Click Commerce: Victim of Confusion or General Malaise? (CKCM)

I took advantage of what I hope is merely some temporary confusion and investor unease with Click Commerce (CKCM) to up my position a little bit. I used some of the cash freed up from my recent sales to buy a few additional shares of (CKCM) at $19.61 yesterday.

I've done this before and the circumstances were similar. I picked up some shares back in March when there was an unwarranted scare related to their delayed 10-K filing. I think this will have to be my last Click Commerce purchase for a while as it has become a pretty large position in my portfolio and I'm not sure I can handle more of this highly volatile stock.

I'm not entirely sure why (CKCM) dipped today to a point that I couldn't resist an add-on purchase. There has been no striking news about the company or announcements of new releases of products or new clients. However, they've certainly been active with their "webinar" series aimed at clients. In addition, they named a new CFO last week, and, most importantly, they released their arguably-below-estimates- but-not-worrisome earnings.

The Fool had a good brief article on Click after the earnings release and there was a little confusion on Sunday regarding exactly how much Reuters screwed up the analyst estimates part of its Click Commerce reporting. They wrote after the earnings release that an analyst had previously revised estimates down significantly (but misleadingly titled the article "Click Commerce Q1 EPS Estimate Revised"), then realized that the title was misleading and issued a new article, called "Click Commerce Q1 EPS Estimate Corrected", that tried to clarify that this had nothing to do with the company or with a new downgrade, just a correction of an existing analyst estimate.

Phew. This kind of stuff happens to Click Commerce all the time. And with such a tiny company, with a small float and a large short position, it takes very little to move the shares dramatically. I don't know if it's just the general malaise of the Nasdaq that brought Click down yesterday to my buying point or if it's a reaction to this news or a delayed reaction to earnings.

But in the end, it appears to me that business is doing very well; hosting and maintenance have become big drivers of earnings lately, and their big clients like Home Depot are making more and more use of Click's products, something that I hope to see continue as RFID begins to make itself more and more cost effective in the supply chain. (I wrote more about this the last time there was a real fire sale on (CKCM) shares, back around $13 in October)

This is still a risky investment, and clearly one that the market thinks is really on the edge given their very low valuation and tumultuous history. With a tiny trailing PE of around 13 and a dramatically strong, if uneven, growth rate (even though taxes are likely to bite into earnings more as we go forward), I'm willing to hold through the bumps that I expect we'll feel in the road ahead.

CKCM 1-yr chart: