Opened a position in Live Ventures (LIVE) today @ $23.60/share. Their a diversified holding company that currently own 3 separate businesses. Vintage Stock: movies, video games, music products, collectibles, books and comics. Precision Marshall: a small custom steel manufacturer that produces drill rods, flat stock, Alloy Plate, and Steel Plates. Marquis: a carpet and flooring manufacturer. They acquired the steel operation mid 2020 so shareholders will need to be a little patient with that acquisition. I’m surprised by the success of Vintage Stock which has 62 locations with various store names. This retail segment concerns me a little, but it continues to produce great revenues and earnings. Marquis is the one I’m most optimistic about. They have seen good growth over that past 3 years with the ambition to continue growing, with the most recent quarter showing a 50% increase in revenue and a 73% increase in operating earnings compared to the same period last year. Expenses were significantly reduced during 2020 due to COVID, reductions that look like they will remain in place. If earnings were to hit between $12-$15 Million in 2021, which is very reasonable and maybe even conservative, that would give us a company trading at 2.5–3x 2021 earnings. FCF was over $20 Million last year and the continued debt reduction going forward should save the company millions going forward. If this management team facilitates the right moves over the next couple of years, this could be a very profitable investment.
One thing that needs to be considered is the dilutive effect of the convertible preferred stock. But even with this being accounted for, this still makes for a potentially great investment.
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