For Parlux, product details, marketing messages, and images of Rihanna -- all of which have been in the works for some time and really should be no surprise -- are giving the Market assurance that Parlux is a viable business, a business which -- per our original view -- arguably should trade at least at net tangible book value of near $5 per share. Of course, seeing is believing for the Market and, now, it can almost smell Rihanna's new perfume.
We first mentioned Market Leader in our 1/1/11 Happy New Year post and hoped to share a bit more color before too long. Our brief thesis, previously shared with a handful of friends in 2010:
- Illiquid microcap company trading below net cash value that happens to have a growing, subscription-based $15+ million run-rate (MRQ +40% Y/Y) real estate software-as-a-service (SaaS) solution business inside the company. All of this was/is certainly worth something, even with slight cash burn to build the business.
Alas, before we found time to share more details here on CS$, a large deal announced on Monday made the Market realize that, HEY, maybe this company is worth something. We agree.
Although we believe predicting short-term share price direction is impossible and akin to gambling, sometimes "the trend can be your friend" once the Market "wakes up to a story."
Importantly, we continue to see margins of safety in both names.
Disclosure: long PARL, LEDR.
© 2011 Jeffrey Walkenhorst
Please see important Risk Factors & Disclaimer