Europe fights Google, Atrinsic readies launch

Google Inc. (GOOG)’s changes to its privacy policy don’t meet European data-protection standards, France's National Commission for Computing and Civil Liberties said after a preliminary analysis. This could not have come at worse time for Google that's in a race with competitor Atrinsic Inc (ATRN) said to debut its latest product, also on March 1, known as "Spyder." The Wall Street Journal shows, "The company develops marketing media networks... consisting of proprietary content and licensed media to attract customers, corporate partners and advertisers." 

  

The tussle between Google and European privacy regulators comes at a delicate time for the search giant, whose business model is based on giving away free search, email, and other services while making money by selling user-targeted advertising, according to CNBC. Similarly, Atrinsic increases market share by helping users acquire more customers, more cost-efficiently while providing the highest level of brand protection.

In January Google stated it was simplifying its privacy policy, combining 60 guidelines into a single one that will apply for all its services, ranging from YouTube, Gmail and Google+.  

 

This will also allow the web search giant to pool all the data it collects on individual users across its services. Google has said this will help it better tailor search results and improve services although users cannot opt out of the new policy if they want to continue using Google's services. 

On March 1, Atrinsic launches "Spyder," a state of the art marketing tool that prioritizes data management of over 100 million websites. It would not come as a surprise with "Google's one company a week" purchasing frenzy to take notice of potential streaming revenues.

 

Finding Quality Value Stocks That Missed The Rally

I hate being late to the party. The recent stock market has rallied, which is bad news for buyers of stocks who now face higher prices and often higher valuations. Have prudent investors seeking attractive valuations been left high and dry? No-- fortunately not all stocks have rallied, leaving many quality companies with attractive valuations.

Finding Quality Value Stocks Which the Rally Left Behind

Consider the following stocks which are down over the past 12 months and trade at attractive valuations:

Ticker	Company	Performance (Year)	P/E	P/S	P/B
AEO	American Eagle Outfitters	-7.4%	14.91	0.9	1.98
ARLP	Alliance Resource Partners	-4.9%	8.71	1.42	4.18
BGFV	Big 5 Sporting Goods Corp.	-14.9%	12.33	0.22	1.23
CMC	Commercial Metals Co.	-0.6%	0	0.19	1.33
CSH	Cash America International	-0.4%	10.95	0.88	1.5
DV	DeVry, Inc.	-3.8%	11.01	1.14	1.82
GME	GameStop Corp.	-5.2%	8.33	0.32	1.06
GPI	Group 1 Automotive Inc.	-1.1%	14.76	0.19	1.44
HGG	hhgregg, Inc.	-17.4%	10.85	0.19	1.41
INTL	INTL FCStone Inc.	-0.6%	13.86	0.01	1.49
KR	The Kroger Co.	-2.3%	12.13	0.15	2.74
MGLN	Magellan Health Services	-1.4%	11.99	0.49	1.58
NAFC	Nash Finch Co.	-1.7%	8.44	0.07	0.87
NEU	NewMarket Corp.	-6.7%	12.26	1.15	4.51
PLCE	The Children	-8.6%	14.77	0.71	2
RCII	Rent-A-Center Inc.	-1.8%	13.67	0.74	1.58

Each of these stocks has declined in price over the last 12 months and trades at attractive valuations. In effect, these companies didn't participate in the rally.

Prudent investors should wonder if there is a catch to these stocks-- if these companies are value traps. The quality of these stocks can be assayed by confirming long-term positive equity returns and financial stability that can weather tough economic conditions. Fortunately, these firms have positive average equity returns over past 10 reported fiscal years and have "safe" Altman Z-scores:

Ticker	Industry	10-Year Average ROE	Altman Z-score
AEO	Apparel Stores	19.5%	7.00
ARLP	Industrial Metals & Minerals	55.5%	3.57
BGFV	Sporting Goods Stores	32.8%	3.66
CMC	Steel & Iron	10.8%	3.54
CSH	Credit Services	12.8%	3.69
DV	Education & Training Services	16.4%	5.29
GME	Electronics Stores	13.1%	3.46
GPI	Auto Dealerships	9.2%	3.88
HGG	Electronics Stores	48.8%	4.83
INTL	Asset Management	11.2%	28.89
KR	Grocery Stores	18.4%	4.89
MGLN	Health Care Plans	20.7%	5.39
NAFC	Food Wholesale	8.5%	5.60
NEU	Specialty Chemicals	12.0%	6.12
PLCE	Apparel Stores	12.0%	6.25
RCII	Rental & Leasing Services	15.9%	3.39

The strong credit metrics and long-term histories of growing shareholder wealth are indicators of quality, and suggest that these firms are not value traps.

Conclusion

Each of these 16 stocks is attractively priced, has quality attributes, and was missed by the recent stock rally. Value investors ought to consider these stocks as buy candidates, and might consider adding multiple names from this list since they hail from a diverse array of industries. Value investors still have much work to do: this is no time to hibernate with the bears.

*Please read the article disclaimer for this article and Altman z-score calculations.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Courtesy Seeking Alpha