1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Barel Karsan
Barel Karsan

Premier Returns...Hopefully

June 19, 2013 | About:

Should anything ever happen to me, readers of this blog wouldn't miss a beat in terms of Stock Ideas. All you would have to do is follow Whopper Investments, who independently writes about many of the same stocks I do. For the second week in a row now, we have come out with new articles about the exact same company. This week's stock: Premier Exhibitions (PRXI).

Neither of us are copying each other; last week, my article came out first. This week, his article is out first but is currently behind a paywall (so I have not read it). But we both like stocks that have seen substantial price erosion despite minimal (if any) business value destruction. If you don't already, be sure to follow him.

Premier Exhibitions is actually a well-followed company within the value blogosphere. I can point you to a previous article I've written here, a recent article by Ragnar here, and a cool series of articles by PlanMaestro that describe the company's problems that required correcting.

Despite Premier having been on my radar all these years, I was never compelled to buy it until now. Two things have changed, however. First, the price of the shares has fallen in a big way. Rumours are abound that partners in a defunct hedge fund run by (an appropriately named) Mark Sellers are winding down their large positions. Shares are down about 25% in just the last month.

The second reason is that the company is now profitable for the first time in years. In its last fiscal year, Premier shows positive net income and free cash flow. So even if the sale of the Titanic assets (reportedly for $189 million; compare that to Premier's $90 million market cap!) falls through or takes even longer, there is at least an underlying business there that is self-sustaining, which protects the downside to some extent.

In fact, I would even argue there's reason to be optimistic about the company's core business. Recent management comments suggest there are growth opportunities that can be explored without risking a whole lot of capital in the process. This is a welcome change from the previous regimes' "If you build it, they will come" mantra that has destroyed so many margins of safeties throughout history.

Disclosure: Author has a long position in shares of PRXI

About the author:

Barel Karsan
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 1.0/5 (3 votes)



Please leave your comment:

Performances of the stocks mentioned by Barel Karsan

User Generated Screeners

daftheaderprice drop
borjateyNew Value IPO
ky_chui15 percent rule
canidlakonishok test 1
cyarmeytop holding f scores 2
cyarmeytop holding f scores
rael2222TOP TOP 3
Saab HoldingsSaab other
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat