Marlborough, Mass., April 9, 2014 -- Lemelson Capital, LLC, a private investment management firm, today is reiterating its "sell" position on the common stock of World Wrestling Entertainment (NYSE: WWE).
This guidance follows Lemelson Capital's earlier March 17, 2014 sell position on the stock. Since then, WWE has experienced a substantial correction, falling 26.8 percent, from a $30.37 March 17, 2014 close to $22.21 yesterday.
The full report can be found here: http://www.amvona.com/featured/finding-alpha/item/34691-the-short-case-for-world-wrestling-entertainment
Despite this correction, Lemelson Capital today reiterates its position that the stock remains overvalued. The firm affirms $8.25 to $11.88 as fair value for the stock based on the company's execution track record, accelerating earnings declines and lack of visibility into a more lucrative broadcast network contract.
"WWE is facing multiple challenging factors, including underwhelming subscription figures for their WWE network in addition to a multi-year negative earnings trend, suggesting that the firms' intrinsic value is materially lower than the current stock price," said Emmanuel Lemelson, Chief Investment Officer of Lemelson Capital.
Lemelson Capital Management's March 17, 2014 sell report has been cited as a key factor in the stock's substantial downward correction. In that report, Lemelson Capital reported that "the 10-year earnings growth rate of the company is -17.3%. The five-year earnings growth rate is something more substantial at -46.2%. The one-year earnings growth rate is a remarkable -91.6%."
At the close of the market on April 8, 2014, despite the roughly 27 percent correction since Lemelson Capital Management's March 17, 2014 report, WWE is still trading at a price-earnings ratio of 600.
Lemelson Capital and its clients have no position in WWE.
About Lemelson Capital Management
Lemelson Capital Management, LLC is a private investment management firm focused on deep value and special situation investments. The firm is based in Southborough, MA. For more information, see: http://www.lemelsoncapital.com
Lemelson Capital Public Relations
SPECIAL NOTE REGARDING THIS REPORT
THIS REPORT INCLUDES INFORMATION BASED ON DATA FOUND IN FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, INDEPENDENT INDUSTRY PUBLICATIONS AND OTHER SOURCES. ALTHOUGH WE BELIEVE THAT THE DATA IS RELIABLE, WE HAVE NOT SOUGHT, NOR HAVE WE RECEIVED, PERMISSION FROM ANY THIRD-PARTY TO INCLUDE THEIR INFORMATION IN THIS PRESENTATION. MANY OF THE STATEMENTS IN THIS PRESENTATION REFLECT OUR SUBJECTIVE BELIEF.
THE INFORMATION CONTAINED ABOVE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF WORLD WRESTLING ENTERTAINMENT MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED ABOVE SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN DECISIONS REGARDING WORLD WRESTLING ENTERTAINMENT AND ITS PROSPECTS BASED ON SUCH INVESTORS' OWN REVIEW OF PUBLICALLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED ABOVE. NEITHER LEMELSON CAPITAL MANAGEMENT, LLC NOR ANY OF ITS AFFILIATES ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY DIRECT OR CONSEQUENTIAL LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM ANY USE OF THE INFORMATION CONTAINED ABOVE.
Certain statements contained in this letter are forward-looking statements including, but not limited to, statements that are predications of or indicate future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Forward-looking statements are not guarantees of future performance or activities and are subject to many risks and uncertainties. Due to such risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. Forward-looking statements can be identified by the use of the future tense or other forward-looking words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "should," "may," "will," "objective," "projection," "forecast," "management believes," "continue," "strategy," "position" or the negative of those terms or other variations of them or by comparable terminology. Important factors that could cause actual results to differ materially from the expectations set forth in this letter include, among other things, the factors identified under the section entitled "Risk Factors" in World Wrestling Entertainment's Annual Report on Form 10-K for the year ended September 28, 2013. Such forward-looking statements should therefore be construed in light of such factors, and Lemelson Capital is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.