12/1/2007 Update--Great week for all
Big week for the markets last week. All the indices were up 2-3%. Our portfolio was up a whopping 12.5%, driven by a 36% gain in Datawatch and a 23% gain in Optio.
Last week we went 9 stocks up and 7 down.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +12.5%,+29.1% and +49% respectively. Since inception we are now 22 stocks up and 9 down( 6 of which are down less than 15%).
We were up 12.5% this past week and are now up 29.1% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from 2.5% (NASDAQ) to 3.0% (DOW) last week. The Dow is up 7.3%, NASDAQ is up 10.2 and the S+P 500 is up 4.4% for the year.
We are now up about 4 times the DOW, 2.9 times the NASDAQ and about 6.5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up about 4% and 5% for the year.
Since inception we have closed out the following positions:
2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)
2007-QADI +25%
2007-CIMT +50%
2007-BDR +19%
2007-LINN.ob -57% (mortgage business bust didn't help here)
The model portfolio assumes $10,000 invested in each stock (unless we double-up--then it is $20,000), less $10 commission each way (TD Ameritrade rate).
For the 15 stocks that we have closed out in 2006 and 2007 the average gain was 26%. We have closed out 11 positions in 2007 compared to 4 in all of 2006.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Down $.35 to $15.17.
SPNC did not participate last week. But everything seems to be be clicking along on plan here.
Now up 42%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), NEW Valuation $10.30 (was $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $6.95, up $1.85.
As we noted earlier in the week, DWCH had a blow-out quarter and is on a roll. Our valuation moved up 11% to $10.30, which is great.
Their former CEO--Robert Hagger who has announced his retirement--has continued to sell his shares each week at much lower prices. Guess it just proves that even insiders don't know everything.
DWCH is now trading at 67% of our valuation.
Now up 121%. HOLD, it this hits $8.00 in 2007-SELL 1/2
Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.02, down $.16.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
Now trading at 37% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 16%. BUY.
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $20.51 (was $23.22, $20.99, $20.52)
Closed at $11.99 up $.41.
Two Directors bought a total of 15,000 shares recently at about $11. This is very unusual.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
A buy-out is a decent possibility here.
Down 1%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Up $.25 to $8.85.
The "turnaround" is not yet done.
Boring to watch this--but so was DWCH. We like the recent insider buying again and are content to wait for this one.
Up .3%. BUY.
Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
Up $.21 to $7.21.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 8%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.15 to $6.20.
JP Morgan added 95,000 shares from 11/28-11/30, at $6.12 to $6.21. They now own 3,354,000 shares or about 10%.
They also filed an 8K last week. Seems they are sprucing up their senior officer change-of-control agreeemtnts. Wonder why?
Down 15%. HOLD
Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.58 to $2.01.
This is smelling like another LINN.ob right now. They announced their final eqrnings last week and it was worse than we expected. They spent all this money on acquisitions and ended up losing $2 million for the quarter and their margins plunged. We are not going to wait around for another 50%+ loser.
Worse, our valuation fell to only $1.77.
Down 39%. SELL
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Down $.06 to $6.30.
No news.
Down 17%. BUY
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
UP $.20 to $2.88.
No news.
UP 12%. HOLD
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.28 to $17.71.
Third Point, the guys who started all the commotion about getting the CEO out and selling the company---sold all their shares. Lots of speculation as to why--but no one knows for sure except Third Point.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.1 billion. Their pipeline, and know-how has to be worth something.
No matter, they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 12%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
UP $.17 to $4.29.
There is value here.
No news.
Trading at only 46% of our valuation.
Up .2%. BUY
OB-abies (Bulletin Board Listed Stocks)
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.50, up $.10.
ARI actually traded about 50,000 shares last week--YIKES. Maybe some day their managment will take care of us shareholders.
Now down 7%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.34 (was $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.50, up $.28.
OPTIO announced that they bought back 701,250 shares last week from a single shareholder at $1.20 per share. Not a big deal since they had over $9 million in cash and 25 million shares outstanding, but it looks like it removed the "overhang" on the sell side and allowed the stock to rebound last week.
OPTIO has cash of $.38 per share--25% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the "Strategic Alternatives" related to their Healthcare software division. In other words, a "for sale" sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this "division", so there is no way for us to determine what this could mean from a valuation standpoint.
It has been over 5 months now since their announcement--We would expect to hear an update SOON. They said in their latest earnings release that their healthcare business exceeded their goals. They better get a good price for this.
Still hoping we will see north of $2.00 this year--but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare "division".
UP 20%. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.87, down $.02.
The CEO has bought 8,000 shares recently at $.85 to $.95. He is also giving an interview on the Wall Street Reporter on December 12th. Looks like maybe they are trying to get some attention to the under-valued stock they have.
AVSO is trading at 29% of our valuation.
We are guessing $55 million of revenue this year and being profitable--which should yield a valuation of over $3.50 a share, and hopefully a share price of at least $2.00--up 100% from here.
Now down 12%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.17 (Was $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price moved up to $.34. Closed at $.30.
We actually traded over 40,000 shares last week.
Earning out 3 weeks ago. Sales were $5.35 million, up 68% from $3.2 million last year.
Without about $800,000 of patent enforcement costs, they would have broken even for the quarter, but this all dropped to the bottom line for a $808,000 loss--$.03 per share. One of these days CTIG is going to hit on all cylinders and get to $1.
Our valuation dropped a bit to $1.17, but, this is still trading at only 29% of our latest valuation.
Up 26% based on the ASK price. BUY
Last week we went 9 stocks up and 7 down.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +12.5%,+29.1% and +49% respectively. Since inception we are now 22 stocks up and 9 down( 6 of which are down less than 15%).
We were up 12.5% this past week and are now up 29.1% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from 2.5% (NASDAQ) to 3.0% (DOW) last week. The Dow is up 7.3%, NASDAQ is up 10.2 and the S+P 500 is up 4.4% for the year.
We are now up about 4 times the DOW, 2.9 times the NASDAQ and about 6.5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up about 4% and 5% for the year.
Since inception we have closed out the following positions:
2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)
2007-QADI +25%
2007-CIMT +50%
2007-BDR +19%
2007-LINN.ob -57% (mortgage business bust didn't help here)
The model portfolio assumes $10,000 invested in each stock (unless we double-up--then it is $20,000), less $10 commission each way (TD Ameritrade rate).
For the 15 stocks that we have closed out in 2006 and 2007 the average gain was 26%. We have closed out 11 positions in 2007 compared to 4 in all of 2006.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Down $.35 to $15.17.
SPNC did not participate last week. But everything seems to be be clicking along on plan here.
Now up 42%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), NEW Valuation $10.30 (was $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $6.95, up $1.85.
As we noted earlier in the week, DWCH had a blow-out quarter and is on a roll. Our valuation moved up 11% to $10.30, which is great.
Their former CEO--Robert Hagger who has announced his retirement--has continued to sell his shares each week at much lower prices. Guess it just proves that even insiders don't know everything.
DWCH is now trading at 67% of our valuation.
Now up 121%. HOLD, it this hits $8.00 in 2007-SELL 1/2
Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.02, down $.16.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
Now trading at 37% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 16%. BUY.
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $20.51 (was $23.22, $20.99, $20.52)
Closed at $11.99 up $.41.
Two Directors bought a total of 15,000 shares recently at about $11. This is very unusual.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
A buy-out is a decent possibility here.
Down 1%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Up $.25 to $8.85.
The "turnaround" is not yet done.
Boring to watch this--but so was DWCH. We like the recent insider buying again and are content to wait for this one.
Up .3%. BUY.
Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
Up $.21 to $7.21.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 8%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.15 to $6.20.
JP Morgan added 95,000 shares from 11/28-11/30, at $6.12 to $6.21. They now own 3,354,000 shares or about 10%.
They also filed an 8K last week. Seems they are sprucing up their senior officer change-of-control agreeemtnts. Wonder why?
Down 15%. HOLD
Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.58 to $2.01.
This is smelling like another LINN.ob right now. They announced their final eqrnings last week and it was worse than we expected. They spent all this money on acquisitions and ended up losing $2 million for the quarter and their margins plunged. We are not going to wait around for another 50%+ loser.
Worse, our valuation fell to only $1.77.
Down 39%. SELL
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Down $.06 to $6.30.
No news.
Down 17%. BUY
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
UP $.20 to $2.88.
No news.
UP 12%. HOLD
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.28 to $17.71.
Third Point, the guys who started all the commotion about getting the CEO out and selling the company---sold all their shares. Lots of speculation as to why--but no one knows for sure except Third Point.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.1 billion. Their pipeline, and know-how has to be worth something.
No matter, they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 12%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
UP $.17 to $4.29.
There is value here.
No news.
Trading at only 46% of our valuation.
Up .2%. BUY
OB-abies (Bulletin Board Listed Stocks)
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.50, up $.10.
ARI actually traded about 50,000 shares last week--YIKES. Maybe some day their managment will take care of us shareholders.
Now down 7%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.34 (was $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.50, up $.28.
OPTIO announced that they bought back 701,250 shares last week from a single shareholder at $1.20 per share. Not a big deal since they had over $9 million in cash and 25 million shares outstanding, but it looks like it removed the "overhang" on the sell side and allowed the stock to rebound last week.
OPTIO has cash of $.38 per share--25% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the "Strategic Alternatives" related to their Healthcare software division. In other words, a "for sale" sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this "division", so there is no way for us to determine what this could mean from a valuation standpoint.
It has been over 5 months now since their announcement--We would expect to hear an update SOON. They said in their latest earnings release that their healthcare business exceeded their goals. They better get a good price for this.
Still hoping we will see north of $2.00 this year--but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare "division".
UP 20%. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.87, down $.02.
The CEO has bought 8,000 shares recently at $.85 to $.95. He is also giving an interview on the Wall Street Reporter on December 12th. Looks like maybe they are trying to get some attention to the under-valued stock they have.
AVSO is trading at 29% of our valuation.
We are guessing $55 million of revenue this year and being profitable--which should yield a valuation of over $3.50 a share, and hopefully a share price of at least $2.00--up 100% from here.
Now down 12%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.17 (Was $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price moved up to $.34. Closed at $.30.
We actually traded over 40,000 shares last week.
Earning out 3 weeks ago. Sales were $5.35 million, up 68% from $3.2 million last year.
Without about $800,000 of patent enforcement costs, they would have broken even for the quarter, but this all dropped to the bottom line for a $808,000 loss--$.03 per share. One of these days CTIG is going to hit on all cylinders and get to $1.
Our valuation dropped a bit to $1.17, but, this is still trading at only 29% of our latest valuation.
Up 26% based on the ASK price. BUY
posted by Cheap Stock Investor | 8:06 AM
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