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No Balking after the Balkans - VELT 87.5% Off High

July 13, 2013 | About:
Sally Jones

Sally Jones

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It’s a brave new world where someone has got to track Android advertising dollars, namely Velti PLC (VELT). But despite new developments at Velti (VELT), billionaire investor trading activity has been in the doldrums since the end of first quarter of 2013, according to GuruFocus research. Since the company’s dismal foray into the Balkan region and subsequent pull out, VELT has been in a low. This week the GuruFocus 52-week low Value Screen reveals that Velti PLC (VELT) is still 87.5% off high, now priced at $1.30, down from a 52-week high of $10.43.

First organized in Greece in 2000, Velti PLC is a global mobile advertising and marketing company that generated not only buzz but revenue fast. Developing interactive campaigns for mobile operators, Velti PLC (VELT) remains at the forefront of mobile marketing and advertising in the mobile revolution around the world in more than 30 countries.

Considered an early leader in the rapid-growth mobile advertisement industry that projects industry growth at $24 billion by 2016, Velti PLC made a wrong turn by entering the Southeastern European market. Apparently, no one asked about the collection cycle in those countries before setting up shop. The company soon discovered the difficulty of doing business in countries where the collection cycle is not a standard 90 days but more like 300 days, enough to impact the venture. Velti decided to sell those businesses late last year and turn its focus to business in the US and UK, as well as China where it's poised to play a lead role in the country's mobile revolution. In January 2012, Velti PLC acquired the largest mobile advertising exchange in China called CASEE.

Velti PLC (VELT) continues to capture major deals with globally-recognized brands, including Disney, Unilever, American Express, Ford, AT&T, Panasonic, Vodafone, Coca Cola and others. In June 2013, Velti announced a partnership with Toyota and Saatchi & Saatchi LA to optimize mobile media campaigns by utilizing Velti's new advertising platform. What is mGage Advertise exactly? It’s a mobile platform that helps advertisers gauge campaign performance as mobile continues to explode and fragment. “This ability to determine which media partner is delivering the largest quantity of conversions, and qualifying these events with site analytics in real-time, is unprecedented in mobile,” according to a Velti press release.

The largest mobile marketing provider listed on Nasdaq, Velti PLC (VELT) has a current market cap of $117.55 million, and a P/B ratio of 0.70. The company reported $189.2 million in revenue for fiscal year 2011, and revenue of $270.3 million in 2012, an increase of 43% from fiscal year 2011.



Velti PLC (VELT) reported its first quarter 2013 revenue of $41.0 million, a decrease of 21% from the same quarter in 2012. The company had a GAAP net loss of $156.4 million and diluted EPS of ($2.38) during the first quarter compared to a net loss of $8.8 million and EPS of ($0.14) for the first quarter in 2012. Velti incurred a non-cash charge of $133.1 million related to the write-down of substantially all goodwill and other intangible assets. The company’s adjusted net loss of $18.1 million and adjusted diluted EPS of ($0.27) is compared with an adjusted net loss of $1.1 million and adjusted diluted EPS of ($0.02) for the first quarter of 2012.

Alex Moukas, Velti’s chief executive officer, stated, “We believe that through a host of significant operational changes made to our business, including a reduction of more than 20 percent in headcount, as well as more stringent cost controls throughout our organization, we have further strengthened our ability to generate improved free cash flow and adjusted EBITDA for the year…2013 will be a transitional year as we continue to optimize our business around strategic geographies and accounts, being selective about the revenue opportunities we pursue. We are beginning to see success in achieving a more optimal distribution of our revenue, aligning with our business goals. In total, 65 percent of our first quarter revenue came from Americas and Western Europe.”

Here are the details of the Guru trades and ownership of Velti PLC.

Check out the GuruFocus special feature 52-week low screener. This special feature helps you find the stocks hitting new lows but are still held by top investor Gurus and Insiders. If billionaire Gurus own these stocks and are still increasing their positions, it means that they believe the stocks are undervalued. Researching these stocks may help you find deep valued stocks.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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