Rather than getting an MBA from the University of Phoenix Online , prospective business students might do just as well to study the company itself.
With extremely low capital needs and very high free cash flow, UOPX is one of the best Internet companies this side of eBay .
Legg Mason downgraded the stock based on valuation after the company merely beat earnings estimates this morning, and at 84 times earnings and 44 times free cash flow, Legg Mason certainly has a point.
But good luck to anyone trying to pick the top in UOPX. The company has hit new high after new high since going public in October 2000. Its longest correction during that time lasted about 3-4 months, amazing considering that most stocks were in a downtrend for two years of that time.
In fiscal 2002, which ended last August, UOPX generated more than $73 million in free cash — almost three times its capital expenditures and business investment expenses, and fiscal 2003 is tracking similarly. The company has $200 million in cash and no debt.
Anyone looking for proof of the Internet’s viability and maturity as a business model need look no further than UOPX.
The broader market fell sharply Monday ahead of a two-day Federal Reserve meeting. Analysts are sharply divided over whether the Fed will cut interest rates by 25 or 50 basis points on Wednesday. Questions about mortgage giant Fannie Mae’s accounting practices also weighed on stocks.
The Nasdaq plunged 33 to 1610, the S&P 500 fell 14 to 981, and the Dow dropped 127 to 9072. Volume declined to 1.35 billion shares on the NYSE, and 1.69 billion on the Nasdaq. Decliners led 24-8 on the NYSE, and 24-7 on the Nasdaq. Downside volume was 87% on the NYSE, and 82% on the Nasdaq. New highs-new lows were 65-9 on the NYSE, and 89-10 on the Nasdaq.
FairMarket was unchanged on news that it will be acquired by eBay
, which gained on the news.
Amazon rose 1.5% on a deal with Intuit
.
Comshare soared 25% on a takeover offer.
Akamai fell 10% despite customer wins with IBM
.
Cray gained 3.4% on an article in Barron’s that said the supercomputing market may be turning around.
Market Commentary: For our free daily market commentary and technical analysis, please visit the InternetStockReport.com home page at:
http://www.InternetStockReport.com.
