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, June 03, 2007

Mediware Information Systems, Inc. (NASDAQ-MEDW)

Mediware Information Systems, Inc. (NASDAQ--MEDW)
Price June 1, 2007-$6.98

I have been watching MEDW for a while, and the price has now fallen into our buying range.

Q3 results (3/31/2007) showed an 11% sales increase and $831,000 net income--$.10 per share (fully taxed and up from the prior year of $.08). There a bit over 8.4 million shares outstanding and they reported 73% gross margins and have $2.53 a share in cash (36% of market cap). There has been a lot of selling pressure of late, as the price has dropped from $8.60 at the end of April. Possibly a fund getting out. We just don’t see the reason for this drop.

With over $2.50 a share in cash, and these margins—and making money, we think this is a good bet.

We bought some this week at $6.99 and $6.95. Average daily trading volume has been nearly 30,000 shares.

We think anything under $7.00 is a good price.

MEDW is trading at 52% of our valuation.

About Mediware Information Systems, Inc.
Mediware delivers powerful software solutions that encapsulate patient care instructions, reinforce patient safety practices and improve efficiencies to lower costs. Mediware targets three primary areas of patient care -- Medication Management, Perioperative Management and Blood Management (transfusion, inventory and donor practices) -- with specialized solutions that are proven in more than 1,000 client installations. Mediware's customers include prestigious hospitals, clinics, correctional institutions, blood centers and other public and private health care institutions throughout the world. For more information about Mediware products and services, visit our web site at


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