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.

Wednesday, November 28, 2007

Datawatch (NASDAQ-DWCH) +77%

DWCH announced great Q4 yesterday. Sales up 29% to $6.9 million and they made $.14 per share (untaxed). Cash rose to $3.8 million ($.64 per share). Our valuation went up to $10.30 a share from $9.28 (11%). The stock hit $6.45 briefly yesterday but closed at $5.58.

Even though we are now up 77% on DWCH, it is only trading at 54% of our valuation--so it is still a good value. W would expect a bit of a rebound today after it gave up early gains yesterday afternoon. We would look for at least $7 on this--maybe much more if their sales and earnings acceleration continue for another quarter or 2.



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