United Online (UNTD) is a name that few investors are probably paying attention to, but this is an inexpensive stock that has a catalyst coming up in 1H13 that could unlock quite a bit of value.

Initially formed by the 2001 merger of NetZero and Juno, the company subsequently made a series of acquisitions (FTD Group, Classmates.com, MyPoints, SchoolFeed) to offset declines in its dial-up business. While its efforts to diversify away from being a dial-up service provider is commendable, the current collection of assets does not make a lot of sense. Investors have complained about it a lot and finally management has listened. On August 1, UNTD announced it will separate its business units with a target in 1H13. We think the pending separation may act as a catalyst as we approach the breakup date.