Navarre Corporation: Does the discounted sale of a division forecast improved financials? ($NAVR)

I’ve written about Navarre Corporation (NASDAQ: NAVR) on this site before. They do a combination of publishing and distribution. For publishing, they sell computer software like Mavis Beacon Teaches Typing and Hoyle PC Gaming. However, ~90% of their sales are derived from the distribution business.

The last time I wrote about this company, it had announced that it would sell its FUNimation division for $24 million cash. As noted in that post, NAVR was carrying FUNimation . . .

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Navarre Corp’s sale of FUNimation: Ignoring the forest for the trees? ($NAVR)

I wrote about Navarre Corp (NAVR) in early March, noting that an activist investor could act as a catalyst.

It appears that NAVR’s free cash flow generating capabilities has attracted an activist investor. In November, Becker Drapkin Management, LP of Dallas, Texas, filed a Form 13D indicating that it had purchased 15% of the company. An exhibit to that filing includes a letter that was sent to NAVR’s management demanding, under the Minnesota Business Corporation . . .

→ Read More: Navarre Corp’s sale of FUNimation: Ignoring the forest for the trees? ($NAVR)

Navarre Corporation: Activist Investor as Catalyst (NAVR)

Navarre Corporation (NASDAQ:NAVR) publishes computer software and multimedia products such as Mavis Beacon Teaches Typing and Hoyle PC Gaming. In addition to its publishing business, more than 90% of its revenues come from distributing software and multimedia for other companies, such as Symantec , Kaspersky Lab, Roxio, Webroot, McAfee, Corel, and LucasArts. It is currently trading at a P/E of just 6, but on peak earnings (more like 15x on more normal earnings). More important than its P/E . . .

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