MAMA – Q4 2006 Earnings

By: ispeculatornew
Date posted: 03.11.2007 (12:00 am) | Write a Comment  (0 Comments)

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MAMA – Mamma.com Inc. (Nasdaq) (Closing Price on Friday 3/9/07 – $5.19)

Mamma.com announced fourth quarter results on March 7 and surprisingly they managed to report a small profit. However, the stock is still way overvalued based on any fundamental valuation and I would recommend to continue holding your short position.

Mamma.com reported a profit of 0.03 on revenues of 3.57 million. This is a stark contrast to the losses they posted in the previous year but I it remains to be seen whether they can become consistently profitable. Even if they were to make the same amount each quarter next year, which is doubtful, MAMA would have a PE of 43 with Friday’s closing price. That is extremely high.

It seems in today’s market stocks are jumping up more than they should and they are staying at inflated prices longer (MAMA is a perfect example). Therefore, I wouldn’t recommend taking a new short position in MAMA. I think there are better investment choices elsewhere. However, if you already have a short position in MAMA I would continue holding it.

Disclosure: I am not shorting shares of MAMA.

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