United Online (UNTD) Higher After An Analyst 'Pounds-the-Table' On the Stock

June 1, 2009 1:13 PM EDT

Shares of United Online (Nasdaq: UNTD) are seeing a nice 7% boost today after an analyst at Broadpoint.AmTech initiated coverage with a Buy rating and $12 price target.

Broadpoint.AmTech analyst Yun Kim said shares are significantly undervalued given the company's current monetization efforts and the intrinsic value of its online assets. Investors are agreeing with Kim's analysis, today, pushing the stock closer to his $12 price target. Even with today's pop, there remains 75% upside to Kim's price target.

Kim is positive about UNTD's online assets including Classmates.com and the recently acquired FTD business, stating "with extensive online marketing expertise, UNTD has proven that a successful online business model can be built on monetizing non-search traffic by charging fees for premium access, a trend we believe will soon be followed by others in the industry."

Kim notes that Classmates.com is growing at a double-digit rate and its margins have been expanding. He thinks a potential spin-off of this business could serve as a positive catalyst.

Kim also notes the stock's solid 6.3% dividend yield, paying you to hold the shares.

Kim said many investors have yet to recognize the value of UNTD. We think he's right!

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