Not everyone is down on the company though and this piece on the recovering wine industry notes that Crimson President and CEO Erle Martin ‘expects the company to double in size to a half-million cases and about $100 million in sales by 2016.’ Not bad at all, especially if the company can achieve this while also maintaining its recently improved gross margins. Now I am sure most of you are probably thinking that this doesn’t matter since the President & CEO of a company is supposed to be bullish…that is his job! Fair enough, but its still worth noting what management’s expectations are for the business.
Mr. Martin isn’t the only one excited about the company’s prospects though. A reader recently sent us a link to this excellent guest post by Tsachy Mishal on MarketFolly.com which lays out a bull case for Crimson. In short, based on expected improved capacity/production at several of its wineries and a continuation of its improved operating metrics along with a BV analysis, Mr. Mishal argues the name ‘has roughly 70% upside to a conservative valuation.’ (as an FYI – that was based on a price of $7.78 – upside would be less now). I highly recommend checking out the piece for additional details.
That is the beauty of the market – often two sides to every story.
Disclosure: Author holds no position in any stock mentioned.
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- Crimson Wine Group – Alas, Another Public Wine Company (247wallst.com)
