vistaprint has a very sound business plan to continue its expansion.  With a market capitalization of $1.29 billion and a P/E ratio of 16, I believe that Vistaprint represents tremendous value.

Side Note


Remember not to allocate too much of your portfolio to any one stock.  A general rule of thumb is not to let any stock represent over 10% of your portfolio, and to also own at least 20-30 companies.

Michael R Caligiuri owns shares of Vistaprint.