Is Interactive Corp. a Buy?

Barron’s published a research note this morning by a firm called Morgan Joseph TriArtisan, whose analysts rate IAC/InterActiveCorp. (NASDAQ:IACI) a Buy.  The note reads, in part:

IAC’s strong performance has been marked by effective cash generation and strategic acquisitions. Free cash flow in the first six months of 2011 beat last year’s level by 28% at $137.8 million. In the second quarter, the company repurchased 7.2 million shares of common stock worth approximately $262.6 million.

Since then, the board of directors authorized the company to repurchase an additional 15 million shares of common stock. Management has also indicated that it will continue its acquisition efforts, though nothing significant is likely in the near term, in our opinion.

Of interest here is that the second quarter, during which IAC (NASDAQ:IACI) bought back stock, was a low point for the stock.  The stock recently traded at $40.04, up $0.07. or 0.18%, on the day.  The shares have traded in a 52-week range of $25.08 to $43.80 and its market capitalization is $3.4 billion.  Companies that spend their own cash to buy back their stock invariably seem to do so at the top of the market; IAC (NASDAQ:IACI) seems to have bucked that trend.

About the company: IAC/InterActiveCorp operates Internet businesses.  The Company’s websites offer search, gaming, dating, directory, footwear retailing, and campsite reservation services.

Competitors to Watch: Google Inc. (NASDAQ:GOOG), Yahoo! Inc. (NASDAQ:YHOO), AOL, Inc. (NYSE:AOL), Answers Corporation (NASDAQ:ANSW), Microsoft Corporation (NASDAQ:MSFT), Demand Media Inc (NYSE:DMD), Baidu.com, Inc. (NASDAQ:BIDU), InfoSpace, Inc. (NASDAQ:INSP), The Knot, Inc. (NASDAQ:KNOT), and Sohu.com Inc. (NASDAQ:SOHU).

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