I’ve got a teaser pitch to solve for you, dear Irregulars — it’s from Roger Williams at Wall Street Daily, pitching his True Alpha letter by hinting at the stocks he thinks can double tomorrow in the “Penny Stock Index.”
But first, a quick update on Criteo…
A couple folks called yesterday’s (perhaps brief) crumpling of Criteo (CRTO) to my attention — no doubt because I own it and have written about it a few times. I suggested the ad tech company as a speculative buy a little over a year ago around $30, and doubled my position in March at about $43.
The fall seems, from chatter I can see, to be based on a flurry of panic over the fact that Apple announced they would support ad-blocking in the mobile version of their Safari browser.
Which is pretty silly.
There’s certainly a possibility that a huge new swathe of ad-blocking software would cut into the pool of potential revenue for all the advertising networks, but I’m not panicked. Ad blocking software has been around for about ten years, and it does get better every year and get more downloads and installs every year — about 9% of US internet pages are served up to ad-blocking browsers these days, if the stats I’ve seen are believable (and they’re fairly consistent from different sources), and that rises to fairly high numbers in a few countries, over 20% in some EU countries… it also rises for younger demographics.
I don’t think Apple’s support for ad blocking is going to materially change the advertising market. It’s still not going to be the default for any mainstream browser, and it will be concentrated among the most tech-savvy users… who are, as you would probably guess, also the folks who are least likely to click on ads.
So it’s possible that this could hamper Criteo’s future potential revenue to some minor degree, in my opinion — does that mean it makes sense for Criteo’s business to suddenly be $300 million less valuable, as it was in the trough of the fall yesterday? No, of course not — but this is, to a large degree, a stock built on future dreams and anticipated growth. They are profitable, and estimates have been pretty consistently rising, but the next quarter they’re going to report is also seasonally their weakest quarter, ...