Behavioral Investors

How Activist Insiders Are Unpacking Hidden Value At Ambassadors Group

In business since 1967, Ambassadors Group (NASDAQ:EPAX) organizes, markets, and conducts educational travel packages to a variety of international destinations. The stock has plunged by nearly 90% since late 2007 on investor concern over declining revenue, as advance bookings for student travel have been pressured by weak consumer confidence and fiscal cliff uncertainty, with the share price decline recently exacerbated by heavy year-end tax-loss selling.

Interestingly, a recent successful proxy contest by large value-oriented activist shareholders is now catalyzing a thorough revision of marketing strategy, significant progress in cost controls, and the sale of valuable non-core assets, which appear likely to unlock shareholder value substantially in excess of the market price. The company is not widely followed, and...

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