With so much cash lying around, investors might worry that Support could be tempted to blow its reserves on ill-considered acquisitions. Not to worry. It’s only made four acquisitions of any size in the past six years, and Pickus confirms he’s not interested in buying just for the sake of buying. New subsidiaries must bring both valuable technology and vibrant businesses complete with new customers and revenue streams.
Meanwhile, Support.com, Inc. (NASDAQ:SPRT) seems content with the business it’s got. As Pickus explains, there’s little risk of key customers Office Depot Inc (NYSE:ODP) and OfficeMax Inc (NYSE:OMX) leaving the fold after their merger. They, like key rival Staples, Inc. (NASDAQ:SPLS), all use Support.com to provide tech support to their customers. And as a rule, Pickus says, the profit margins they earn on this revenue are superior to what their core retail business provides — and the revenues are growing faster as well.
With overall growth in the retail industry averaging 12%, and Support pegged for 20%, this seems true for Support.com, Inc. (NASDAQ:SPRT) as well as for its customers.
The article Up 78% Since June, Is Support.com’s Rally Supportable? originally appeared on Fool.com.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of Staples.
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