Investors might be surprised to hear "stamps" and "best-performing" in the same sentence. But one of the few analysts who covers the company says that the stock has little to do with the art of licking small rectangles, or with your uncle's philately hobby.
"The name is almost a misnomer at this point," Bill Sutherland of Emerging Growth Equities said in a Wednesday "Trading Nation" segment. "Today, it's focused for the most part on the e-commerce shipping world, and on some new enterprise applications, and that's really what has made the company and the stock really begin to stand out."
As Sutherland explains it, Stamps.com is really a derivative e-commerce play. After all, if you sell a tangible product over the Internet, you'll have to ship it, and Stamps.com allows you to do that simply and at a discount to U.S. Postal Service rates, since Stamps.com is one of three vendors that has an arrangement with USPS allowing it to sell discounted postage online.
It is no coincidence, then, that in the list of best year-to-date S&P 1,500 performers, Stamps.com comes just one spot above e-commerce behemoth Amazon.
The company has also bolstered its business with a series of acquisitions, most recently that of shipping technology company Endicia from Newell Rubbermaid.
Endicia "has a very strong focus in e-commerce shipping, and a much larger customer base, and that's really going to be the fuel for the story going into 2016," Sutherland said.
While the analyst says he is looking forward to more visibility around Endicia's financials, on the whole, he remains positive on the surging stock.
"I just believe that with the way trends are going, these guys have just found themselves in the right place in the right time — and they're good."