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Though it is up only 7% on a

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investora2z   Saturday, 06/22/13 07:36:38 AM
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Though it is up only 7% on a 52 week basis, it has shown a good 20% appreciation from its 52 week low made in January. So the short term investors may not be complaining. Even on a longer term, the stock has tripled since May-June 2009. The revenue growth has been good, and the company has done well on the net income recently. In the last quarter, the revenues had grown by 15% and the net income had increased by 55%. It recently ventured into the daily fantasy sports by investing in DraftStreet, a smaller company engaged in the shorter version of the game. The daily fantasy sports wagering segment is picking up fast with smaller players like MGT Capital Investments (MGT) committing funds. Bigger players like Yahoo (YHOO) and Comcast (CMCSA) have also invested money. Comcast invested $11 million in Fanduel.com through its venture capital arm. MGT has invested in Fanthrowdown.com, which is more focused on the daily segment. The concept of instant gratification in the shorter version is catching up, and is expected to show exponential growth over the next few years. DraftStreet had already got funding from Atlas Ventures recently. IACI will surely benefit from the growth story as it has entered at the initial stages. As per estimates, on an average a site takes 10% cut in the prize money. However, the benefits may be visible over the longer term as the exposure taken by IACI is indirect. The forward P/E of 10 (fye 2014) and PEG of 0.39 do indicate that the valuations remain reasonable, and there is expectation of growth over the next few years. If the fundamentals support, the growth in stock may be better in 2013. Of course, the underlying assumption is that the market will remain sensible and there are no negative surprises from the company.

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