Deerfield Beach, FL / Aug 14, 2014 / When investing in the stock market, investors generally look for companies that are in familiar businesses. Understanding a company’s business model certainly makes analysis easier. However, beating the market with these stocks can generally be a challenge. That is why investors should also look at companies that are involved in unusual businesses. The main advantage of investing in such companies is that they do not face significant competition. This means that if their business model is sound they can generate significant returns and even beat the market on a consistent basis.
In this article, we will look at some of these companies. In fact, two of the companies we will focus on are in a very unusual business, treasure hunting. In recent years, searching the sea for sunken treasures has become a big business. There are hundreds of billions of dollars of potential in this industry. There are treasure bearing ships that have historical artifacts, coins, emeralds that date back hundreds of years lying at the bottom of the sea waiting to be brought to the surface.
CNN, citing estimates from UNESCO, notes that there could be as many as three million shipwrecks scattered across the bottom of the world’s oceans. The easiest way for investors to gain exposure to these treasures is by investing in underwater salvage and exploration companies. So let’s focus on two companies that are in the business of searching the sea for treasures. Also, we will look at some other companies that are in unusual businesses, including social media and marijuana.
Seafarer Exploration Corp. (OTCQB: SFRX): Based in Tampa, Florida, Seafarer Exploration is an underwater salvage and exploration company. The company is focusing on the development of the infrastructure required to engage in archaeologically-sensitive research, documentation, exploration and recovery of historic shipwrecks.
Recently, Seafarer Exploration made the news after the company announced that it obtained a 3-year “Dig and Identify” permit for the shipwreck site south of Cape Canaveral from the Florida Bureau of Archaeology Research. Commenting on this huge development, Kyle Kennedy, CEO of Seafarer, said that the company is extremely excited about the prospects of this site. Kennedy added that there have been several artifacts previously found on the site and they have begun their exploration of the site and recently recovered new encouraging artifacts, including a cannon! To view these and newly discovered artifacts and underwater exploration videos visit their website http://www.seafarercorp.com/.
While the permission to conduct research on this site is a major development for Seafarer, the company is not complacent and is pursuing other potential sites. The sites are in Florida and the U.S. east coast. In addition, Kennedy noted that the company had some correspondence about sites outside the U.S.
Seafarer Exploration shares have been seeing significant interest from investors. In the past three months, the company’s shares have gained more than 25%, with daily average trading volume rising to over 1.5 million shares.
Odyssey Marine Exploration Inc. (NASDAQ: OMEX): Like Seafarer Exploration, Odyssey Marine is also engaged in archaeologically sensitive exploration and recovery of deep-ocean shipwrecks. Odyssey Marne Exploration is also based in Tampa, Florida.
Odyssey Marine Exploration this week provided an update on the Environmental Impact Assessment (EIA) for the proposed “Don Diego” project. The project is currently undergoing final reviews before government filing. Earlier this month, Odyssey Marine announced that it placed operational reports and inventories of items recovered from the SS Central America shipwreck site on its website. The company has been working under contract to Ira Owen Kane since April this year. Kane is the receiver for Recovery Limited Partnership (RLP).
The inventories recovered from the shipwreck include gold ingots, nuggets, dust and a wide variety of gold coins from $20 double eagles, down through $10, $5, $2.50 and $1 gold coins.
Odyssey Marine shares, however, have been struggled in the past year. Year-to-date, the stock has fallen more than 40%. In the past one year, the stock is down nearly 65%.
Twitter Inc. (NYSE: TWTR): While social media might not be an unusual business now, it was relatively unknown only a few years ago. Today, though, social media companies are huge and Twitter is one of them. With a market capitalization of over $27 billion, Twitter is in fact one of the biggest in the social media space.
On Tuesday, Twitter reported better-than-expected user growth for the second quarter, driven by product tweaks and services that were focused on the soccer World Cup. The company’s users increased to 271 million. While this is impressive, it is still well below social media giant Facebook’s 1.3 billion users. Twitter’s timeline views also beat expectations for the quarter.
Following a better-than-expected quarter, Twitter now expects third-quarter revenue to be between $330 million and $340 million, beating Street estimates of $323.7 million.
The strong results and outlook have boosted Twitter shares in trading on Wednesday. At last check, the stock was up more than 20% to $46.36. The rally has allowed Twitter to cut some of its losses for the year. However, year-to-date, the social media stock is still down more than 23%.
Medical Marijuana Inc. (OTC: MJNA): With several states in the U.S. legalizing the use of marijuana for medicinal and recreational purposes, marijuana stocks have been seeing a lot of interest. However, the marijuana business remains unusual.
Medical Marijuana is a well-recognized company in the marijuana business. The company has a diversified portfolio of products, services, technology and businesses primarily focused on the cannabis and hemp industries. Earlier this month, Medical Marijuana announced its financial results for the first quarter of 2014.
The San Diego, California-based company said that its performance in the first quarter exceeded expectations. The company’s product sales revenue for the quarter was $4.01 million, compared to $1.94 million reported for the prior quarter.
Although the company more than doubled its revenue, its shares have disappointed in the past month, falling almost 9%. However, year-to-date, Medical Marijuana shares are still up more than 35%.
Collectors Universe Inc. (NASDAQ: CLCT): Based in Santa Ana, California, Collectors Universe is a provider of authentication and grading services to dealers and collectors of high-value coins, trading cards, event tickets, autographs and memorabilia. The company focuses on three areas; coins, trading cards and autographs, and other high-end collectibles.
Earlier this week, Collectors Universe announced that its Board of Directors declared a quarterly cash dividend of $0.325 per share for the first quarter of fiscal 2015.
Collectors Universe shares have done well so far this year, gaining more than 16%, compared to a gain of more than 7% for the NASDAQ.
Source: Emerging Equities Report