Time for another stock review. This one is ticker symbol PERI, PERI and network. In this video, we're going to cover in great detail the balance sheet.
We're going to show you the insiders who are buying the stock, who's selling the stock, the balance sheet, the revenue, the margins. I'm going to give you a profitability score. I'm going to share you the sentiment of the stock. I'm going to give you a solvency score. Is the business likely to go bankrupt?
What's the growth rate? I'm also going to share with you the breaking news around the stock, what's happening with the company. Also going to look at the latest investor news and the website to get more of an in-depth look into the company. These reviews all make their way on the best, most advanced algorithmic software in the world.
It also accompanies Meet the CEO series. So if you are from Perian Network, I invite you to come onto my show and do a... do an interview with me. I'm doing meet the CEO.
I'm meeting all the CEOs on the New York Stock Exchange one by one. And I'd love your thoughts on your company and share your story to the world. So these reviews are the most honest, most reliable, trusted source of financial information because I'm not paid, sponsored to provide it. The information is based upon AI algorithmic software, which is the most advanced software on planet earth. It's not biased.
It's not in any way shaped by anybody else. It does allow you the information to make an informed decision whether you should buy, sell, or hold a stock. And to give full accountability, my portfolio is consistently up. I'm consistently beating the market, consistently beating Warren Buffett by miles.
It's actually quite easy. It's very, very easy to make money. The hard part is to keep it. I never use options.
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I'm not a financial advisor. However, I've had great success investing because I buy companies, not share prices. And I study the stocks and I study the business and the balance sheet and the numbers. And then I get to know the people behind the businesses with meet the CEO. So I understand exactly what I'm buying.
So without further ado, let's get straight in and look at this one. So we're looking at Perry. What is it? Perian Network. Well, we can see here from the chart that it opened all the way up at $65, dropped down and flew back up and back down.
It's got a very violent, very aggressive chart, a bar chart, a very basic line chart, but we'll come into much more detail in a moment. But what is Perian Network? It's a global technology company.
which engages in the provision of advertising solutions for brands, agencies and publishers. It operates with the following geographical segments, North America, mainly US, mainly US, Europe and others. Let's open up some more information. The firm solutions include publisher platform, search, monetization, sort, cookie list targeting. Interesting.
High impact, creative and actionable monitoring. The company was founded by Offa Adler and Yaron Adler in November 1999. So it's been around for 24 years and is headquartered in Israel. Interesting with what's going on there right now. The listed name for PERI is PERIAN Network. OK, now then.
This is my first look at the stock. This sounds a bit like potentially Google, potentially. Maybe I'm wrong. It's why I'd like to speak to the owner of the company and learn more about it. I like buying companies I understand.
I like buying companies where I talk to the CEO. I like to build a relationship with the business. I like good balance sheets. We'll come on to all that.
But I also like proprietary, unique companies. There's only one Tesla. There's only one Google.
There's only one Virgin Galactic. There's only one Apple. So I don't want to buy companies that aren't standalone at the best in their field.
Anyway, we'll learn more as we go into the company website later on. If you bought this on margin, I currently use margin. I'm in margin 8% right now. It's regarded as medium risk, 45% in fact is your maintenance requirement.
25 is the lowest, 100 is the maximum. What that means is. If you buy it on margin and it was the only stock that you were buying, because if you buy lots of stocks on margin, it all gets a little bit confusing, a little bit complicated.
But if you're only buying one, you need to have 45% funds available to be able to cover the requirement. Because if the price of the stock dropped, you do have to have a certain amount in there to cover your allocation. So the higher that is, the more risk it is.
It doesn't mean you're going to get a margin call, but it gives you the indication. of the volatility of the stock. Anyway, it's a 1.47 billion market cap.
So it's a small company relatively. High to debt, it's bigger than me, but not as big as Google. High today, 31.56, 52 week high, 42.75. Price to earnings ratio, $12.54. So clearly it makes money.
Price to the earnings ratio, that's the price you're paying for the stock today. Remember the valuation is just the stock. the price of the stock today. That's not the valuation of the company. I will give you the real valuation in a few moments.
But right now, that's the price to earnings ratio. You need to compare that to other companies in the same sector. It means nothing comparing it to Tesla and going, hey, well, Tesla's 70, so this must be cheap.
It doesn't work that way. Every market, every sector is different. You need to compare it to the sector to make sure that you do that. Low today is 30.84, 52-week low, 24.10.
No dividend. It's purely a growth stock. That means the stock is an investor. You make money on the price going up. There's no comfort zone.
There's no dividend. However, dividend isn't free money. It's money that they would pay out in growth. They've just taken from the profits to pay the investors. So understand that.
you know, what the difference is. And I've got more information on that later on in the video. Anyway, average volume, 486,000.
It's low volume. And today it's 65,000, which looks potentially lower than average at 19 minutes past nine central time. That looks below average today.
You want to start with high volumes. That way you can get out of the stock if you want to. If it's low volume, you might want to sell, but no one's buying and you might have to reduce the price. before you can sell and exit your position. Anyway, let's move on down.
I've got some news. We're going to cover the news shortly, not this part of the video. That comes up later. The Morningstar analysts, I don't like them.
It's very biased. They're paid to do this. I'm going to give you a much more open, fair review in a moment, but they're saying it's a strong buy.
However, you've got to realize when this was done, it's not. done regularly. And you can easily make a mistake if you just use a very simplistic valuation here. They're saying buy 66%. No one's saying sell.
Okay, great. As you can see, Wall Street are rubbish at analysing stocks. They're paid to do it and they're rubbish at it.
They don't know how to value Tesla for the future because they can't quantify what they don't know. They are traders. They are not people who buy businesses.
They buy today and sell tomorrow. They're always looking for the movement of the stock, not the real value. So I have never really found a really credible, reliable analyst review from Wall Street, to be honest.
You can see that they've missed the expectations by quite a margin. The good news is they got it wrong from the point of view they undervalue the stock. which means it then beat on earnings. Remember, the company don't give an estimate. Well, they do, but these estimates on here, what the expectations are, are done by Wall Street.
They expected it to be lower, and it was consistently up, and they've not seemed to learn from their mistakes. They're still getting it wrong, and the stock then beats. Now, because a stock beats on earnings, as opposed to what Wall Street suggested it would do, doesn't mean to say the stock goes up.
Sometimes the stock... We could beat on earnings and the price go down because it's the guidance of what the company are saying going forward and so on and so forth. But anyway, it's good to see they're beating earnings.
It's one part of the puzzle, but not all of it. And they are making money and they are generally trending upwards. So that looks pretty good. If we look back at the chart, though.
If we see here 2020, a COVID play, I always look at the COVID plays and see how they reacted during COVID. As we see March 2020, not much. It did then rally at the end of the year. I don't necessarily would say that as a COVID play. I do look at that because I don't buy any stocks.
I have very strict rules of how I buy stocks. They've got to tick all the boxes before I touch them. Proprietary, unique, good balance sheet.
good CEO, good management, blah, blah, blah, stocks I'm interested in, business I'm interested in. And one of those things is not a macro condition influenced stock. I don't want to buy anything that popped on COVID and then dumped afterwards because then you're relying on a macro condition to drive the stock price and all the business.
And that doesn't interest me. That is gambling. That is day-to-day trading. And that doesn't get me excited. Okay.
Now then, Clearly, SoFi, if we're talking this sector, this tells me the companies that other investors are buying, the investors of PERI are also buying. OK, so it gives me an idea of how the stock will trade. It gives me a sentiment of who's buying it. And it'll give me an indication of where the stock's likely to go on a day to day basis. Even though I'm not interested in that, I'm buying the business.
It will tell me how the stock will trade. And you know, it can tell me that stock's going to go down a lot before it's going to go up and it's worth knowing, right? SoFi technologies, don't buy it. I like what the business are doing. However, the CEO talks rubbish, doesn't understand the markets at all.
He said that we would get rate cuts all last of year. And he was the only one who said it. He was trying to get attention to his stock.
It worked. He had some volatility. clown. I can't, I can't talk to anybody who, who is a CEO of a company.
It's, it's a money business as well. So fi and doesn't understand how the market works and how the fed works. So the clear, I mean, don't, don't forget anyone can become a CEO. You don't have to pass an exam to be good at anything. Anyone can be a CEO.
I could be a CEO of my own company tomorrow. Doesn't mean I'm good at it and he's not good at it. Uh, he doesn't have a clue. So Um, we've got a very volatile stock here.
Crown strike. I must be honest. I don't know a great deal about that one.
C3 AI. Uh, this one, I made a lot of money from this one. This got massively overbought. Everyone jumped on in because it's, it's, um, AI and Hey, let's all buy it. I made a lot of money from this one.
I got out of it. It's too expensive. It's very volatile.
It draws the wrong type of investor. AMD, the same thing, AMD all over the place, whatever. Taiwan, uh, semiconductor. I do like it.
I prefer on semiconductors. I think it's a better run company. Um, trade desk.
I haven't done a review on it. I don't know. So it's got a bit of volatility there from the point of view of who's buying the stock.
Okay. And as we can see, it's extremely volatile. Anyway, I would want to know if I was buying this company, which I won't be straight off the bat. This is not for me. Um, what happened here?
And then what happened here? So do the research on the news and you can find that out from the investor pages of the website. And talking of the website, let's go and have a look and learn a bit more about the business.
Let's scroll down for every digital dollar, a business solution. Perrin is well positioned to capitalize on shifting digital advertising. OK, let's have a look.
Capture and convince. Right. Well.
digital advertising, and you've got to judge by every piece of information that you find. You've got to judge this. It's important. They are about digital advertising, and yet, and yet, whoever's in charge of their website isn't very good at it.
And that's important. That's important. You expect excellence. I expect my portfolio to outperform the market and beat Warren Buffett, which it always does.
So I expect excellence. I don't expect mediocrity. And whoever designed this website isn't doing a good job. They've used white text over a white background. Now you might go, that's not important.
It is important. It is important because it shows you the management of the company. It shows you how the company are operating.
That is ridiculous. A child would know better than that. Anyway, that's not good.
But anyway, every brand, you can't even read it. You've got white text going over a white background. So I can't even read what they're actually saying there. Anyway, technology solutions for the most complex brand needs. Perrion is focused on the future and has built a tech stack that drives our capture and convince business solutions.
AI and machine learning can be applied to sourcing and optimizing traffic, transforming dumb funnels into smart consumer journeys. Okay, well, a dumb journey would be to basically... not use white text over a white background and sort that out because, um, you know, that's not very clever anyway, whatever. Um, now just want to be full disclosure.
Uh, I am in dark mode. Um, so there is that, however, a lot of people use dark mode before I completely say their website is trash. I need to say. A lot of people use dark mode. So you, again, it's the understanding of the technology that people use.
Maybe if I'm not in dark mode, this might work better. However, I am in dark mode and many people are, and you do need to have an optimized website before anyone goes. I've just looked at it and it's fine.
Um, but anyway, I'm just, I'm just making that point, uh, before anyone says, well, just because you're in dark mode makes a difference. Expect. excellence.
You want my money? I expect excellent management. So far, that's not demonstrated in the design of your website. And in fact, this website looks like it was made on a very basic editing software. And I know because I built my own website.
Let's look at some latest news. This is how they talked to their investors. I have to say I'm not impressed by the website at all. Let me look at their news, though. This is what they have just posted as their latest news.
So let me have a look into this. AdTech, before we go on to the numbers, AdTech company, Perion Network, acquiring Hivestack for 100 million. We want to expand and we are continuing to talk with other companies. We expect that we'll complete another purchase in 2024. said the CEO Tal Jacobson.
Israel company Perion Network has announced the acquisition of Hivestack for $100 million in cash. Perion could pay up to an additional $25 million in cash and equity structured as a three-year employee retention and performance payment plan. Hivestack, headquartered in Montreal, Canada, employs 154 people and it has developed a digital out of home D O O H advertising platform, which aims to transform ordinary public spaces into dynamic experiences, engaging audiences with eye catching personalized content in real time.
Hive stack platform is used by many of the world's largest brands, agencies, media owners, partners, including Uber, Colgate, Lego, and many more. Intercontinental Hotel Group, DoorDash Group, Dentsu, the Trade Desk. That's interesting because Trade Desk was in those stocks. So people buy what they know. Very important to understand that.
People buy what they know, not necessarily because it's good. We are excited about the acquisition of Hivestack with both companies and have advanced our long-term growth strategy. Hivestack DOOH technology platform stands out by offering brands and advertisers what they crave, the most high visibility, creative, precise targeting, immediate impact, wide reach measurement, said Tal Jacobson, the CEO of Perion. In addition to advertising our diversification strategy, the transaction aligns with our objective to expand our technological capabilities and product offerings and will continue to support.
to pursue additional organic growth opportunity. So we're in the advertising business, but I really strongly suggest that you look at your own website. If you're going to advertise for me anyway, that's being said, let's now look at the numbers. Does this business actually make any sense? Is it a good business to buy?
So far it's not for me. The standard isn't where the standard isn't where I want it. Um, I wouldn't put my money into this as, as of now, right?
Let's go into, uh, as you can see, my portfolio is still rising consistently going up again today. Let me just have a quick look at it. Yep.
Looking great. Um, breaking more, uh, all time highs. So very, very good. Very, very happy.
Now we look at the intrinsic value. Some people use this, uh, and it tells them whether they're going to buy or not. You really shouldn't just use intrinsic value.
However, my intrinsic value is far more reliable than what most analysts will use because I'm not paid or sponsored or leaning towards. This is purely running the numbers through a very advanced algorithmic software without any bias at all placed upon it. And it's more honest.
But anyway, I will spend 25% overvaluation on a high growth stock. I've said that before. So the best case scenario, we're undervalued by 13%. Sounds good. But beware, there might be a warning in a moment, which will tell you that it's a valuation trap.
Many people don't read that. They look at the headline. Oh, it's cheap.
I'm buying it. People on, you know, basic software are saying buy it. So they buy it. No, do more work than that. Best case scenario.
We're not in the best case situation right now. Macro conditions, high interest rates. We might move there next year, but got to remember, got to remember, the Fed don't have to reduce rates.
We could hold high for a long time. I'm expecting rates to drop. However, we're not going to get any hikes, no doubt about that, but it might take a long time before they come down. So we're certainly not in this area.
We could be in that. Undervaluation is great, but I am looking at this already and sensing already by just looking at the way the chart goes. that there's going to be a trap here. And let me explain that in a moment.
Worst case scenario, overvaluation. Okay, that I can live with that. Let's have a look.
And there it is. That's exactly as I thought we'd find. I could just tell that by looking at the chart and the volatility and the way the stock price moves. What does this mean?
And this is important to read this. Possible value trap detected. So it sounds cheaper. than it actually is. Manipulation, not from our figures, but manipulation if you only read part of the information.
A value trap occurs when a stock appears inexpensive based on fundamental analysis, but fails to reach its intrinsic value over time. There's no point a stock looking cheap if it never achieves its goals. And bring up to you a new feature that we have on our software.
This will, this will find the latest information from the most recent earnings report, compile it in a, in a, in a accurate way that we can discover what the company is saying as far as projections going forward. In a robust quarter, this is what was mentioned by the CEO and the CFO, chief financial officer at the last earnings. Okay. In a robust quarter, Perion Network reported year-over-year revenue growth of 17%, totaling 185 million. This increase is part of a consistent trajectory reflected by a two-year compound annual growth rate, CAGR, of 24%.
Great. Key performance metrics also showed significant increases, contribution included. TAC went up 19%.
to 77.3 million and operating margins enlarged to 42%. Adjusted EBITDA and GAAP net income both rise markedly by 29% to 42.7 million and by 28% to 32.8 million respectively, while non-GAAP diluted earnings per share surged by 38%. Looking ahead, the most important thing, the company endorses its full year 2023 outlook, projecting revenue to grow by low to mid teen percentages.
Very, very good indeed. Okay. But we've got a valuation trap. It doesn't look as, it's not as cheap as it is.
So anyway. Now then, let's look at the financials of the company. Let's go deep dive into the balance sheet of the company.
So first of all, if we look at the revenue, the revenue is 692 million, up 5%. That's good. And expectations are moving up. We like that.
Operating income, we were flat for a while, we're doing well, and we're expecting the curve to go up. That's good. Net income is up.
Up 2%. That's good. Income is up.
Free cash flow is up 19%. Looking good. All this looks good.
Capital expenditure, we've invested, we're now slowing down. But with the most recent range, we've increased our capital expenditure by 22%. So we are spending more money again.
Operating cash flow up 19%. Balance sheet looking good as long as we don't have too much debt. Let's have a look.
904 million in assets. Very, very good indeed. and 267 million in liabilities. Okay.
Plenty of cash on hand. Most of our money is held in cash. That's good.
Good, strong balance sheet. Liabilities. Long-term debt. Long-term debt. Can't see any.
Can't see any long-term debt at all. And the liabilities are only 267 million, so they're a very lean company. That's good. That's very good. Very good balance sheet.
not going bust anytime soon. I like it. Very, very nice indeed.
And no long-term debt. So, so far, other than a valuation trap, this looks good. I wouldn't buy it though, because I would rather buy Google if we're looking at the advertising sector, but it's looking good. I was put off, wasn't I, by their website at the beginning, but anyway, there you go. Gross margins, 38%, 38%.
Good, and they are increasing from 37% to 38%. Let's just scroll down just a moment, and I wonder if Google is in this list of competition. Let's see if they even regard Google as competition.
Well, they don't, but I'm going to look at it. Let me type in Google and see how their margins compare. All right. So let's go back to Google just a moment.
Look at margins. Scroll down to the balance sheet. Right.
There you go. That's the sort of margins that you want in this sector. 56%. 56%. Let's go back to this company and see their margins are 38%.
Now, what does that mean? And why am I bothered about that? Because the competition can crush you. because your moat isn't that wide, and you could easily lose your position by having margins this narrow.
Now, margin, it sounds good compared to the car sector, perhaps, but a tech company has massive margins. So it's good that they're improving it. It was higher at 56%.
They need it to 58%. They need it to increase because they can be crushed by the competition. Google, for example, could lower prices on advertisement and they could...
you know, that kind of thing and take away your edge if you like. Now, as I said, I'll give you a profitability score. They're not going bust anytime soon.
They're absolutely not. And because they've got a 74% solvency score, no debt, loads of cash, not going bust, one of the highest solvency scores I've seen. However, doesn't make a business worth investing just because it's got cash. I'm an investor.
What I want to do. is give you my money, which you grow and return to me. If you start a business and you've got loads of money, you're not going to go bust because you've got loads of cash.
However, eventually you can spend your cash, but can you turn the cash into profits and thereby return the profits to me, the investor? That has not been proven to happen yet. That's what the valuation trap suggests.
Loads of money. Loads of potential. Now we've got to execute on that. If we look at the profitability score, 67, that's pretty good. Nothing wrong with that.
We're not red. We're not bright green, but profitability score is 67. All the metrics are getting a nice green tick. Now, again, it's important to check.
If we look at Google, see what their profitability score is. Again, the power to crush the competition, the power to reduce prices. Let's go down and look.
There's Google. Profitability score of 73. making a lot more profit, thereby their solvency score is also good, of course. All right.
That's no question about that, obviously. Right. Let's go back and continue our review.
So just because you've got cash on hand and no debts doesn't mean you can make me money. All right. Wall Street analysis, rubbish. They don't know what they're talking about half the time.
They're saying 52% on the upside at best case scenario. We're not that. Perry, Wall Street saying 23% within a year.
Good. You can make 10, 15% at the moment, 20% on the S&P, but that will trim back next year. And on my high growth stocks like Virgin Galactic and other things, I can make a lot more money than that. But nevertheless, pretty good. On the worst case scenario, 1%.
At least you're not losing any money on the downside. But I don't really regard Wall Street as a very good gauge on whether I think the stock's going up or not. Competition, I'm going to give you the link so you can use the competition.
And please do go and do that. I will give you the link at the end so you can compare competition. Ownership, that's where insiders are buying the stock, selling the stock. As we can see, there's been no measurable trading from transactions from insiders recently. The last transaction was made June 27th, 2008. Bloody hell.
And who sold 4.7 million. That was Longview Fund. It's back in 2008. No one's been buying the stock, selling the stock. Now that's actually good. I like to buy before insiders buy.
If insiders are buying, that's great. However, The reason for doing analysis and research is so you can buy before they buy, so I can be in on the stock before they buy. But the wonderful thing is no one's selling either. So that's kind of interesting. All right, let's move down.
Do we have any short interest on the stock? Well, 5%. Let's put that in context. 20% is excessive.
You are now moving towards a short squeeze if there is volume. This stock doesn't have volume. It's also only 5%.
So is that good or bad for the stock? Well, remember when Roaring Kitty defrauded the world and pretended to be somebody else and pumped GameStop, which was a rubbish business, by the way, it was at 100% when it exploded. 20% is why we are now in 21%, 22% Virgin Galactic. We're getting a short squeeze, but it needs to go up to get it to explode.
All right. And I mean, when I say explode, I mean, go up. several hundred percent, not just five, 6% a day.
However, I kind of prefer that it's more stable. However, 5%, what does that mean? There's going to be no short squeeze. It's not enough short interest. We don't have enough volume looking at the day-to-day trading.
However, it's negatively impacting the stock. It's not going to boost it up. It's not at the edge of a squeeze.
It's simply, it's simply bringing the stock down at the moment because of negative sentiment. However, It's not that great. To give you an idea, some of the greatest companies in the world still have some short interest.
Less than a half percent with Apple. No one's short in the company, but there you go. That's where we stand there. Now, Perry, I'm probably going to rank number one in the world with this in five seconds on Google and YouTube because no one's covering it. There are...
No, there is no news. There are no analysis really being done. There's no real discussion going online.
So I do invite the CEO to join me and perhaps educate me further on the stock. Over the last 90 days, there has been nearly all positive sentiment. The last 30 days, negativity has started to creep in.
The last seven days, negativity has become 25%. And today, there isn't any news. There's not a lot going on with this stock.
at the moment. Not a lot of interest, not a lot of people know much about it. Okay, so there we go. There is my initial thoughts on that. Now let me go back over to, as I wrap up this review, back over to here.
For me, it's not a buy because I don't think it's anything proprietary and unique. That's really important. It's in the advertising space, and yet it doesn't understand dark mode on its website and does a terrible job with it. So whoever's running that area isn't doing a good job, and it's not even a good, well-designed website either. So I don't like that.
It has plenty of money on cash. However, it hasn't yet. proved itself that it can actually make money for the investor.
So it's a watch list for me. I'll keep my eye on it, but I'm not buying it. I'll probably never buy it.
I would rather own Google. However, it's not exactly the same company. It's a very different company.
So there's my thoughts. Looking at my portfolio today, as you can see, we are consistently beating the market. consistently beating Warren Buffett at that refresher second.
That's not 16,000 at all. It's more like 72,000 now. There it is, 72. No all-time high once again.
In fact, we're at 73 with my goal that I've taken out for the convertible note. If you click above my head, you'll see all the links to my ex-account where I post my trades before I make them. So you know what I'm doing, my Instagram as well, all my links on my website and all the rest of it.
Down here in the description, you'll see links to AlphaSpread. That's the service that I provide here. And you can use this software.
My members can get a lifetime discount, which will basically make my membership for free. It's the most honest, real, unbiased way to review any stock. And I do all my reviews, and all my reviews will appear on there above CNBC, above Bloomberg, above Mad Money, Jim Cramer. Well, that's easy because he just makes up stuff all the time. And you will see all my reviews.
Over here, I'll put the full list of my alpha spread. I've done about 36 stocks now. They're all on here. And down here, meet the CEO. I'm interviewing all the CEOs from all the companies from the New York Stock Exchange.
Just done a deal with the manager of the floor. And I'll be doing that, hoping to interview Richard Branson, Elon Musk, everybody. We've done our first one last week.
And the journey continues. There you go. If you are a member of my channel, I'll do a full review for you. Click above my head, down here, over here.
over here as always take care of yourselves and each other