VeriGood VeriSign

There have been three earnings releases recently that affected me: eBay, VeriSign and Google. My assessment was that Google's was OK, eBay's was good and VeriSign's was excellent.

News that VRSN is being added to the S&P500 and a solid earnings release has resulted in a recent 10% SP rise, although it has fallen off in the last few days along with the rest of the Internet sector.

What really impressed me in the conference call was the way Dana Evan, the CFO, just mentioned in passing that VRSN had purchased 9% of its float in 2005. 9%!!!!. And it still ended up with more cash in the bank at the end of the year than at the start. I would have been tempted to plaster that 9% figure all over the front page of the earnings release.

VeriSign's Internet Service Group is growing at 20% at the moment. In 2007 when they are allowed to raise the prices for .com and .net renewals this figure could accelerate. The problem is the Jamba!/Jamster product line where revenues are all over the place. Once Jamba! revenue returns to steady growth you suspect that the share price will start testing the early 2005 levels of $30+.

VRSN is on a 2006 PE of 21. This is pretty reasonable in my book for a company of its qualities.

VeriSign has become one of my favourite companies. I would rank it way above Google and slightly behind eBay. Just wait until Jamba! gets going again!