Cheap Stocks

We focus on undervalued small-cap stocks. Usually with a large cash cushion. We have developed a valuation formula that has been highly successful, especially on small tech stocks. Since 2006, we have closed out 49 stock positions with an average gain of 37%. 9 stocks have been taken over.

Tuesday, July 25, 2006

Datawatch-out

DWCH released 6/30 results this morning. Dissappointing to say the least. Sales were down from last year despite the recent acquisition being in effect for 2 months of the quarter. Stock got hammered on low volume (22,000 shares right now) down as low as $2.51. Seems to be rising a bit now, but big damage has been done. Lost $315,000 for the quarter--merger related expenses cited--but not how much. New valuation has come down to $7.63--still, at this price the discount to valuation says hold, and maybe buy more and average down a bit. Think this is an overreaction in a "thin" stock.

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