IAC/InterActiveCorp (IAC) Stock: Here’s Why It’s Falling

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IAC/InterActiveCorp (IAC) is headed up in the market in today’s trading session. The company, focused on the tech industry, is presently trading at $219.57 after tumbling -1.98% so far today. When it comes to tech stocks, there are quite a few factors that have the potential to lead to movement in the market. News is one of the most common reasons for movement. Here are the most recent headlines surrounding IAC:

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Mar-17-19 09:00AM ANGI Homeservices’ New CFO Discusses Share Gains, Millennials, M&A and More
Mar-06-19 04:10PM IAC to Participate in the Deutsche Bank 2019 Media, Internet & Telecom Conference
Mar-02-19 12:48PM IAC/InterActiveCorp (IAC) Files 10-K for the Fiscal Year Ended on December 31, 2018
Feb-26-19 02:31PM Tinder goes into Spring Break mode for college students
Feb-22-19 09:51AM Netflix Stock Is Unstoppable Now That Netflix Has Won the Content Game

Nonetheless, when making an investing decision, investors should take a look at much more than just news, this is especially the case in the ever evolving tech sector. Here’s what’s happening with IAC/InterActiveCorp.

Recent Trends From IAC

While a move toward the top in a single session, like what we’re seeing from IAC/InterActiveCorp might cause fear in some investors, a single session fall alone shouldn’t be the basis of a decision to, or not to, invest in a company. It is always important to look into trends beyond a single trading day. When it comes to IAC, below are the movements that investors have seen:

  • Weekly – Throughout the past five trading sessions, IAC has seen a change in value amounting to 4.53%.
  • Monthly – The monthly performance from IAC/InterActiveCorp works out to 1.18%.
  • Quarterly – Throughout the last quarter, the company has generated a return on investment of 23.72%
  • Bi-Annually – In the previous six months, we have seen a performance that works out to 0.54% from the company.
  • YTD – Since the the last trading session of last year IAC has resulted in a return of 19.96%.
  • Annually – Lastly, throughout the last year, we have seen movement in the amount of 35.11% out of IAC. Throughout this period of time, the stock has sold at a high price of -2.15% and a low of 70.47%.

Ratios Worth Watching

Looking at various key ratios associated with a company can give investors a view of just how risky and/or rewarding a an investment option might be. Below are some of the key ratios to consider when digging into IAC.

Short Ratio – The short ratio is a measure of short interest. As the ratio goes higher, it means that more investors believe that the price of the stock is going to go down. In general, strong technology stocks can come with a lower short ratio. On the other hand, we tend to see a lot of short squeezes in the space. Nonetheless, as it relates to IAC/InterActiveCorp, it’s short ratio clocks in at 4.80.

Quick & Current Ratios – The quick and current ratios are tools that measure liquidity. Basically, they measure If a company is able to cover its debts when they come due based on quick assets or current assets. In the technology sector, many companies are heavily reliant on continued support from investors as they work to bring new technologies to market, the current and quick ratios can seem damning. However, quite a few good picks in the tech industry do have great quick and current ratios. As far as IAC, the quick and current ratios work out to 3.10 and 3.10 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the book value of assets owned by the company. In this case, that ratio is 34.01.

Cash To Share Value – Finally, the cash to share value comparison compares the total cash on hand to the price of shares. In the case of IAC, the cash to share value ratio comes to 27.23.

Investors Tend To Follow The Big Money

An interesting fact I’ve learned so far in my brief period in existence has been that good investors tend to follow big money players. In other words, investors that are looking to keep the risk down will keep an eye on moves made by institutions and insiders of the company. So, how does the big money flow as it relates to IAC? Here’s what’s happening:

  • Institutional Investors – As it stands now, institutions hold 98.10% of IAC. Nonetheless, it’s important to note that institutional ownership has changed in the amount of 1.39% throughout the last 3 months.
  • Insiders – as it relates to insiders, insiders of the company currently own 0.90% of the company. Insider ownership of the company has moved 0 throughout the past 3 months.

What Analysts Say About IAC/InterActiveCorp

Although it’s not a smart idea to avoid doing your due diligence and blindly following the thoughts of analysts, it is a smart idea to use their analysis when validating your own before making investment decisions in the technology industry. Here are the most recent moves that we’ve seen from analysts with regard to IAC.

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Mar-20-19 Reiterated Aegis Capital Buy $250 → $300
Feb-04-19 Initiated Goldman Neutral $226
Dec-19-18 Initiated SunTrust Buy
Nov-29-18 Initiated Macquarie Outperform
Oct-11-18 Reiterated The Benchmark Company Buy $204 → $260

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $7.44. In the current quarter, analysts see the company producing earnings in the amount of $0.49. Over the last 5 years, IAC has generated revenue in the amount of $7.10% with earnings coming in at 15.60%. On a quarter over quarter basis, earnings have seen movement of 93.50% and revenue has seen movement of 16.10%.

How Many Shares Of IAC Are Available?

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 82.83M shares of IAC/InterActiveCorp outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, IAC has a float of 76.85M.

I also find it important to look at the short percentage of the float. After all, when a large percentage of the float available for trading is shorted, the overall feeling among traders is that the stock is going to lose value. When it comes to IAC, the percentage of the float that is currently being sold short is 4.67%. In general, high short percent of the float is anything over 40%. Through my work, I’ve calculated that anything over 26% is probably going to be a play that comes with hefty risk.

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