Seeking Alpha: Monotype Imaging May Be On Hold For 2013, But The Long-Term Outlook Is Solid

Given that Monotype Imaging (TYPE) is up about 16% since I recommended it in mid-March (against 6% for the S&P 500), I'm feeling pretty good about that call. Likewise, I still like the long-term opportunity for this company. Fonts and typefaces are one of those businesses that fits in with Peter Lynch's philosophy of targeting overlooked businesses that provide essential products/services that nobody thinks about much, if ever.

All told, I still believe that Monotype has less than 20% of its potential market, and the revenue opportunity for the company could be as high as $1 billion. On the other hand, demand for consumer and business electronics like handsets, tablets, and printers has been softer lately and the company has had to reduce guidance on the basis of higher/worse-than-expected FX headwinds and taxes. I don't believe that investors need to freak out over the lower guidance for 2013, but it does suggest that these shares may be just marking time until revenue growth reaccelerates.

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Monotype Imaging May Be On Hold For 2013, But The Long-Term Outlook Is Solid