February 9, 2005
SpeculatingStocks.com Stock Pick: GuruNet Corporation (GRU)
Stock Price: $20.51 (reiterating long-term strong buy)
We originally first released GRU as a stock pick at $8.40 on January 14th with a 6-12 month price target of $30. GRU hit $28.50 on Monday already coming close to our target. We reiterated GRU as a long-term strong buy on January 31st at $13.15. Over the last two trading days, GRU dropped $8 correcting from its fast-paced climb higher, also 1.87 million shares were released after holders exercised their warrants.
There are now 6.44 million shares outstanding, over a 40% increase. This increase in supply could have easily caused GRU to fall as much as it did today. The good news is that the selling should be just about over and GRU shares have traded heavily over the $20 level circulating them into much stronger hands. The company raised $12 million cash from the warrants.
Forbes recently proclaimed Answers.com "The Best Internet Innovation In Years". The company announced today through their conference call that they will continue to work with the media to spread the word. Answers.com is now ranked 522 out of all websites. At the end of 2005, we expect many magazines to call Answers.com the best technology of 2005. By that time, GRU could be over $100.
Just use Answers.com. It is apparent that their answer engine has tremendous use.
GRU still has a low market cap of $132 million compared to ASKJ at $1.4 billion. We expect Answers.com traffic to exceed AskJeeves.com within the next two quarters.
The company stated during the conference call that advertising revenues were rising daily.
SpeculatingStocks.com Target Price: We are raising are target to $75 for GRU by the end of the year.