Skip to main content

Aloha from Hawaii...

Aloha, everyone! After several years of sticking close to home, the whole family fled the freezing Northeast and hit Hawaii for a well-deserved vacation. For those of you who are still shoveling snow, you have my sympathy.

When I introduced the new TradingStockAlerts Free Stock Screener, I mentioned that I'd soon be away from the office and that data on the new screener and on Trade-Radar would be going stale while I was out of the office. As it turns out, I have been able to update the data on both sites on the usual schedule thanks to a neat piece of software from a company called LogMeIn.

Background --

LogMeIn provides solutions that allow you to remotely manage computers. In my case, I have a laptop in Hawaii and I am able to control the computer in the office that runs all the Trade-Radar analysis programs. I install a piece of software on the office computer which runs as a service. It waits for a request to access the computer and handles security (a password is required and encryption is used) and the managing of the keystrokes and screen views. On my laptop, I use a Firefox plugin that handles the other end of the security and displays the screen on the office computer. It was super simple to sign up, get the software installed and then to use it as needed.

LogMeIn utilizes the "freemium" business model. They have a free account that allows you to manage one computer. During the trial period, full functionality is available. This includes file transfers, desktop sharing, using the printer, listening to MP3s, collaboration, computer monitoring, maintenance and alerts. In the Pro version, you can access thousands of remote computers. After the trial period ends, only basic single computer access is allowed. The expectation is that users will eventually want to upgrade to the paid premium plans. This upgrade path is where the company's revenue growth will be derived.

The financials --

Whew, this company is expensive! Some common valuation measures are sky high: PE over 55, PEG is 2.36, price-to-sales is over 10, enterprise value to EBITDA is over 45.

On the other hand, the company might very well be plugged into a niche that is ready for strong growth and, as has often been said, growth is often not cheap.

The niche --

The idea of controlling computers remotely is not new. It is something that network and PC administrators in large enterprises have been doing for ages. What is interesting about this niche now is that the surge in personal, portable computing platforms could really increase the demand for this kind of service.

With smart phones and tablets becoming pervasive, people are more connected than ever but, so far, these devices can't do the heavy lifting that a real PC or a server can do. Editing big Word docs or presentations, for example, are things that thus far aren't really viable on most of these kinds of devices. Similarly, modifying a piece of software requires a full development environment, something that would be extremely difficult to implement on an iPhone or iPad.

Conclusion --

LogMeIn offers simple remote PC and server administration for professional enterprise system admins as well as similar capabilities for individuals. Want to edit a PowerPoint presentation from your iPhone? LogMeIn can help with that. Want to run a batch program from your iPad and then check the results before sending output files somewhere? LogMeIn can help with that, too. The fact that the company is targeting individuals and their personal computing needs is what sets the company apart from the companies that are more focused on the enterprise market. The growing need of the personal segment to be able to access more powerful computing platforms from a phone or tablet plays to the company's strength.

It will be interesting to see whether the niche expands as strongly as my analysis suggests it might. If I'm right, LogMeIn and its competitors have a bright future.

Disclosure: no positions

Comments

Popular posts from this blog

Time to be conservative with your 401K

Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...

The Trouble with Trend Reversal Indicators

Many of us use various trend reversal indicators to time our trades. Our desire is to determine when prices have changed direction so that we can ride the new trend. Why doesn't it always work out? The first reason, of course, is that unforeseen events often drive prices in unexpected directions. That is something we can't change and it often makes all of us technical traders crazy. On the other hand, sometimes an unforeseen event is a prelude to a new trend. A stock spikes up on a what seems to be a one-time piece of good fortune and soon falls back. Does it start making its way back up or does it resume a previous down trend? The conflict within trend reversal indicators is that, though they can definitely tell when prices change direction, they suffer from two problems. One, they often can't determine how significant that move in prices actually will be. Two, they are often lagging indicators. As such, they can be late in providing a signal, sometimes leading the investo...

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what...