This Stock Could Enjoy an 80% Increase in Gross Profit Margin

Investment and Company Research
Opportunity Research
MICROCAP HOT TOPICS
 

 

March 18, 2015

LiveDeal to Enjoy Greater Operating Leverage in 2015

New Initiative Could Increase Key Products' Gross Margin by 80%

LiveDeal, Inc. (NASDAQ – LIVE – $2.95 – Spec Buy) recently announced that its Modern Everyday Inc. subsidiary will soon begin to manufacture some of its high-demand products. This forward-thinking strategy will likely result in substantially higher gross margins on these products as compared to the typical profit margins associated with stand-alone product distribution. In fact, management noted that gross margin could increase by as much as 80% on these product sales.

This new approach transforms Modern Everyday Inc., and thus LiveDeal, into a vertically integrated entity that could eke out greater revenue, as well as profit, according to the Company. Plus, the manufacture of its own products could lead to better pricing control from production to sale and ensure greater product availability. Investors may also benefit from this initiative since valuations for companies that produce products tend to be higher than pure distribution entities.

Since the acquisition of the subsidiary in August 2014, the company has been a very good investment for LiveDeal. The Modern Everyday subsidiary traces its roots to 2008 and began focusing its efforts on the household and housewares markets in late 2012, with increasing success in its California-based retail location and its online marketplace. 

LiveDeal recently released its fiscal first quarter 2015 financial results and it illustrated a nearly 1200% quarter-over-quarter increase in sales to roughly $8 million.  It will be interesting to see how the success of this new approach affects the potential production of other goods ModernEveryday.com currently sells, thus enhancing LiveDeal's overall financial performance later in the year. 

For more information, refer to our previous sponsored LIVE Reports, Updates and Hot Topic Articles by visiting http://www.GoldmanResearch.com/

Senior Analyst: Robert Goldman

Rob Goldman founded Goldman Small Cap Research in 2009 and has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

Analyst Certification

I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

Disclaimer

This Microcap Hot Topics Article was prepared for informational purposes only.

Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select format reflects the Firm's internally generated stock ideas along with economic and stock market outlooks. Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored microcap research ideas that typically carry greater risks than those stocks covered in the Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Research reports on profiled stocks in the Opportunity Research format typically have a higher risk profile, and may offer greater upside. Goldman Small Cap Research was compensated by a third party in the amount of $600 for a research subscription service. To date, Goldman Small Cap Research has been compensated $15,100 for investment research services. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information published by the Company, or other firms. Goldman Small Cap Research relied solely upon information published by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Statements herein may contain forward-looking statements and are subject to significant risks and uncertainties affecting results.

Separate from the factual content of our articles about the Company, we may from time to time include our own opinions about the Company, its business, markets and opportunities. Any opinions we may offer about the Company are solely our own, and are made in reliance upon our rights under the First Amendment to the U.S. Constitution, and are provided solely for the general opinionated discussion of our readers. Our opinions should not be considered to be complete, precise, accurate, or current investment advice. Such information and the opinions expressed are subject to change without notice.

A Goldman Small Cap Research report or article is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed. This publication does not take into account the investment objectives, financial situation, or particular needs of any particular person. This publication does not provide all information material to an investor's decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA, the U.S. Securities and Exchange Commission or with any state securities regulatory authority.

ALL INFORMATION IN THIS REPORT IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com