Blinkx
To say that tech play Blinkx (LSE:BLNX) suffered an annus horribilis in 2014 would be something of an understatement. The business faced claims from Harvard professor Ben Edelman that its software -- which allows users to find online videos more easily -- artificially bloated hit counts, while concerns over slowing revenues during the summer cast further doubts over the company's business model.
Still, Blinkx's strategic switch from the fading Desktop format to Mobile appears to have reached an inflection point, and the company noted in December's update that revenues and earnings have continued to grow from the summer's lulls. The high-growth Mobile segment now accounts for a fifth of total revenues from around 1% a year ago.
The upheaval of this refocussing is expected to drive earnings sharply lower in the near term, and a 95% decline is currently pencilled in for the 12 months to March 2015. But the firm's bottom line is anticipated to swell thereafter as revenues start to flow in, and growth to the tune of 308% and 38% is predicted for fiscal 2016 and 2017 correspondingly.
At face value, however, Blinkx could still be considered an expensive stock selection -- the business carries P/E multiples of 40.8 times for 2016, although this falls to a much-improved 21 times for the following year. Still, I believe that PEG readouts of 0.1 and 0.6 for these years underline the company's exceptional price relative to its growth prospects. Any figure below 1 is widely regarded a bargain.
