Start eyeing-up the stock price movements of Seattle-based Loudeye Corp. [LOUD]. Loudeye is a digital music provider that boasts a very impressive array of products, services, and qualities, including: being the industry’s foremost provider of digital files; having the world’s largest commercial music archive in .WAV format (over 4.6 million songs); having the most scalable and advanced media operations facility in the industry; having the industry’s leading private labeled digital music solutions; having a dominant digital music samples service ( to the tune of one billion music samples online last year ); a piracy protection service involved in protecting over 75,000 digital entertainment titles (far more than anyone else) and at 99% effectiveness; and, boasting the first wireless digital music services (which were provided to AT&T Wireless [T] and Nokia [NOK]). In Q4 2004, Loudeye announced that it will be providing digital media and content management services to the Music Choice music network. Earlier this year, it announced that its OD2 services have launched a customized digital music store for Migros Electronics, one of Switzerland’s largest retailers.
Earlier this year, the company appointed Michael A. Brochu as president and CEO. Brochu has formerly acted as president and COO of Sierra On-Line Inc., and during that tenure he led Sierra’s better-than-300% growth in revenues which culminated in the sale of Sierra On-Line to CUC International for $1.1 billion in 1996. Brochu is convinced that Loudeye “has developed a unique position” in the “transformative shift affecting the global digital media” world that shall “help create value for retail partners, content owners, consumers, and our stockholders.”
This former financial advisor is likewise convinced. The company’s products and services are strong, and these things reflect a clear focus that doesn’t have the company jam spread too thin. It is in one of the right industries at the right time. Now it is captained by an experienced and proven profitability-maker in that industry. The free cash flow reported by the company has been starting to look a little sexier in recent times, too.
For investors who like tech stocks and are not adverse to some wild price fluctuations and some calculated risk while seeking long(er)-term aggressive growth, this is a stock to buy now. I can loudly foresee the digital “pop” coming for Loudeye.
Turning from the digital to the physical…what’s that saying about the value of real estate? It comes down to location, location, location. Delta Petroleum [DPTR] is an independent oil and natural gas exploration and production company based in Denver, CO that has holdings in a lot of the potentially valuable real estate. Its claim-stakes are found in the Wind River, the Piceance, the Denver-Julesburg, the Louisiana, and the South Texas Basins. Also significant are its offshore holdings in California near Santa Barbara and its half-interest and operations in approximately 200,000 acres of the Columbia River Basin, prospectively valuable areas as sources of fresh oil reserves. In addition to its significant land holdings, Delta spent the last couple of years, from 2002 to now, acquiring the oil and gas assets of Castle Energy and Alpine Resources.
Within the last year to two years, Delta has vastly increased its total capital expenditures (in fact, from Q2 of 2003 through Q2 of 2004, capital expenditures increased more than tenfold). While this sharp spike in “speculative” cash layout might reasonably throw up red flags to many potential investors, this writer in particular does not think that this activity need be as much cause for concern as for portfolio consideration. To this former financial advisor’s eyes, these expansion activities are likely a sign of great growth and profitability to come. For one thing, Delta’s net tangible asset amounts are way, way up in that same time. For another thing, the amount of shares of stock sold by the company in that time sailed beyond the empyrean compared to what it had been, while the company’s borrowings weren’t inordinately increased . The company is finding ways of generating capital flow, and its officers and management are very confident about the effort- -they own 43% of the company’s stock at the time this story is written. Its resources and its strategic positions for future exploration and development of oil reserves make it look like it could be long-term rockin’-and-rollin’, especially since long-term there is little hope of oil prices falling back to and remaining at what they once were in the glory days.
But here is perhaps the most salient point for investment consideration: Alternative energy is getting serious interest and backing from investors and potential developers at long last. Analysts have estimated that already by 2013, the alternative energy sector will have risen from its present $13 billion business to being a $92 billion business. Delta’s stakes in natural gas should allow it to be in position to make the transition from the dinosaur economy of fossil fuel dependence to the New Economy of lush, green alternative (to oil, that is) energy givers without it- -or its shareholders- – suffering future shock (natural gas futures are now, overall, double their value of the late 1990s).