Missed by many investors is the value of photography. Investors might recognize its importance in social networks. Facebook (FB) bought Instagram for a then-value of $1 billion. The problem is that the company has yet to monetize the acquisition.
Investors wanting online photography companies in their portfolio should look at Shutterstock. Shutterstock originally filed for an IPO in May. This time, according to an S-1 filing, 4.5 million shares will be priced between $13-15, raising just half of the original amount. The company will raise between $54.2 million and $77.62 million, depending on the price.
A note of caution: back in May, shutterstock said it priced $3 per image. In its recent filing, the average price dropped to $2 per image.
State of Photography: Growth in Mirrorless cameras
The growth in smartphones was directly correlated to a decline in point and shoot cameras. Digital SLRs managed to maintain its popularity, but mirrorless cameras are growing. IDC reported that mirrorless cameras make up nearly 50% of all interchangeable-lens camera sales. This should be a concern for companies like Canon (CAJ) and Nikon. Sony (SNE) entered the ILC (interchangeable lens camera) earlier than its competitors.
Innovation in photographic gear, along with explosive growth in smartphone photography might eventually lead to sustained growth in online photography printing.
Business Section: Investing Ideas
There are a few ways to gain exposure in the online photography business. Shutterfly, Inc. (SFLY), which trades with a market capitalization of $1.12 billion, bought the online photo unit from Kodak.
Consumers are currently visiting Facebook to keep up with friends and family. If the mindset shifts, and the desire for a physical family photo gallery for friends and relatives grows, Shutterfly would benefit.
1. Shutterfly, Inc. (SFLY, Earnings, Analysts, Financials): Provides an Internet-based social expression and personal publishing service that enables consumers to share, print, and preserve their memories through the medium of photography. Market cap at $1.09B, most recent closing price at $30.24.
Less-remembered Flickr, owned by Yahoo, joined forces with Getty Images. Yahoo is not in the online photo print business, but if its CEO renews its focus on Flickr, considering photo-printing or better ways to share photos would be a plus.
2. Yahoo! Inc. (YHOO, Earnings, Analysts, Financials): Operates as a digital media company that delivers personalized digital content and experiences, across devices and worldwide. Market cap at $18.88B, most recent closing price at $15.94.
Investors should keep watching social media sites. Content is dominated by the sharing of photos. If that declines, that would be good for online photography companies. Below is a chart of Facebook, Groupon, and Yelp. They are the sites that hold a large percentage of the social media traffic:
The following camera makers are Sony and Canon. Both companies rallied recently, only to fall again. The Japanese companies may be selling off because of the highly publicized China-Japan island dispute.
3. Sony Corporation (SNE, Earnings, Analysts, Financials): Designs, develops, manufactures, and sells electronic equipment, instruments, and devices for consumer, professional, and industrial markets worldwide. Market cap at $11.9B, most recent closing price at $11.85.
4. Canon Inc. (CAJ, Earnings, Analysts, Financials): Through its subsidiaries, manufactures and sells network digital multifunction devices (MFDs), plain paper copying machines, laser printers, inkjet printers, cameras, and lithography equipments primarily under Canon brand in the Americas, Europe, Asia and Oceania. Market cap at $44.29B, most recent closing price at $33.21.
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- Shutterfly, Inc. (SFLY, Chart, Download SEC Filings)
- Yahoo! Inc. (YHOO, Chart, Download SEC Filings)
- Sony Corporation (SNE, Chart, Download SEC Filings)
- Canon Inc. (CAJ, Chart, Download SEC Filings)