Another Foolish mention...13 Nov 2015 10:12
"not hopeful for 2016" Great. Thank you Motley.
Blinkx
Last year, internet advertising firm Blinkx (LSE: BLNX) made a loss of $20.8m on sales of $215m. During the first half of the current year, Blinkx expects to lose $7m on sales of $90m.
A return to profit is expected next year, but even the company’s own broker only expects earnings of around 2 cents per share, which puts Blinkx stock on a forecast P/E of around 20.
Of course, one point in Blinkx’s favour is that it still has plenty of cash. At the end of September, cash and cash equivalents totalled $82m. This also helps to support the valuation for Blinkx shares. Almost half of the company’s share price is covered by net cash.
My concern is that this cash may not benefit shareholders. Blinkx doesn’t pay a dividend and is likely to continue to spend its cash until it either runs out, or manages to turn a profit.
The rise of ad blockers and other such software seems likely to make it harder for Blinkx to make money. I’m not hopeful of big gains in 2016.