Navarre Corp (NASDAQ:NAVR)

i think of this company as more like two companies, theres the publishing and then theres the distribution.

The distribution business is steady, very very modestly profitable, and despite an accelerating trend towards online purchases of information media, will continue to produce solid but very modest numbers going foward.

Publishing, on the other hand, is a funny business. One big hit, or a few moderate hits and suddenly a company can be valued at 20+ times earnings based on earnings at the time of the anomaly. Navarre has been putting together many possible hits, first through Funimation and the growing anime market in the US, and secondly through BCI and ENCORE, albeit both of these publishers are struggling. (HeMan, D&D, Monopoly) Navarre never bets the house on the success of one title, but invests modest sums in many different media formats.

What I like about this company is its relativley cheap EV to breakup valuation, its accelerating paying off of debt, its very modest but consistent profitability, and the inevitable payoff of a homerun in publishing. The tested bottom is 3.50 a share.