September 27, 2005
SpeculatingStocks.com Stock Pick: InsWeb Corporation (INSW)
Stock Price: $4.36 (long-term strong buy)
InsWeb Corporation operates an online insurance marketplace that enables consumers to comparison shop online and obtain insurance company-sponsored quotes for a variety of insurance products. Insurance quote offerings include auto, term life, health, homeowners, renters and condominium.
InsWeb Corporation reported second quarter revenues of $6.6 million, up 96% from the same period last year. Transaction fee revenues are growing most rapidly for auto and term life insurance. Their term life revenue model was just switched to a commission-based model instead of lead based and is expected to generate significantly more revenue on a long term basis.
The company did lose $1.1 million last quarter; however, operations can be easily sustained with the $13.4 million in cash on the balance sheet. Marketing cost to the company is $2.66 per customer, while total revenue per customer is $5.00.
As insurance premiums move higher due to catastrophes, consumers will surf to insweb.com to compare and find a better rate.
INSW is a bargain at only a 17.63 million dollar market cap. INSW has more than doubled since early November last year.
SpeculatingStocks.com Target Price: We expect INSW to reach $6.50 within the next 3 - 6 months, possibly much sooner.