12/22/2007 Update
Merry Christmas all. What started out as a bad week for the markets and us, turned out OK. Getting to the end of tax-loss selling and a lot of bad news-hopefully. All the indices were up .8-2.1%. Our portfolio was up .4%.
Last week we went 7 stocks up, 8 down and 1 even.
For 2008 our favorite candidates for big gains are MEDW, AVSO.ob and BDAY. Although of all our stocks, we are only a bit worried about CLZR, as it continues to sink and is now our biggest DOG.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +.4%,+17.8% and +35.9% respectively. Since inception we are now 19 stocks up and 13 down( 10 of which are down less than 15%).
The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from .8% (DOW) to 2.1% (NASDAQ) last week. The Dow is up 7.9%, NASDAQ is up 11.5% and the S+P 500 is up 4.6% for the year.
We are now up about 2.2 times the DOW, 1.6 times the NASDAQ and about 4 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up 4.5% and 5.1%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)
2007-TISA -39% (take some tax loss for 2007 due to disappointing results.
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 16 stocks that we have closed out in 2006 and 2007 the average gain was 22%. We have closed out 12 positions in 2007 compared to 4 in all of 2006.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Up $1.38 to $15.80.
After sinking down to the low $14 level, SPNC zoomed back up. Things continue to look just fine here.
Now up 48%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $10.30 (was $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $6.18, down $.02.
We did manage to buy some more last week as low as $5.50.
The ex-CEO keeps cashing in options and selling. This looks like it will go on for a while. Maybe the company ought to find a buyer for all his shares. Then this stock will fly.
DWCH is now trading at 60% of our valuation.
Now up 96%. 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 $4.28, up $.16.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
ECOM Ventures announced last week that it will merge with Model Reorg. Inc. ECOM will pay for it with shares, so that Nussdorf and family will end up owning 70% of ECOM. So maybe this was why he has been selling some PARL shares--lots of expenses and maybe some taxes to pay?
If they can get this deal done, can one with PARL be far behind?
Now trading at 40% of our valuation.
The new management has 2.0 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 11%. HOLD.
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 $10.36 down $.60.
No one cares about this stock right now.
It is a quality company--just French.
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 14%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.38 (was $8.82 before double-up), NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.10 to $7.88.
Looks like we were a few days premature with our double-up call as BDAY actually sank to under $7 for a brief time last week.
The "turnaround" is not yet done.
Earnings out January 3rd, after the close.
We like the recent insider buying again and are content to wait for this one.
Down 6%. 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)
down $.63 to $6.26.
We can't stand it anymore. Add another $10,000 on MEDW. This is just too cheap to ignore. New Buy price will be $6.52.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 6%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.43 to $5.61.
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 in December. Seems they are sprucing up their senior officer change-of-control agreeemtnts. Wonder why? Meanwhile the stock just continues to sink and is now our biggest DOG.
Down 23%. HOLD
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Up $1.18 to $9.16.
No news to explain the big rise over the past 3 weeks, but we like it.
UP 21%. HOLD
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.38 (Was $2.62 before another $10,000 and was $3.00 forst before double up), Valuation $7.58 (was $7.59)
Up $.01 to $2.10.
MIVA sank to under $2 last week and then rebounded on Friday. Tax loss selling here we think.
W. Blair disclosed a 10% stake in Miva in a 13G filing. We think this is overblown on the downside and are going to add another $10,000 here. New average BUY Price will be $2.38 per share.
No news.
Down 12%. BUY
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.09 to $17.74.
PDLI announced the sale of a $30 million a year in sales drug, last week--for $200 million.
Looks like our 3X product revenue valuation may be a tad low (below). The stock sank on this news. Makes no sense to us.
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%. BUY
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.09 to $3.73.
There is value here.
No news.
Trading at only 40% of our valuation.
Down 13%. 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), NEW Valuation $5.71 (was $5.49, $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.60, up $.05.
Earnings last week were great. Sales up 21% and they made money. The stock initially went down! This market just stinks for mini/micro caps, and ARI does little to get any investor attention. Wake up management--you have a great little compnay here worth 3X what it is selling for.
Now down .7%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.74 (was $2.34, $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.30, up $.10.
OPTIO has cash of $.41 per share--32% 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 6 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--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 4%. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.93 (Was $.99 and $1.19 before adding $10,000-twice), Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.85, up $.02.
Nice presentation filed in their 8K 2 weeks ago. Couple of nice mentions--including in Smart Money of the CEO interview with the Wall Street Reporter. Sigma Opportunity Fund has been buying more shares. I think it is time to add more here.
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 9%. 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 unchanged $.35. Closed at $.30.
Latest quarterly results were: Sales of $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 $1.00.
Our valuation dropped a bit to $1.17, but, this is still trading at only 30% of our latest valuation.
Up 30% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.08 Valuation $2.08
Closed at $.97, down $.13.
LTUS, filed an impressive investor presentation on Form 8K in early December.
As noted, China stocks are risky, but based on their published information we just cannot figure out why this stock is trading so low.
LTUS is on track to make $.18 a share this year. Even if these earnings were taxed at U.S. tax rates, that would be about $.12 a share. That is a PE of less than 10, for a company growing revenues at 50% year-over-year. We may continue to buy more if the price stays in this range.
Down 10%. BUY
Last week we went 7 stocks up, 8 down and 1 even.
For 2008 our favorite candidates for big gains are MEDW, AVSO.ob and BDAY. Although of all our stocks, we are only a bit worried about CLZR, as it continues to sink and is now our biggest DOG.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +.4%,+17.8% and +35.9% respectively. Since inception we are now 19 stocks up and 13 down( 10 of which are down less than 15%).
The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from .8% (DOW) to 2.1% (NASDAQ) last week. The Dow is up 7.9%, NASDAQ is up 11.5% and the S+P 500 is up 4.6% for the year.
We are now up about 2.2 times the DOW, 1.6 times the NASDAQ and about 4 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up 4.5% and 5.1%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)
2007-TISA -39% (take some tax loss for 2007 due to disappointing results.
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 16 stocks that we have closed out in 2006 and 2007 the average gain was 22%. We have closed out 12 positions in 2007 compared to 4 in all of 2006.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Up $1.38 to $15.80.
After sinking down to the low $14 level, SPNC zoomed back up. Things continue to look just fine here.
Now up 48%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $10.30 (was $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $6.18, down $.02.
We did manage to buy some more last week as low as $5.50.
The ex-CEO keeps cashing in options and selling. This looks like it will go on for a while. Maybe the company ought to find a buyer for all his shares. Then this stock will fly.
DWCH is now trading at 60% of our valuation.
Now up 96%. 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 $4.28, up $.16.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
ECOM Ventures announced last week that it will merge with Model Reorg. Inc. ECOM will pay for it with shares, so that Nussdorf and family will end up owning 70% of ECOM. So maybe this was why he has been selling some PARL shares--lots of expenses and maybe some taxes to pay?
If they can get this deal done, can one with PARL be far behind?
Now trading at 40% of our valuation.
The new management has 2.0 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 11%. HOLD.
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 $10.36 down $.60.
No one cares about this stock right now.
It is a quality company--just French.
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 14%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.38 (was $8.82 before double-up), NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.10 to $7.88.
Looks like we were a few days premature with our double-up call as BDAY actually sank to under $7 for a brief time last week.
The "turnaround" is not yet done.
Earnings out January 3rd, after the close.
We like the recent insider buying again and are content to wait for this one.
Down 6%. 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)
down $.63 to $6.26.
We can't stand it anymore. Add another $10,000 on MEDW. This is just too cheap to ignore. New Buy price will be $6.52.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 6%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.43 to $5.61.
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 in December. Seems they are sprucing up their senior officer change-of-control agreeemtnts. Wonder why? Meanwhile the stock just continues to sink and is now our biggest DOG.
Down 23%. HOLD
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Up $1.18 to $9.16.
No news to explain the big rise over the past 3 weeks, but we like it.
UP 21%. HOLD
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.38 (Was $2.62 before another $10,000 and was $3.00 forst before double up), Valuation $7.58 (was $7.59)
Up $.01 to $2.10.
MIVA sank to under $2 last week and then rebounded on Friday. Tax loss selling here we think.
W. Blair disclosed a 10% stake in Miva in a 13G filing. We think this is overblown on the downside and are going to add another $10,000 here. New average BUY Price will be $2.38 per share.
No news.
Down 12%. BUY
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.09 to $17.74.
PDLI announced the sale of a $30 million a year in sales drug, last week--for $200 million.
Looks like our 3X product revenue valuation may be a tad low (below). The stock sank on this news. Makes no sense to us.
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%. BUY
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.09 to $3.73.
There is value here.
No news.
Trading at only 40% of our valuation.
Down 13%. 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), NEW Valuation $5.71 (was $5.49, $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.60, up $.05.
Earnings last week were great. Sales up 21% and they made money. The stock initially went down! This market just stinks for mini/micro caps, and ARI does little to get any investor attention. Wake up management--you have a great little compnay here worth 3X what it is selling for.
Now down .7%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.74 (was $2.34, $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.30, up $.10.
OPTIO has cash of $.41 per share--32% 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 6 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--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 4%. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.93 (Was $.99 and $1.19 before adding $10,000-twice), Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.85, up $.02.
Nice presentation filed in their 8K 2 weeks ago. Couple of nice mentions--including in Smart Money of the CEO interview with the Wall Street Reporter. Sigma Opportunity Fund has been buying more shares. I think it is time to add more here.
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 9%. 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 unchanged $.35. Closed at $.30.
Latest quarterly results were: Sales of $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 $1.00.
Our valuation dropped a bit to $1.17, but, this is still trading at only 30% of our latest valuation.
Up 30% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.08 Valuation $2.08
Closed at $.97, down $.13.
LTUS, filed an impressive investor presentation on Form 8K in early December.
As noted, China stocks are risky, but based on their published information we just cannot figure out why this stock is trading so low.
LTUS is on track to make $.18 a share this year. Even if these earnings were taxed at U.S. tax rates, that would be about $.12 a share. That is a PE of less than 10, for a company growing revenues at 50% year-over-year. We may continue to buy more if the price stays in this range.
Down 10%. BUY
posted by Cheap Stock Investor | 6:23 AM
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