Are Online Dating Stocks the Right Match for Your Portfolio?

Page 1 of 2

There is huge potential for online dating stocks, but customer satisfaction is on the decline. Should you invest?

Online dating companies have been in the news a lot lately. Maybe you’ve even heard of this new app that the kids are using: Tinder. Far from just another extension of post-adolescent shallowness, Tinder has spread like wildfire and now processes over 200 million matches per day.

That number is high because the app makes it very easy to browse through several matches in one sitting, phasing out things like profiles and questionnaires. Users are simply presented with a photograph and a button for “yes” and “no.”

Still. 200 million.

This app has also succeeded at getting something which many other dating sites have only dreamed of – a relatively even distribution between men and women. Tinder is putting to rest the dated notion that women would be less interested in online dating options on the more casual side.

And consider a new report discovered by Quartz this morning. It’s suggesting that millennials, the increasingly ubiquitous term for people who came of age in the post-2000′s period of social media and Lady Gaga, are less likely to feel ashamed of online dating.

IAC/InterActiveCorp (NASDAQ:IACI)

This may not be interesting in its own right. New products, especially ones that pertain to affairs of the heart, are always going to be greeted with skepticism at first.

But it’s interesting because while more and more twenty-somethings report an acceptance of online dating, they simultaneously profess to being less satisfied with the results. Including apps like Tinder, the market for online dating has expanded four times in the last five years. And while the percentage of Americans who are online seems like a narrow demographic at 11% – that number swells to almost 40% when you exclude married couples.

That’s some pretty considerable market growth. And yet we have to include evidence of dwindling satisfaction with the results.

- Over a third of customers reported getting matched with someone they already know – hardly the point of online encounters.
- And over half reported being misled by, um, embellished profiles.
- One in ten customers admitted being ashamed for resorting to using dating websites to begin with.

Those are hardly product endorsements.

This of course strikes a very different note from China, where a matchmaking industry has flourished. There, bachelors regularly shell out six figure fees to matchmaking services. These are country club  alternatives compared to the American firms, and they actually hire operatives to scan the streets and high-end stores, finding matches for wealthy clients with rigid specifications.

Jiayuan.com International Ltd (NASDAQ:DATE), the largest Chinese dating service that trades in the US, has seen huge growth this year, withearnings per share (EPS) rising 150%, and projected to grow another 20% in the next year.

China may be a unique case. America has neither the one-child policy nor the gender imbalance which has prompted parents to resort to informal, open-air marriage markets, presenting hand-written personal ads for their children. And new data suggests that, with some anomalous exceptions, Americans are still as wary as ever of meeting a stranger online.

So does the brave new world of online dating present investing opportunities? We compiled a list of stocks traded on US exchanges that operate in this market. We’ll let you decide if it’s a match made in, well, online heaven.

Click on the interactive chart to view sales data over time.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!