Rande--Check out PRVT--the only publicly traded company whose primary business is, well, porn. They are now moving their business model to the Internet, and as we all know, porn is basically the only profitable business on the Net. So it could be a good opportunity. Nice write-up in Briefing.Com on them this morning:
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PRIVATE MEDIA GROUP (PRVT) 16 1/8 +3/16 The porno-on-the-internet stock that we profiled today on the Stock Brief page also reported earnings this morning. No matter what you think about the moral ramifications of pornography, the business model is strong, and the industry is likely to keep growing. Even this little company, that we never heard about before, has a net income percentage better than Microsoft's. Of course, drug dealers probably have even higher margins, but pornography is legal. This company is a small Swedish publisher of magazines and videos, all labeled Private in one way or another, that is in the process of moving their content to the internet. The nice thing about this business model is that all of the old magazine and video material can simply be converted to the internet with far less cost than creating new content. Unlike an ordinary magazine, like Time, pornography content is not temporal, and therefore, is reusable as new material. While the dominant source of revenue and profits is still the magazine and video business, the prospects for the internet seem good. For the first quarter, the company reported revenues of $5.5 million, with net income of $1.5, for a net profit margin of an astonishing 27%. More important to us, however, was the fact that the working capital increased by over 12% to more than 10 million, from the end of December. We were concerned about the company's DSO figures, as mentioned in the Brief, but this very good increase shows it isn't really a problem; however, the news release doesn't list the accounts receivable line. If the internet sites take off for this company, they are likely to rake in a lot of cash. We can certainly see why many of them stay private: they simply don't need outside cash to build a bigger business. But don't expect the late night stock market review TV shows to mention this stock, even though it has now set a new 52 week high, for the third time in the last week. Pornography on the net is still, as one of our readers phrased it eloquently, the "biggest, quietest ecommerce" on the net.
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Some may be offended by this company's business. Although I don't get into porn--as long as it's legal and as long as I can make some money off the investment, I'll leave the morality plays to others. |
