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Based in New York City, Stagwell (STGW) is transforming digital marketing with a leading-edge technology platform that connects many of the world’s best-known ambitious brands with their customers, observes Mark Skousen, growth stock expert and editor of Home Run Trader.
The firm offers over 13,000 specialists in more than 35 countries to help improve business results for clients. The company’s digital platform supports data management, content delivery, sales and service, and back-end systems.
Stagwell also provides audience analysis, media buying, and planning services and consulting on everything from creative content to financial relations to social media. Digital marketing is the preferred choice for most companies and non-profits these days. That’s because a targeted audience is more effective than running ads on billboards, in newspapers and magazines, or on TV and radio.
The numbers here are excellent. Annual revenue is $2.7 billion. Sales are growing 16% year-over-year. And I estimate that earnings are likely to grow from $0.90 a share this year to $1.25 next year. Yet, the stock has recently been a bargain at just six times prospective earnings.
Eli Samaha is the founder and managing partner of Madison Avenue Partners, a value-based investment manager. He also sits on the board of Stagwell, where he has access to plenty of material, such as non-public information about the company’s business prospects.
SEC filings reveal that Samaha bought 750,000 shares of Stagwell last month at $6.75 a share, an investment of more than $5 million. He now owns — directly or indirectly — more than 7.1 million shares.
Stagwell has strong margins and adjusted earnings. It is growing twice as fast internationally as domestically. And it is growing rapidly through acquisitions. I expect it to be a strong performer in the weeks and months ahead. So, you may want to consider buying Stagwell at recent prices, with a sell stop at $5.00 for protection.
About the Author
Mark Skousen is a financial economist, university professor, and author of over 25 books. Dr. Skousen was recently listed as one of the top 20 living economists in the world, and is known as "America's Economist." In 2018, Steve Forbes presented him with the Triple Crown in Economics for his work in theory, history, and education.
Dr. Skousen is a Presidential Fellow at Chapman University in California, where he received the "My Favorite Professor Award" in 2019. He has worked for the government (CIA), non-profits (president of FEE), and runs FreedomFest, "the world's largest gathering of free minds," every July. He has also taught economics and finance at Columbia Business School and Columbia University.
Since 1980, Dr. Skousen has been editor-in-chief of Forecasts & Strategies, a popular award-winning investment newsletter. His other products include Five Star Trader, Fast Money Alert, Home Run Trader, and TNT Trader. Dr. Skousen's bestsellers include The Making of Modern Economics, Investing in One Lesson, and The Maxims of Wall Street.
Based on Dr. Skousen's work,The Structure of Production (NYU Press, 1990), the federal government began publishing in Spring 2014 a broader, more accurate measure of the economy, Gross Output (GO), every quarter along with GDP.
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