Take it Private! Hastings Entertainment

Zac Bissonnette — Mon, 02 Jun 2008 14:40:00 EST

Take it Private! is a new series looking at one company each week that, in my opinion, has no reason for being public. To find these companies, I screen for the following:

High Insider Ownership
A History of Solid Profitability
A paltry Price/Earnings and/or Price/Cash Flow multiple, and a reasonable Price/Book ratio.
A stagnant stock price accompanied by low volume indicating a lack of interest in the stock

My purpose in highlighting these companies? This screen can be a good way to find deep value stocks, especially companies that may be attractive to a strategic buyer, private equity firm or management-led buyout at a premium to the current share price. However, these profiles should not be interpreted as a recommendation to buy a certain stock.

For the inaugural column, let's take a look at Hastings Entertainment (NASDAQ: HAST).

According to Hastings' latest proxy statement, the company's current directors and officers own 33.91% of the company's stock. Chairman and CEO John Marmaduke alone owns 29% of the company. So Hastings definitely meets the first test: high insider ownership.

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