Mike Arnold
Long only, small-cap, tech, growth at reasonable price

Town Sports Gets Clubbed

Executive summary:

  • A challenging competitive environment is too heavily discounted in shares of Town Sports International Holdings.
  • The market is disregarding positive recent catalysts, including an $82 million sale of real estate in Manhattan and a positive debt restructuring extending maturities and locking in lower rates.
  • Analyst downgrades cause severe, temporary price dislocation.


You have to love analyst downgrades if you are an opportunistic investor. They can cause some serious price dislocation, many times overshooting any rational semblance of changes in the underlying value of the business.

That is precisely what happened to shares of Town Sports International Holdings (NASDAQ:CLUB) ("CLUB" or "the company") after a decent earnings report on Wednesday when Wedbush Securities piled on, lowering...

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