Do you still sign on to your e-mail account to send messages to
friends? If you do, you're probably over the age of 30.
According to a
recent article in the New York Times
, the next generation, especially college students, find e-mail to
be "boring" and don't use it on a daily basis. College professors
have had to make it a requirement that students check their e-mail
every day in order to get students to use it.
What do college students use to communicate? Text and social media.
According to the New York Times, Reynol Junco, an associate
professor of library science at Purdue, tracked students computer
habits and discovered that during a semester they spent an average
of 123 minutes a day on a computer. The largest portion, by far,
was on social media, which ate up 31 minutes.
E-mail and looking for content via search engines like Google came
in at the least amount of time. Content searching took up just 4
All those parents who are reserving their newborn child's name on
Google's gmail, might be doing it for naught.
People are using private messaging on Facebook to message groups of
friends and Twitter to make weekend plans. Who hasn't seen the
tweets that say, "I'm coming into town this weekend. Who wants to
get together?" sent to friends or followers for all to see?
Communication via social media is quickly replacing e-mail the same
way e-mail replaced paper letters.
What is Social Media?
A lot of different companies get lumped into "social media."
According to Wikipedia, social media is defined as the "means of
interactions among people in which they create, share, and/or
exchange information and ideas in virtual communities and
Obvious examples of social media companies include Facebook,
LinkedIn, Yelp and TripAdvisor. When Twitter goes IPO later this
year, it will rival Facebook and LinkedIn in global reach and
But there are other companies that are not on everyone's radar but
that are players in the social media space. Investors should be
keeping these in mind as a way to play the social media space.
3 Secret Social Media Stocks
2. MeetMe, Inc.
SINA may not be a "secret" but with Twitter and Facebook restricted
in China, it would be wrong to overlook the Chinese social media
SINA is a Chinese online media company which operates SINA.com,
which provides entertainment and information, and Weibo.com, a
popular microblogging site which is China's equivalent of Twitter.
In the second quarter, revenue rose 20% year over year. SINA is
leveraging Weibo's traffic growth to develop social and mobile
advertising. In the quarter, Weibo advertising grew 209% to $30
million, but that is still far under the total advertising revenue
in the quarter of $120.6 million.
Earnings are predicted to grow 157% in 2013 but it's still expected
to make just $0.08. In 2014, analysts see significant gains,
however, as earnings are forecast to jump 1668% to $1.42.
Still, with shares soaring over the summer, it is trading with a
nosebleed P/E of 1014. It's clearly a bet on the future. SINA is a
Zacks Rank #3 (Hold).
2. MeetMe, Inc.
MeetMe is a micro-cap company that makes social games and apps.
Headquartered in Pennsylvania, 60% of traffic comes from mobile. It
operates MeetMe.com and MeetMe apps on iPhone, iPad and Android in
In the second quarter its revenue jumped 21.5% to $9.5 million.
Mobile revenue was at an all-time high of $2.6 million, up 98% year
Still, the company saw a loss of $0.05 a share in the quarter. It
isn't expected to be profitable in 2013 but is forecast to see a
$0.02 profit in 2014.
MeetMe is a Zacks Rank #3 (Hold).
Shares have actually been sinking in 2013.
Many of you may be familiar with IAC's brand of websites and not
even know it. IAC is a media and Internet company with more than
150 brands and is the leader in online dating with Match.com,
OkCupid, OurTime.com, Meetic and ParPerfeito and an investment in
Zhenai, a leading matchmaking company based in China.
It also owns About.com, HomeAdvisor.com and Vimeo.com. It gets a
billion monthly visits from 30 countries.
In the second quarter, IAC beat the Zacks Consensus Estimate by 2
cents as revenue rose 17% year over year. It was the second
consecutive earnings beat.
Earnings are expected to be up big in 2013, rising by 82.3%. In
2014, analysts still see double digit growth of 16.5%.
Shares have been on fire in 2013, hitting a 2-year high. But they
trade with an attractive valuation of 15.9x. IAC is a Zacks Rank #3
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IAC/INTERACTIV (IACI): Free Stock Analysis
MEETME INC (MEET): Free Stock Analysis Report
SINA CORP (SINA): Free Stock Analysis Report
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