Constant Contact (CTCT): Fast-growing email experts

By Timothy Lutts, Editor of Cabot Stock of the Month
From Cabot Wealth Advisory 4/4/11 Sign up for free Cabot Wealth Advisory e-newsletter

Constant Contact (CTCT) is a company that helps more than 415,000 small businesses, associations and nonprofits connect with their customers.

The medium is email.

The tools include customizable templates to aid in email creation, tools to import and manage contact lists, and email tracking and reporting tools to analyze overall campaign effectiveness.

Constant Contact helps companies avoid being treated as spam, helps them avoid ISP volume limits, and generally helps them understand what happens to their email after it’s sent.

(I know a lot about this stuff, because that’s part of what we do at Cabot … though we don’t use Constant Contact.)

And the results have been terrific!

In fact, Constant Contact has grown in every year of the past decade, and in the Great Recession, it didn’t even blink, growing 73% in 2008 and 48% in 2009. Last year it grew 35%, posting revenues of $174 million.

And the bottom line has begun to fatten up nicely, with profit margins hitting a record 11.2% in the thirds quarter of last year and then 9.3% in the fourth quarter.

This year, the company has added new features that integrate with Facebook and Twitter, promising that the company will maintain its leadership in the age of social networking.

Looking forward, analysts are projecting that earnings will grow 68% in 2011 and 39% in 2012, but I find those analysts are typically conservative.

And most important to me is that the stock is hitting new highs!

Constant Contact was first recommend by Michael Cintolo, editor of Cabot Top Ten Report, back on December 13, when it was trading at 31.

Mike recommended buying between 27 and 29, and his subscribers had many chances to do that, as the stock built a textbook base over the next three months.

And patient investors have been rewarded, as the stock broke out—on big volume—two weeks ago and blasted ahead to new highs.  Notable—at least to me—was the fact that there was no news to account for the strong performance.  That tells me there’s something good that most investors don’t know about yet, and I like that.

So you could just step in and buy it here.

You could be patient and wait for a better buying opportunity, perhaps a pullback of a few points away from resistance at 35.

Or you could take a regular subscription to Cabot Top Ten Report so you can get twice-weekly emails about lots of companies like Constant Contact.

For your own financial well-being, I recommend the latter. For details, click here.

Tim LuttsTimothy Lutts

President, Chief Investment Strategist, Editor of Cabot Stock of the Month

Timothy Lutts heads one of America’s most respected independent investment advisory services, publishing eight newsletters to more than 165,000 subscribers around the world. Tim leads a dedicated team of professionals who serve individual investors with high-quality investment advice based on time-tested Cabot systems. Under his leadership, Cabot has been honored numerous times by both Timer Digest and the Hulbert Financial Digest as among the top investment newsletters in the industry. Tim also edits Cabot Stock of the Month.