Oxstones Investment Club™By JON C. OGG, 247Wallst,
The capital markets bring reward and obligation alike to public companies which need them for capital needed to fuel their growth. Many unique companies which opt to go public have business models many Americans know quite well. There are others, however, which are so obscure that they remain almost unknown. Some of these niche companies have such singular business models that they have either limited or no competition.
What makes for a unique public company? Well for starters, both the Cleveland Indians and the Boston Celtics were once publicly traded entities. The Green Bay Packers still are public. Last year, the team reported a 30% increase in net income. Having access to the public markets can bring additional rewards and opportunities for management teams that don’t mind the additional scrutiny.
There is a public company tied to grading sports memorabilia, treasure hunting, the rights to Elvis Presley, a virtual monopoly in yoga wear, a company tied to The Titanic and museum exhibits, maternity wear, a sports team and entertainment venue, and even a massive gold royalty company. Some of these companies are so unusual that they almost own the industry by themselves.
While there are many unique private companies, this list only deals with those in public markets. This is because investors generally look for growth and higher income opportunity in public companies. We skipped over those that don;t trade on the major stock markets.
1. CKX Inc.
The Business: rights ownership of celebrity likenesses and properties
Market Cap: $25.2 Million
Interesting Fact: Operates the “Graceland” Museum
CKX Inc. (NASDAQ: CKXE) owns the rights or partial rights to the names, images and likenesses of celebrities like Elvis Presley and Muhammad Ali, the operations of Graceland along with the massively popular American Idol and So You Think You Can Dance television shows. Last year, the company disclosed that Robert F.X. Sillerman resigned as CKX’s chair and CEO to pursue a possible acquisition of the company but those talks ended in 2010. Sillerman has formed a different entity called Function (X). CKX has a market capitalization of nearly $380 million with shares at $4.09, and its 52-week range is $2.91 to $6.32. Revenues decreased from $328.3 million in 2009 to $273.7 million in 2010. Total assets went $109.4 million in 2009 to $460.8 million at the end of 2010. Its goodwill is valued at $111.3 million and its intangible assets are worth $88.1 million.
2. Collectors Universe, Inc.
The Business: collectible evaluation
Market Cap: $111.7 Million
Interesting Fact: Company-owned PSA certifies stamps, autographs, trading cards, and stamps
Collectors Universe Inc. (NASDAQ: CLCT) offers professional authentication and professional grading services for items such as baseball and football cards, autographs and memorabilia, coins, and stamps. You know that multi-million dollar Honus Wagner tobacco baseball card? Collectors Universe authenticated and graded it. Its fiscal June 2010 revenues were $39.76 million with net income of about $16.7 million. While Collectors Universe has competition, it is either private or is more diversified. Imagine earning a living from evaluating sports memorabilia… A truly unique business model.
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3. Destination Maternity Corporation
The Business: Maternity Clothing
Market Cap: $298 Million
Interesting Fact: The company also runs a maternity spa called “Edamame”
Destination Maternity Corporation (NASDAQ: DEST) is a niche retailer specializing in maternity clothing and apparel. It operates more than 1,700 retail locations. Its retail chains include Motherhood Maternity, A Pea in the Pod, and Destination Maternity. It also sells online and through Sears, Kmart, and Kohl’s. The company’s shares are close to all-time highs. Its 2010 revenues were $531 million and net income was $16.8 million.
4. Lululemon Athletica, Inc.
The Business: Yoga Wear
Market Cap: $4.61 Billion
Interesting Fact: The company was originally going to be called “Athletically Hip”
Lululemon Athletica, Inc. (NASDAQ: LULU) is the largest of our highly unusual public companies and it is based in Canada. Is has been a story of amazing growth here in the States, however. Its shares are very liquid, with an average daily volume of more than 2 million. How this became a $6 billion company in market cap has amazed and confused many investors. Its shares have risen about 15-fold since the market bottomed in March 2009. Lulu’s fitness and lifestyles products are not exclusively for yoga but few consider it competitive with sportswear with giants such as Nike, Adidas, or Reebok. Its company-owned Lululemon brand stores are also sometimes turned into instant yoga studios, which means it competes with the independent yoga studios which are also its customers. The company has significant growth opportunities in North America and internationally. With Lululemon’s success, is amazing that someone has not tried to do a series of roll-up acquistions of independent yoga chains followed by an IPO. A barrier to a roll-up might be that Lululemon has been so successful. The company’s shares have risen so much that it just declared its first two-for-one stock split.
5. Madison Square Garden, Inc.
The Business: Sports/Entertainment Venues
Market Cap: $2.06 Billion
Interesting Fact: Madison Square Garden is the most popular in terms of ticket sales in North America.
Madison Square Garden, Inc. (NASDAQ: MSG) has ties back to Cablevision and was recently spun out of that company. MSG operates in three segments: MSG Media (content for multiple distribution platforms, including content originating from its venues, along with MSG Network and Fuse Networks); MSG Entertainment (creates, produces, and presents live productions via concerts, family shows, special events, and theatrical productions); and MSG Sports (which owns and operates sports franchises). In New York City, the company owns the Madison Square Garden complex. Its other venues include The Chicago Theatre in Chicago. It leases Radio City Music Hall and the Beacon Theatre in New York City. The stock actually popped recently on news that Carmello Anthony was joining The Knicks basketball team.
6. Odyssey Marine Exploration Inc.
The Business: Wreck Exploration
Market Cap: $203.9 Million
Interesting Fact: The Discovery Channel aired a show about the company’s explorations called “Treasure Quest.”
Odyssey Marine Exploration Inc. (NASDAQ: OMEX) is nothing short of a publicly traded treasure hunter. The company is involved in exploration and recovery of deep-ocean shipwrecks and it in turn sells coins, artifacts, and merchandise from these wrecks. It has artifacts from the Civil War ship the SS Republic, HMS Victory, Black Swan and more It has found itself at odds before with sovereign nations which claim that wrecks of ships which sailed under their flags belong to them regardless of their age. OMEX often has to go to international court or set up revenue shares with the countries which adds risk to its model. To make matters even a bit more interesting, Odyssey Marine also leases its themed attraction exhibit and expedition charters. The company sports a market cap of close to $185 million and its share price tends to move higher when major wrecks are found or awards from the wrecks are paid, as you saw with its shares popping in recent days after it retained Robert Fraser & Partners to help it identify artifacts from a newly discovered wreck Revenue jumped more than four-fold to $21 million in 2010 but the company was not profitable. Can you imagine being able to tell people you are a professional treasure hunter?
7. Premier Exhibitions, Inc.
The Business: Museum Exhibitions
Market Cap: $88.5 Million
Interesting Fact: Premier Exhibitions’ Titanic exhibit has had a record-breaking 18 million visitors.
Premier Exhibitions, Inc. (NASDAQ: PRXI) is part artifact-owner and part museum. The company is about to offer an interactive experience that simulates being blind called Dialog in the Dark. It already owns the BODIES exhibit that shows actual bodies for a museum-based scientific experience and the real human bodies have been ‘plasticized’ for preservation. Another division of the company is its Salvor-In-Possession rights to the shipwreck of HMS Titanic and it also has the museum exhibit Titanic: The Artifact Exhibition. Its most recent balance sheet gave a value of the total assets of almost $37.3 million. Revenues of $43.428 million in fiscal February 2010 had been in decline (down from $61.4 million in fiscal 2008), but that may not be the case ahead. Regardless of whether the revenues are rising are falling, Premier Exhibitions has one of the most unique product lineups of any company among private companies and public companies
alike.
8. Rick’s Cabaret International, Inc.
The Business: Adult Nightclub Ownership
Market Cap: $108.8 Million
Interesting Fact: The company owns 23 major clubs nationwide.
Rick’s Cabaret International Inc. (NASDAQ: RICK) shows up as a restaurant on its peer screen at most finance sites. This is a bit of a misnomer and it is far from a family destination spot. Rick’s owns and operates upscale adult nightclubs along with about 25 adult-only websites. Rick’s sports a market cap of more than $100 million and it has made many acquisitions around the country as it selectively rolls up smaller successful operations. Its acquisitions and its sin business model were able to expand during the recession as $59.9 million in 2008 revenues grew to $75.8 million in 2009 and $82.98 million in 2010. Rick’s even tried to acquire the only other public rival, a smaller company called VCG Holding Corp. (NASDAQ: VCGH), but that company signed a merger agreement with its own Chairman & CEO in late-2010.
9. Royal Gold, Inc.
The Business: Gold Mine Royalties
Market Cap: $2.83 Billion
Interesting Fact: The company was originally into oil royalties until a major price drop caused a shift to gold.
Royal Gold, Inc. (NASDAQ: RGLD) is a royalty owner of the yields from gold mines. What is so amazing is that its market cap is more than $2.8 billion and the company has only about 20 employees. Most gold-only mutual fund operations require far more than 20 employees to produce even modest income. Royal Gold had revenues of $136.5 million in 2010 with its modest sized staff. Royal Gold’s portfolio consists of royalties and potential royalties from 187 gold-related properties on six continents. Some of its royalty producing operations have been on the books for quite some time and it lists about 30 current producing sites with nearly as many development stage royalty projects on its website. The ‘per employee’ figures for market cap and revenue are among the highest ‘per employee’ figures of all public companies.
As you have probably noticed, we have left of this article any analysis of which models among these public companies is viewed by Wall St. as successful and which is not. These companies all have histories which speak for themselves. Some have expanded rapidly and while other are smaller than they were just a few years ago. The Doors sang “People Are Strange” but they could have also sang “(Some) Public Companies Are Strange.”
Read more: From Strippers to Shipwrecks, America’s Most Unusual Public Companies – 24/7 Wall St. http://247wallst.com/2011/03/31/from-strippers-to-shipwrecks-americas-most-unusual-public-companies/#ixzz1IKFjE5xM
Tags: “Graceland” Museum, American Idol and So You Think You Can Dance television shows, and merchandise from these anicent ship wrecks.artifact-owner and part museum, and stamps., artifacts, autographs and memorabilia, black swan, BODIES exhibit, Civil War ship the SS Republic, CKXE, CLCT, coins, deep-ocean shipwrecks, DEST LULU, Dialog in the Dark, Elvis Presley and Muhammad Ali, HMS Victory, Inc., Lulu’s fitness and lifestyles products, Lululemon Athletica, Madison Square Garden complex., MSG, niche retailer specializing in maternity clothing and apparel., NY Knicks, OMEX, Premier Exhibitions, professional authentication and professional grading services for items such as baseball and football cards, PRXI, Radio City Music Hall and the Beacon Theatre in New York City, RGLD, RICK, Rick’s Cabaret International Inc., rights ownership of celebrity likenesses and properties, Royal Gold, sin business model, treasure hunter, unusual public companies, VCG Holding Corp., VCGH, yoga studios