Turbulent Markets And Imperfect Execution May Mean An Opportunity With Benefitfocus

It's great when a stock that you own is supported by a company posting ongoing beat-and-raise quarters with strong revenue growth and impressive margin leverage, but those stories rarely trade cheap for long and especially not in the software sector. On the other hand, if you find an opportunity to get into a story that has double-digit revenue growth potential at a decent price, it's a fair bet that something is not altogether right in the short term.

And so it is with Benefitfocus (NASDAQ:BNFT). I like the basic story here - a company that offers a cloud-based platform of tools that help carriers and employers manage increasing complex healthcare benefit programs. The “but” is that the company has not handled a sales strategy shift very well and it has also seen meaningful turbulence in its market from the uncertainties surrounding healthcare policy in the U.S. I believe both issues are fixable, and I think the stock offers decent upside albeit at the cost of elevated risk.

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Turbulent Markets And Imperfect Execution May Mean An Opportunity With Benefitfocus