PRI is a fine, well managed company with an excellent past earnings record, and it has bright future ahead. PRI was all of things in the spring and summer though when it traded around $20 a share. It's frustrating at times the way the market treats this stock, but it's reality. If the market decides that it hates "tech stocks", semiconductor equipment stocks, or small cap stocks, PRIA will likely take a huge swing downwards. PRIA has a small float and is a sometimes institutional favorite. Institutions clearly like the stock at the moment. I've offered praise of this company throughout the year, but I can't say that I would advocate purchasing shares at the current price. There's just too much volatility in the share price and too much uncertainty in their near term earnings. I'm not at all bearish on PRI's prospects (and wouldn't discourage purchasing shares either), it's just my experience that it's much more profitable to buy the stock (aggressively) when the institutions bail out, and then sell back 1/2 or so of my position when they're in love with it. Of course, the institutions may catch on to my money making scheme and stop bailing out, which is why I maintain a position in the stock. :-)
I will add this bullish note though. There has been much less insider selling this December than I expected. I've forgotten the exact figure, but I added up the insider sales for December, and only around 50,000 shares have been sold. I was expecting aggressive selling, but I haven't seen it.
Oh, as a side note, I think the question about Intel selling their stake in PRIA has been resolved. Consider this excerpt from PRI's latest 10-K:
Customer A purchased the Company's Series A Convertible Preferred Stock in June 1993. Under the related stock purchase agreement, Customer A was entitled to certain Board observation and Board representation rights. Revenues recognized from Customer A have been disclosed on the income statement as related party transactions in the Company's consolidated financial statements for fiscal 1994. Upon the completion of the Company's initial public offering in the first quarter of fiscal 1995, the stock ownership of Customer A was diluted to approximately 6.7%, therefore revenues from Customer A have not been treated as related party transactions for fiscal 1995 and 1996. In November 1996, Customer A ceased to be a stockholder of the Company, and the related covenants in the stock purchase agreement terminated.
It looks like it was Intel ("Customer A") who sold that 350,000 share block of PRIA for 34 1/8. |
