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.

Saturday, July 15, 2006

What a Week

What a crummy market. It has gotten very painful, but despite the carnage out there we did not really have too bad a week. MIVA is our biggest dog, but we are hopeful that it will rebound--it will just take time. A number of companies we are watching warned on earnings over the last several weeks, got hammered and could be buys--if this market ever looks like it will turn around. Last week we had 2 up, 7 down, 1 even. Since the start of the year we are still 10 up and 3 down and 1 even. No buys or sells this past week.

CAW-(Buy price $9.45, Valuation $18.40). Closed down $.43 for the week at $9.98. Yield about 3%. Up 6% so far. HOLD.

QADI-(Buy price $6.93, Valuaton $11.86). Closed at $7.70, down $.15. Up 11% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)--Closed at $17.26, down $1.44 from last week. Now down 11%. Still a BUY.

MIVA-(Buy price $3.80, Valuation $9.10). MIVA closed at $2.80, down $.75 from last week. It was a bad time to issue a warning. Now down 26% on this one. HOLD.

Datawatch-(Buy price $3.66, Valuation $9.31). Closed at $3.60, up $.12 from last week, still a loser--down 2%. The discount to the valuation is just too big. Still a BUY.

Inforte-(Buy price $4.11, Valuation $7.32). Up $.14 to $4.79 last week. Still up 17%. HOLD for $6.00.


Linn.ob-(Buy price $.36, Valuation $.79). Closed at $.36, even on the week and YTD. Still a BUY.

OPTO.ob-(Buy price $1.25, Valuation $2.88). Closed at $1.26, down $.04 from last week. Weird trading on Friday again. Jumped to $1.51 on about 20,000 shares, than dropped to $1.26 when someone put 10,000 shares for sale at $1.31--and only got 500 done. Gut says to snap these up if they are still available on Monday--but this market is too scary to buy anything right now. In the plus column up 1% to date. BUY.

AVSO.ob-(Buy price $1.19, Valuation $3.81). Stock fell another $.10 from last week to $1.95. Now only up 64%. BUY

CTIG.ob-(Buy price $.27 ask, Valuation $.82). Ask price jumped to $.45 last week. Closed at $.35. Cash is $.28 per share. Up 67% (based on asked price). HOLD.

IYXI.ob-(Buy price $1.91, Valuation--over $3.00). Closed down $.02 from last week at $2.65, up 39% so far. Jumped $.20 one day last week--then the market took over. Maybe some good news on quarterly results coming? HOLD


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