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. Previous picks: VAST +71%(buy-out), DIGI +192% (buy-out), MDSI +59%(buy-out), OSTE +79%, NSDA +97%(buy-out). In 2006 we have closed 4 positions, NTCT +40%, DTLK +42%, ONXS +11%(buy-out)and CAW +22% (buy-out), and in 2007, IYXI.ob +44%(buy-out) MOBI +47%(buy-out), INFT +11% (buy-out), DTLK +25%, RITT +62% and MIVA +55%

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Monday, June 16, 2008

ARI Networks (ARIS.ob)

ARI announced Q3 earnings this morning. We think they are very good. Sales up only 1%to $4.158 million, but they earned $427,000 or $.06 a share (untaxed). For the 9 months ended 4/30/2008 they have now reported $.14 a share untaxed. They also moved into a net positive cash postition with cash balances exceeding debt by $700,000 or $.10 a share. At $1.40, this is a steal. Our valuation moved up a tad to $5.63 from $5.61.

ARI is trading at 25% of our valuation, looks like it will make close to $.19 a share in untaxed earings and is now in a positive net cash position.

BUY.

PS--We will be off this weekend due to a personal situation. See you on June 28th.

posted by Cheap Stock Investor | 6:05 AM

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