Ehow/Demand Studio Stock (DMD)

Last month I got an e-mail from the old Ehow article site saying that they were closing their compensation plan which paid me monthly passive income for articles I had written. Initially I thought this was a bad thing but after reviewing the e-mail they offered to buy my articles or I could remove them and place them at another article site.

Since many of my articles were written when I first started trying to make passive income online the quality wasn’t the best so the decision to sell them was a relatively easy one. I decided I would just write new articles at other article sites. I then thought maybe I should invest that money into the companies stock since it was a publicly traded company. I also have a theory that since this company would no longer have to pay passive income every month to the writers but instead would now get to keep 100% of the earnings that this could have a significant impact on thier earnings.

After doing some research on DMD (Demand Studios/Ehow) I realized that they were losing money currently but after buying all these writers articles that may change very soon, possibly in two quarters. In my opinion this company is significantly undervalued since much of their revenue is based on Search engine searches. The earnings have already taken a big hit a few months ago when Google changed up its search results and placements so that is already discounted into the stock.

The good news is that their page views keep going up which translates into higher earnings and management is already addressing the issues with Googles new search engine rankings. Goldman Sacks just upgraded the shares from a neutral to buy recommendation which sent the shares higher a few days ago by 16%.

Bottom line is that this may be a good time to pick up some shares of this company. I will tell you that I picked up some shares myself so I don’t want to leave that out of this post so you know my position ahead of time. That being said any old Ehow writers might want to take their pay outs and invest in the company themselves.