I decided to waste $12 this weekend and buy the Navarre research report from March 17. If you are looking for an ammusing read, I suggest you check it out. I especially enjoyed the research techniques utilized.
One concern Miller uses to justify the "Sell" recommendation is the apparent weakness in antivirus (AV)sales. I was curious about this and did some of my own research. Here is what I found:
Navarre mentions NPD Intellect as a source of information for the PC software industry in their 2004 annual filing. I visited the NPD website and found a listing of the top selling software from February 2005. For all categories of PC software, Norton Antivirus 2005 was ranked 4th (3rd in January). Other Norton products were ranked 8th, 9th, 10th, and 13th. Webroot products were ranked 16th & 17th. All of these products were also on the top-selling list in January as well. If antivirus and similar software sales are down this year, then all software sales are down based on the above mentioned rankings. I also checked CompUSA's website, and no suprise, most of their best selling software listed was from Norton.
Miller also mentions that Navaqrre apparantely is not attending video game conferences even though this area was identified by management as a growth area. Hmmm, I wonder why Navarre is listed as an exhibitor at the E3 show (held in LA in May), the largest video game industry trade show, if they are not making a committment to increasing market share in this arena?????
Just thought the board may find this of some interest.
well since he has a $5 target..........he'ld have to be pretty stupid not to have a low earnings est........wonder how much he is getting paid to dog NAVR.........wonder how much jail time he gets if he gets caught...........wonder how many clients MJSK will lose from following that retards advice.......i see lots of lawsuits in MJSK future..........maybe we should short them.LOL
Please keep in mind this report was done while the bond issue was active, so some of the other points brought up are no longer valid. Other items in the report are:
Assumed that the GE Capital credit line was no longer necessary, so sees it as a negative that the credit line was increased to $75 million.
Believes that revenue growth is flat year over year if Riverdeep and Hoyle revenue are backed out. Sees this as zero organic growth.
Based on regional store visits in the Upper Midwest region, states that inventory of products distributed by NAVR are either non-existant (out of stock) or aging (been on the shelf for some time).
Discussed sales and inventory movement of Navarre distributed products with store associates to form opinions stated in report.
Believes Sarbanes-Oxley could be a risk due to the nature of documenting controls in a distribution environment.
If he has nothing good to say....he shouldn't be saying anything at all.....
In his December report, his sell target was $10 per share....he's not happy with the equity shelving and senior notes termination in subsequent reports....however, he fails to take market conditions into consideration with either report....and blankets NAVR as a sell....Craig Hallum, another analyst at a competing firm in Minnesota states bennett grossly miscalculates and puts NAVR at $21 in his Dec. 2004 report......
The analyst at MJSK (Chad Bennett) has never been onsite at Navarre Headquarters and refuses to speak with management -- he's a hometown analyst that looks like he's getting paid by hedge funds to promote a sell recommendation. How did you get the report....???? I wanted to see it too...but MJSK never returned my calls....
What kinda of firm is MJSK anayway? Piper Jaffray with a "BUY" recommendation is much more reputable as is Southwest Securities....
On Yahoo, while on the NAVR finance page, go to Star Analysts (I guess it doesn't take much to be a star!)and you will see a link to purchase the report next to the miller guys name.