8/11/2007 Update--Wild Ride
Last week we went 6 up, 8 down and 2 even. Our biggest DOGS are: PARL, LINN.ob, AVSO.ob, BDR, ARIS.ob, ILOG and MEDW. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -1.0%,+17.0% and +35.0% respectively. Since inception we are now 17 stocks up and 7 down (3 of which are down less than 10%).
We were down 1% this past week and are now up 17.0% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from .4% (DOW) to 1.4% (S+P 500) last week, and are all now up from 2.5% (S+P 500) to 6.2% (DOW) for the year.
We are now up more than double the DOW, triple NASDAQ and 7 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up about 2.5% for the year.
Since inception we have closed out the following positions:
2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007 DTLK +25% (2 weeks)
The model portfolio assumes $10,000 invested in each stock (unless we double-up--then it is $20,000), less $10 commission each way (TD Ameritrade rate).
For the 10 stocks that we have closed out in 2006 and 2007 the average gain was 35%. We are tired of watching our stocks go up--and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 6 positions in 2007 compared to 4 in all of 2006.
Earnings on BDR last week.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.44 to $13.84 last week.
Short Interest was 5.7 million at July 13th.
We got some huge volume last week, almost 2 million shares on 2 days and over 900,000 on Friday. May be some short covering going on that is driving the price and volume. Price got as high as $15.25, but got nailed on Friday.
We still think $18-$20 is in the cards for this year.
Guidance has not been updated yet for the TURBO Booster. If this market didn't stink so bad, helping to bail the shorts out, I think we would be North of $15 (and we were for a little while at least).
Now up 30% so far. HOLD.
QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, Valuation $11.27 (was $15.92, $13.69, $13.73 and $11.86)
Closed at $8.36, up $.49.
Our valuation has fallen from $15.92 to $11.27, but if they can hit their guidance for the year, the valuation would be approximately $14.60--75% above the current price. But since they seem to have trouble hitting their numbers--we will hold for now.
Earnings coming out Thursday, 8/23 after the close.
Up 21% so far. HOLD.
PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $21.16, down $1.75 last week.
Like we have said in the past--this is a very volatile stock.
Over the long haul (years) we like this stock, but right now the play is a sale of the company due to Third Points involvement.
Activist investment firm Third Point LLC, owns 11.2 million shares or 9.7% of the company and has more than $200 million invested. They continue to exert pressure on PDL to improve shareholder value.
If this reaches $30 in 2007, without a buy-out, we would sell.
Now up 10%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $5.10, down $.25 for the week.
DWCH is now trading at 55% of our valuation. We have been buying more in the $5 to $5.40 range.
Now up 59%. BUY.
Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $6.12 (was $6.65 before double up), Valuation $8.63 (Was $13.77)
PARL closed at $3.35, down $.03 last week. It actually fell to the mid-$2 range last week.
New management needs to get to work on this one fast.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 45%. HOLD.
Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, NEW Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.43 up $.01 for the week.
Earnings last week. Not great. Lost $822,000 after a $558,000 inventory reserve. Excluding the inventory charge, our valuation moved up to $4.31. Including the the charge, it fell slightly to $3.96. BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up.
Trading at 33% of our valuation.
Down 22%. HOLD
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.92 (was $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $12.06 down $.20 for the week.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 7%. BUY
Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Down $.54 to $9.35 last week.
Stephen Roseman has still been buying a bit of BDAY. Another 7,300 shares at prices from $9.01 to $10.00 in late July and early August. Now has 619,000 shares or 7.8% of the company.
With the insider buying in the last couple of months, we like this stock alot.
Up 6%. BUY on dips below $9.00
Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.98, Valuation $13.40
Up $.07 to $6.65 last week.
No news.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 4%. BUY
OB-abies (Bulletin Board Listed Stocks)
Nobody is liking our OB-abies lately (except maybe OPTIO). Just not their "time" yet. Patience.
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.78 (was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.66, up $.06 last week.
No news.
Now down 7%. BUY. Still a Huge valuation gap here.
Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.49 (was $.57, $.62, $.66 and before that $.79)
Closed at $.14, even last week.
No news.
Lion management has announced the formation of a "Strategic Review Committee" to explore the sale of the company or parts of the company. They said that they has received "preliminary" and "conditional" indications of interest from parties interested in acquiring "portions of the company". Hopefully something will happen here.
Down 39%. Hold.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.62, up $.08 last week.
Has cash of $.44 per share--27% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the "Strategic Alternatives" related to their Healthcare software division. In other words, a "for sale" sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this "division", so there is no way for us to determine what this could mean from a valuation standpoint.
Still hoping we will see north of $2.00 this year--but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare "division".
No news.
Up 30% so far. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $1.19,Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, down $.05 last week.
AVSO announced a restructuring last month that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting "significantly" better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 27% of our valuation.I bought some more on Friday at $.80. Just too CHEAP.
Now down 24%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.29 (Was $1.42, $1.28 $1.13, $1.05, $.82)
Ask price stayed the same last week at $.38. Closed at $.36.
This is still trading at only 29% of our latest valuation, but until the VOIP business stops losing money, we are not buyers--yet.
Up 41% based on the ASK price. HOLD.
We were down 1% this past week and are now up 17.0% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from .4% (DOW) to 1.4% (S+P 500) last week, and are all now up from 2.5% (S+P 500) to 6.2% (DOW) for the year.
We are now up more than double the DOW, triple NASDAQ and 7 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up about 2.5% for the year.
Since inception we have closed out the following positions:
2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007 DTLK +25% (2 weeks)
The model portfolio assumes $10,000 invested in each stock (unless we double-up--then it is $20,000), less $10 commission each way (TD Ameritrade rate).
For the 10 stocks that we have closed out in 2006 and 2007 the average gain was 35%. We are tired of watching our stocks go up--and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 6 positions in 2007 compared to 4 in all of 2006.
Earnings on BDR last week.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.44 to $13.84 last week.
Short Interest was 5.7 million at July 13th.
We got some huge volume last week, almost 2 million shares on 2 days and over 900,000 on Friday. May be some short covering going on that is driving the price and volume. Price got as high as $15.25, but got nailed on Friday.
We still think $18-$20 is in the cards for this year.
Guidance has not been updated yet for the TURBO Booster. If this market didn't stink so bad, helping to bail the shorts out, I think we would be North of $15 (and we were for a little while at least).
Now up 30% so far. HOLD.
QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, Valuation $11.27 (was $15.92, $13.69, $13.73 and $11.86)
Closed at $8.36, up $.49.
Our valuation has fallen from $15.92 to $11.27, but if they can hit their guidance for the year, the valuation would be approximately $14.60--75% above the current price. But since they seem to have trouble hitting their numbers--we will hold for now.
Earnings coming out Thursday, 8/23 after the close.
Up 21% so far. HOLD.
PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $21.16, down $1.75 last week.
Like we have said in the past--this is a very volatile stock.
Over the long haul (years) we like this stock, but right now the play is a sale of the company due to Third Points involvement.
Activist investment firm Third Point LLC, owns 11.2 million shares or 9.7% of the company and has more than $200 million invested. They continue to exert pressure on PDL to improve shareholder value.
If this reaches $30 in 2007, without a buy-out, we would sell.
Now up 10%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $5.10, down $.25 for the week.
DWCH is now trading at 55% of our valuation. We have been buying more in the $5 to $5.40 range.
Now up 59%. BUY.
Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $6.12 (was $6.65 before double up), Valuation $8.63 (Was $13.77)
PARL closed at $3.35, down $.03 last week. It actually fell to the mid-$2 range last week.
New management needs to get to work on this one fast.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 45%. HOLD.
Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, NEW Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.43 up $.01 for the week.
Earnings last week. Not great. Lost $822,000 after a $558,000 inventory reserve. Excluding the inventory charge, our valuation moved up to $4.31. Including the the charge, it fell slightly to $3.96. BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up.
Trading at 33% of our valuation.
Down 22%. HOLD
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.92 (was $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $12.06 down $.20 for the week.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 7%. BUY
Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Down $.54 to $9.35 last week.
Stephen Roseman has still been buying a bit of BDAY. Another 7,300 shares at prices from $9.01 to $10.00 in late July and early August. Now has 619,000 shares or 7.8% of the company.
With the insider buying in the last couple of months, we like this stock alot.
Up 6%. BUY on dips below $9.00
Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.98, Valuation $13.40
Up $.07 to $6.65 last week.
No news.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 4%. BUY
OB-abies (Bulletin Board Listed Stocks)
Nobody is liking our OB-abies lately (except maybe OPTIO). Just not their "time" yet. Patience.
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.78 (was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.66, up $.06 last week.
No news.
Now down 7%. BUY. Still a Huge valuation gap here.
Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.49 (was $.57, $.62, $.66 and before that $.79)
Closed at $.14, even last week.
No news.
Lion management has announced the formation of a "Strategic Review Committee" to explore the sale of the company or parts of the company. They said that they has received "preliminary" and "conditional" indications of interest from parties interested in acquiring "portions of the company". Hopefully something will happen here.
Down 39%. Hold.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.62, up $.08 last week.
Has cash of $.44 per share--27% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the "Strategic Alternatives" related to their Healthcare software division. In other words, a "for sale" sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this "division", so there is no way for us to determine what this could mean from a valuation standpoint.
Still hoping we will see north of $2.00 this year--but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare "division".
No news.
Up 30% so far. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $1.19,Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, down $.05 last week.
AVSO announced a restructuring last month that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting "significantly" better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 27% of our valuation.I bought some more on Friday at $.80. Just too CHEAP.
Now down 24%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.29 (Was $1.42, $1.28 $1.13, $1.05, $.82)
Ask price stayed the same last week at $.38. Closed at $.36.
This is still trading at only 29% of our latest valuation, but until the VOIP business stops losing money, we are not buyers--yet.
Up 41% based on the ASK price. HOLD.
posted by Cheap Stock Investor | 8:19 AM
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