When investors looked at Internet publishing company Demand Media Inc. last week, they saw a deal.

So they scooped up the Santa Monica company’s shares, sending the stock up 12 percent for the week ended May 28 to close at $4.57, making it one of the biggest gainers on the LABJ Stock Index. (See Page 30.)

Sameet Sinha, an analyst who covers Demand for West L.A. investment bank B. Riley & Co., said the action came because the company’s shares were significantly underpriced.

“The value of the company’s assets far outstrips the valuation the market is giving it,” said Sinha, who has given Demand a price target of $9 a share.

The company did not respond to the Business Journal’s request for comment.

Demand’s planned spin-off of one of its assets, Internet domain name service provider Rightside, is also sparking investor interest. As part of the split, slated to happen later this year, Demand’s shareholders will get stock in Rightside, which accounts for more than one-third of Demand’s revenue. Sinha wrote that Rightside’s business “hums along nicely” in a recent report on the company.

“This is potentially an event for the company that could unlock some value,” he said.

Last week’s surge follows a significant downward slide of the stock price. Even after the rise, its stock is off 50 percent from its year-ago price. Demand’s stock hit a 52-week low of $3.62 on May 9, one day after the company reported disappointing earnings.

Douglas Arthur, an analyst who covers the company for New York investment bank Evercore Partners Inc., said Demand’s cheap price, against the backdrop of the strength of the broader market, has made the company a target of value investors. His price target for the company is $5 a share.

“With a better overall market backdrop, there has been some bargain-hunting in the stock,” he wrote in an email to the Business Journal.

In his May 13 report on the company, Arthur wrote that the major risks for Demand’s business were its continuing reliance on Google for visitor traffic, which continues to decline, and the costs it might incur as it works to improve its reputation as a “content mill” designed to draw clicks.

Making its content more attractive could boost the company’s profile and help it achieve more favorable search results within Google’s algorithms. Right now, investors remain wary about the company’s content.

“They are basically giving zero value to the content assets,” said B. Riley’s Sinha.