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.

Sunday, November 12, 2006

Mobius Management (NASDAQ-MOBI)

We are a little hesitant to recommend MOBI after it has moved up from around $6.60 to Friday's close of $7.08, but here we go.

Our current valuation of MOBI is $12.69 per share (up from $11.59 a year ago). MOBI also had about $2.30 per share in cash (32% of market cap). We think that MOBI is a prime take-over candidate due to it's lackluster financial performance and stock price performance over the last couple of years. Also, if they can hit their Q4 sales projections the stock ought to move up just on the fact that they actually hit them and are moving in the right direction. The stock price has not cracked $8 in 2 years, and was as high as $15 back in early 2004 (take-over rumours), but is trading at only 56% of our valuation. MOBI needs to be sold to a bigger software company that can leverage MOBI's top notch customer list with other products and cut the sales and G+A overhead and make some real profits with MOBI's products. We expect that this will be another boring, wait-for-a-while stock. But these are the ones that usually get sold.

Be patient in buying this one. We have an small open order in at $6.70, which actually partially filled last week after it closed the previous day at over $7.00. We were about to cancel the order. So maybe some cheaper stock can be had due to tax season!

From their last press release, here's what they do:

Mobius Management Systems, Inc. ( is a leading provider of integrated solutions for enterprise archiving and records management. The company's comprehensive software suite integrates content across disparate repositories, supports regulatory compliance, and includes content-enabled applications that automate business processes. Mobius solutions have achieved industry-wide recognition for breadth of functionality, breadth of supported formats, and high-volume, high-demand performance. The Mobius customer base is made up of leading companies across all industries, including more than sixty percent of the Fortune 100.


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