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, April 30, 2006


ONXS-- (Onyx) closed the week at $4.54 up 11% from our $4.10 buy price. No news on the CDC takeover offer status-or what their investment bankers are up to . Valuation remains at $7.12. HOLD

Linn.ob--jumped to $.48 ask from our $.36 (ask) buy price. Up 33%. They announce earnings this week on May 4th. Hang on--valuation is $.79. Volume last week was over 1 million shares compared to under 100,000 the week before. Looks like it is being discovered! HOLD
OPTO.ob--closed the week on the upswing at $1.43, up 14% from our $1.25 buy price. Valuation is $3.09. Been buying more at $1.35 or less. HOLD
AVSO.ob--closed at $2.39, up 101% from our $1.19 buy price. Valuation still over $3.00. Holding for north of $2.50. HOLD
IYXI.ob--closed at $2.43, up 27% from our $1.91 buy price and slowly climbing back from the earnings disappoinment a few weeks ago. HOLD
CTIG.ob--slipped back a bit to $.35 ask, still up 30% from our $.27 buy price. Valuation $1.10. HOLD

Inforte (INFT)

INFT also announced earnings on 4/25. Sales were up 15% and they made $.03 a share up from a loss last year. Cash was $30.1 million or $2.59 per share--still more than 50% of stock price. New valuation is $7.32 a share up from $6.85. Stock moved up steadily to $4.75 on Friday--up 16% from our $4.11 buy price. Hold--or buy a little if you have none.

Datawatch (DWCH)

DWCH announced earnings on 4/25. They were very good. Sales were up 6% and they made $.04 per share. They released some details on their new acquisition. I believe this will be accretive to earnings going forward. They will use most of their cash for this deal, but have arranged a $3 million credit line, so they should be ok. Valuation has moved up (incorporating the estimated impact of the acquisiton) to $9.31 per share from previous $7.50. Buying more at this level since stock did nothing--closing Friday at $3.77 up only slightly from our $3.66 buy price.


Anounced preliminary Q1 results on 4/21. Not bad. Sales are expected to be over $44 million with positive EBITDA ($.5 million), and a GAAP loss of $.12--slightly higher than expected due to higher foreign taxes. Stock jumped to $4.40--up 16% from our $3.80 buy price. Cash grew to $39.7 million--over a buck a share. Looking good. Will update our $9.10 valuation when full numbers get published. Hold--or buy a little at this price if you did not get in.

Saturday, April 15, 2006

Lion Inc. (LINN.ob)

Another OB-aby.

Lion Inc. Valuation is $.79, trading at $.34-$.36. Thin volume as with most of our OBabies--until everyone else figures it out!


We got our second close-out this past week--Datalink for a nice 45% gain in a crappy market. We are hoping these will be next!

DWCH--continues to do nothing. Closed at $3.74, up slightly from our $3.66 buy price. Valuation is $7.50. Buy
MIVA--Closed at $3.62 down from our$3.80 buy price. Nothing has changed, valuation still $9.10. Buy
ONXS--closed at $4.45 up from our $4.10 buy price. Hired Piper to evalaute CHINA takeover offer--and hopefully others. Valuation $$7.12. Hold
INFT--closed at $4.47 up from our $4.11 buy. Valuation $6.85. Hold


OPTO.ob--starting to move on some volume. Closed at $1.45. Valuation $3.09, but price $1.25. Buy
AVSO.ob--Valuation $3.14. Closed at $2.35. Buy price $1.19. Hold for at least $2.50
IYXI.ob--holding for a bounce back into the three's.
CTIG.ob--volume perking up. Closed at $.37 bid, $.44 ask--up from out $.27 buy price. Valuation is $1.10. Looking for $.75 at least. Hold

Wednesday, April 12, 2006

Datalink (DTLK)

Cha-Ching. DTLK released earnings this morning. They were goooooooood. Stock soared to over $6, We sold 3/4's of our position at $6.25, this morning and closed out the remaining 25% at $5.75 this afternoon for a gain of about 45%. we'll take it.

Monday, April 03, 2006


Closed at $2.25 down $.75 today. Held this one too long, obviously. Hit their sales numbers, missed their loss number by a mile. Forecasting $150 million in sales this year and to be profitable--but not until the second half of the year. They have another possible aquisition pending. These guys are swinging for the fences for sure. If the banks support them this will be a huge winner. But gotta make it till then. Hold for now.

Saturday, April 01, 2006


MIVA closed at $4.08 on Friday. Now up 5% from our $3.88 buy. Buy
DTLK closed at $4.11, still below our buy price of $4.24--down 3%--Buy
DWCH-closed at $3.85 down last week but still 5% higher than our $3.66 buy price. Buy.
INFT--closed at $4.38 up 7% from our $4.11 buy price. Hard to tell if this is starting its move up or not due to the low volume. Buy
ONXS--closed at $4.75. Now up 16% from $4.11 buy price. No word on take over offer from CSC, but Loeb Partners just increased thier holdings to 7.25% of ONXS. Bought 273,000 shares from Feb. 1 to March 24th at $3.77 to $4.57 per share. A good sign I think of a higher offer. Hold.

OPTO.ob--closed at $1.46, up 17% from our $1.25 buy price. Good earnings, volume picing up and a over $3 a share valuation--looking for over $2 soon. Buy.
AVSO.ob--closed at $2.15. Down $.09 last week but still up 81% from our $1.19 buy price. Hold for $2.50 or more.
IYXI.ob--closed at $3.00 unchanged last week and up 57% from our buy at $1.91. Filed their 10k on Friday. Sales were $25 million for the quarter, losses were high. Conference call on Monday will tell the tale for 2006 and where the stock goes from here. Hold.
CTIG.ob--released earnings last week also. Sales of $15 million and profitable for the year. A few people noticed, but not many and the price moved up to $.30 ask from our buy price of $.27--up 11%. Buy to $.30.