Moneysupermarket.com Group - 51p

Many readers may be regular users of moneysupermarket.com and travelsupermarket.com, which are leading price comparison websites.

Although the company which owns these sites, Moneysupermarket.com Group, is a constituent of the FTSE Mid 250 it is not particularly high profile as an investment opportunity. This is surprising given the brand recognition of the company’s key businesses and the field in which it operates.

It generates its revenue through the leads that it passes on to product providers.

Payment is made either on a cost per click or cost per action basis or a combination of the two methods.

This means that the number of visitors is essential and this increased by 32 per cent in 2008 to over 120 million.

Significant investment has been made in innovation and product development.

Moneysupermarket.com should provide product providers with a cost effective distribution channel.

In the year to December 31, 2008, revenues rose from £162.9 million to £178.8m, although an operating loss of £54.5m was reported as a result of a goodwill impairment of £70m.

The level of revenues is forecast to dip this year, but pretax profit of around £30m is expected for 2009.

This could mean that earnings per share are less than 4p, which on the surface means that they may not look particularly cheap.

However, the balance sheet is sound. At the end of 2008 cash balances were £73.5m and there was no debt.

Confidence was shown in the future by a maintained final dividend of 2.2p per share for 2008, which brought total dividends for the year to 3.5p per share. The cash position should ensure that the dividend will be at least maintained going forward.

At the current price the shares yield almost 7per cent and that is more than good enough to attract investors seeking income given where interest rates currently stand.

In summary, Moneysupermarket.com Group is an innovative business which looks good value.

The relative lack of track record means that the shares are not without risk, but the yield should provide good support for now and over the medium to long term there is plenty of room for growth.

We rate the shares as a speculative buy.

WARNING: Opinions expressed are the writers’ judgments at the time of writing. The information does not constitute a personal recommendation and readers should seek their own professional advice as to the suitability of the investments.