Spokane Journal of Business

Ambassadors’ shares up 60 percent since April

Analyst downgrades stock because of appreciation since spinoff was announced

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A regional brokerage company recently downgraded its rating on Spokane-based Ambassadors International Inc.s stock to neutral from strong buy in response to a dramatic rise in Ambassadors stock price in the last few months.

Ambassadors Internationals stock price has risen 60 percent since the travel-services company announced in April that its considering spinning off its educational-travel business into a separate company.

The stock brokerage, Great Falls, Mont.-based D.A. Davidson & Co., says of its decision to downgrade its recommendation that most of the benefits of such a spinoff are reflected in the current share price.

Shares of Ambassadors International closed at $27.10 on June 22, its highest price in three years. The companys shares closed at $16.90 on April 16, the day the company announced the possible spinoff.

Jeff Thomas, Ambassadors chief financial officer, says the company isnt fazed by D.A. Davidsons downgrade. We still see a lot of growth in the future, he says.

Also helping to boost Ambassadors share price recently is the likelihood that the companys stock soon will be included in the prestigious Russell 3000 index, says James Bellessa, a senior research analyst with D.A. Davidson who follows Ambassadors International.

There is a group of investors who invest in index funds, so inherently stocks in index funds get boughtit broadens the shareholder base, Bellessa says.

In addition, Ambassadors posted an after-tax gain earlier this month of $5.5 million, or 57 cents per share, from the sale of its minority interest in another travel business, SATO Travel Holding Co. Inc.

Bellessa expects Ambassadors to post strong second-quarter results and to announce record student travel for the period, which will end June 30. He is anticipating Ambassadors per-share earnings to be $1.04 for the quarter, excluding the gain on the sale of SATO Travel.

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