Saturday, December 03, 2005

Update: Silverleaf Resorts
Price: $2.89
Mkt Cap: $106.8 million
Avg volume: 103,500
P/E: 4.7

Shares of Silverleaf Resorts have more than doubled since our intial report on June 3rd. At the time, the small timeshare resort company was trading below its NCAV. The run-up in price is very recent, and we can't identify the catalyst. According to a December 1st, Reuters story the compamy was unaware of any reasons for the increase in volume, and stock price movement.

Third Quarter earnings
We might have understood the stock reacting positively to third quarter results, but those were released November 1st, one month ahead of this recent price action. Total revenue was up 30 percent to $62.3 million, net income more than doubled to $12.9 million, and vacation interval sales were up 14 percent. Furthermore, notes payable and capital lease obligations fell more than $50 million since year end 2004. This company appears to be getting its financial house in least its trying to. Please see our earlier posts (2 part series 6/3/05 and 6/10/05) for more on this company, including the risks.

Our Next Report
Next week we'll publish research on a small pink sheet company which owns two ski resorts, and a nice chunk of land in the northeast.

*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.

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