Last October, before I joined Geosign, I set up my own blog using an internet provider where I live. Part of the yearly deal included some software for creating your own web sites. The product was NetObjects Fusion, and although very interesting, I decided to use Word Press instead. This morning I was searching for a tech stock to blog about when I came upon Website Pros (WSPI), a profitable Florida-based company that offers small and medium-sized businesses the tools to get their online presence up and running quickly and efficiently. Ok, so this isn’t a story about atom splitting technology or something equally mesmerizing; but it does talk about a company that is providing helpful products and services to the backbone of America, the independent businessperson. In other words, the little guy.

The company’s business model is simple. Offer prospective clients the basic tools to get online and then sell them on additional products and services that further enhance their online presence. For anyone web savvy, their offerings probably seem crude and rudimentary, but for the average Jack or Jill, they’re a lifesaver in terms of time and money. That’s the value proposition here. Website Pros offers the largest number of options at the lowest possible price. Their financial numbers indicate the business model works.

Here is a short list of things to like about the stock:

• Sales have gone from $17 million in 2003 to $52 million in 2006 – an increase of 45 percent annually.
• Operating income in the same three-year period went from a $1.3 million loss in 2003 to a profit of $3 million in 2006.
• A gross profit margin of 56 percent in 2006, up from 50 percent in 2003.
• Sales in the first quarter were up 46 percent.
• The operating income in the first quarter was up 230 percent.
• Management own 19 percent of the outstanding shares.
• Long-term debt is negligible.
• Zacks, a well-known investment research company, had positive things to say about the company in April.
• Back in November, shares dropped 26 percent on lower than expected growth. They’ve gone sideways since even though sales recovered in the fourth quarter 2006 and the first quarter 2007.

Website Pros is building a sustainable model for growth. The number of small and medium sized businesses will continue to increase as more people decide to go out on their own, free of the corporate umbilical cord. With this decision comes the need for an online presence and I believe that the company has made great strides in the past 12 months to attract new customers and retain existing ones. Should they execute in the coming months, there is no reason this stock shouldn’t be in double digits.

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