12/15/2007 Update
Bad week for the markets again last week. All the indices were down 2.1-2.6%. Our portfolio was down a whopping 10.5% giving back just about all of our whopping 12.5% gain two weeks ago, This week MIVA, AVSO.ob, PARL and DWCH accounted for just about all of our losses.
We are adding to our positions in MIVA, AVSO.ob and BDAY this week.
Last week we went 5 stocks up, 11 down.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -10.5%,+17.4% and +35.5% respectively. Since inception we are now 20 stocks up and 12 down( 10 of which are down less than 10%).
The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from 2.1% (DOW) to 2.6% (NASDAQ) last week. The Dow is up 7.0%, NASDAQ is up 9.1% and the S+P 500 is up 3.5% for the year.
We are now up about 2.5 times the DOW, 1.9 times the NASDAQ and about 5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up 3.75% and 3.1% 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)
2007-PDLI + 3% (Waited too long to sell)
2007-QADI +25%
2007-CIMT +50%
2007-BDR +19%
2007-LINN.ob -57% (mortgage business bust didn't help here)
2007-TISA -39% (take some tax loss for 2007 due to disappointing results.
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 16 stocks that we have closed out in 2006 and 2007 the average gain was 22%. We have closed out 12 positions in 2007 compared to 4 in all of 2006.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Down $.49 to $14.42.
No news and trading volume has dropped. Not worried here. Looks like some hacker shorts may be back in playing too.
Now up 35%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $10.30 (was $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $6.20, down $.83.
DWCH closed down for the week and down big on Friday.
We still like this one and may buy some more next week at this level, if we can get it.
DWCH is now trading at 60% of our valuation.
Now up 97%. HOLD, it this hits $8.00 in 2007-SELL 1/2
Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.12, down $.41.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
But Glenn Nussdorf has been selling PARL shares! About 250,000 shares. Could be taking some tax losses, could be dealing with some margin debt issues, no one knows except for Glenn. Not a good sign with no explanation coming from the company, but this is still so cheap that we are staying with it for now.
Now trading at 38% of our valuation.
The new management has 2.0 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 14%. HOLD.
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $20.51 (was $23.22, $20.99, $20.52)
Closed at $10.96 down $.48.
Two Directors bought a total of 15,000 shares recently at about $11. This is very unusual.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
A buy-out is a decent possibility here.
Down 9%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.54 to $7.98.
The "turnaround" is not yet done.
Boring to watch this--but so was DWCH. We like the recent insider buying again and are content to wait for this one. Add another $10,000 here. New average BUY price will be $8.38.
Down 9%. BUY.
Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
down $.20 to $6.89.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 3%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Up $.04 to $6.04.
JP Morgan added 95,000 shares from 11/28-11/30, at $6.12 to $6.21. They now own 3,354,000 shares or about 10%.
They also filed an 8K in December. Seems they are sprucing up their senior officer change-of-control agreeemtnts. Wonder why?
Down 17%. HOLD
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Up $.40 to $7.98.
No news to explain the big rise over the past 2 weeks, but we like it.
UP 6%. HOLD
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
Down $.47 to $2.09.
W. Blair disclosed a 10% stake in Miva in a 13G filing. We think this is overblown on the downside and are going to add another $10,000 here. New average BUY Price will be $2.38 per share.
No news.
Down 18%. BUY
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.37 to $17.93.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.1 billion. Their pipeline, and know-how has to be worth something.
No matter, they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 11%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.17 to $3.82.
There is value here.
No news.
Trading at only 41% of our valuation.
Down 11%. BUY
OB-abies (Bulletin Board Listed Stocks)
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.55, up $.05.
Earnings out on Monday morning. Trading volume has picked up to about 85,000 shares last week. Hopefully some good news next week. This has been very boring.
Now down 4%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.74 (was $2.34, $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.20, up $.03.
OPTIO has cash of $.41 per share--35% 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.
It has been 6 months now since their announcement--We would expect to hear an update SOON. They said in their latest earnings release that their healthcare business exceeded their goals. They better get a good price for this.
Still hoping we will see north of $2.00--but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare "division".
DOWN 4%. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.83, down $.07.
Nice presentation filed in their 8K last week. Couple of nice mentions--including in Smart Money of the CEO interview with the Wall Street Reporter. Sigma Opportunity Fund has been buying more shares. I think it is time to add more here.
Add another $10,000 here. We bought a couple thousand more shares last week too. New average Buy Price will be $.93 per share.
We are guessing $55 million of revenue this year and being profitable--which should yield a valuation of over $3.50 a share, and hopefully a share price of at least $2.00--up 100% from here.
Now down 16%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.17 (Was $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price moved down to $.35. Closed at $.30.
Latest quarterly results were: Sales of $5.35 million, up 68% from $3.2 million last year. Without about $800,000 of patent enforcement costs, they would have broken even for the quarter, but this all dropped to the bottom line for a $808,000 loss---$.03 per share. One of these days CTIG is going to hit on all cylinders and get to $1.00.
Our valuation dropped a bit to $1.17, but, this is still trading at only 30% of our latest valuation.
Up 30% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.08 Valuation $2.08
Closed at $1.10, up $.05.
LTUS, filed an impressive investor presentation on Form 8K in early December.
As noted, China stocks are risky, but based on their published information we just cannot figure out why this stock is trading so low.
LTUS is on track to make $.18 a share this year. Even if these earnings were taxed at U.S. tax rates, that would be about $.12 a share. That is a PE of less than 10, for a company growing revenues at 50% year-over-year. We bought more last week at $1.07 to $1.12. May buy more if the price stays in this range.
Up 2%. BUY
We are adding to our positions in MIVA, AVSO.ob and BDAY this week.
Last week we went 5 stocks up, 11 down.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -10.5%,+17.4% and +35.5% respectively. Since inception we are now 20 stocks up and 12 down( 10 of which are down less than 10%).
The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from 2.1% (DOW) to 2.6% (NASDAQ) last week. The Dow is up 7.0%, NASDAQ is up 9.1% and the S+P 500 is up 3.5% for the year.
We are now up about 2.5 times the DOW, 1.9 times the NASDAQ and about 5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up 3.75% and 3.1% 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)
2007-PDLI + 3% (Waited too long to sell)
2007-QADI +25%
2007-CIMT +50%
2007-BDR +19%
2007-LINN.ob -57% (mortgage business bust didn't help here)
2007-TISA -39% (take some tax loss for 2007 due to disappointing results.
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 16 stocks that we have closed out in 2006 and 2007 the average gain was 22%. We have closed out 12 positions in 2007 compared to 4 in all of 2006.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Down $.49 to $14.42.
No news and trading volume has dropped. Not worried here. Looks like some hacker shorts may be back in playing too.
Now up 35%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $10.30 (was $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $6.20, down $.83.
DWCH closed down for the week and down big on Friday.
We still like this one and may buy some more next week at this level, if we can get it.
DWCH is now trading at 60% of our valuation.
Now up 97%. HOLD, it this hits $8.00 in 2007-SELL 1/2
Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.12, down $.41.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
But Glenn Nussdorf has been selling PARL shares! About 250,000 shares. Could be taking some tax losses, could be dealing with some margin debt issues, no one knows except for Glenn. Not a good sign with no explanation coming from the company, but this is still so cheap that we are staying with it for now.
Now trading at 38% of our valuation.
The new management has 2.0 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 14%. HOLD.
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $20.51 (was $23.22, $20.99, $20.52)
Closed at $10.96 down $.48.
Two Directors bought a total of 15,000 shares recently at about $11. This is very unusual.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
A buy-out is a decent possibility here.
Down 9%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.54 to $7.98.
The "turnaround" is not yet done.
Boring to watch this--but so was DWCH. We like the recent insider buying again and are content to wait for this one. Add another $10,000 here. New average BUY price will be $8.38.
Down 9%. BUY.
Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
down $.20 to $6.89.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 3%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Up $.04 to $6.04.
JP Morgan added 95,000 shares from 11/28-11/30, at $6.12 to $6.21. They now own 3,354,000 shares or about 10%.
They also filed an 8K in December. Seems they are sprucing up their senior officer change-of-control agreeemtnts. Wonder why?
Down 17%. HOLD
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Up $.40 to $7.98.
No news to explain the big rise over the past 2 weeks, but we like it.
UP 6%. HOLD
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
Down $.47 to $2.09.
W. Blair disclosed a 10% stake in Miva in a 13G filing. We think this is overblown on the downside and are going to add another $10,000 here. New average BUY Price will be $2.38 per share.
No news.
Down 18%. BUY
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.37 to $17.93.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.1 billion. Their pipeline, and know-how has to be worth something.
No matter, they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 11%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.17 to $3.82.
There is value here.
No news.
Trading at only 41% of our valuation.
Down 11%. BUY
OB-abies (Bulletin Board Listed Stocks)
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.55, up $.05.
Earnings out on Monday morning. Trading volume has picked up to about 85,000 shares last week. Hopefully some good news next week. This has been very boring.
Now down 4%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.74 (was $2.34, $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.20, up $.03.
OPTIO has cash of $.41 per share--35% 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.
It has been 6 months now since their announcement--We would expect to hear an update SOON. They said in their latest earnings release that their healthcare business exceeded their goals. They better get a good price for this.
Still hoping we will see north of $2.00--but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare "division".
DOWN 4%. HOLD.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.83, down $.07.
Nice presentation filed in their 8K last week. Couple of nice mentions--including in Smart Money of the CEO interview with the Wall Street Reporter. Sigma Opportunity Fund has been buying more shares. I think it is time to add more here.
Add another $10,000 here. We bought a couple thousand more shares last week too. New average Buy Price will be $.93 per share.
We are guessing $55 million of revenue this year and being profitable--which should yield a valuation of over $3.50 a share, and hopefully a share price of at least $2.00--up 100% from here.
Now down 16%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.17 (Was $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price moved down to $.35. Closed at $.30.
Latest quarterly results were: Sales of $5.35 million, up 68% from $3.2 million last year. Without about $800,000 of patent enforcement costs, they would have broken even for the quarter, but this all dropped to the bottom line for a $808,000 loss---$.03 per share. One of these days CTIG is going to hit on all cylinders and get to $1.00.
Our valuation dropped a bit to $1.17, but, this is still trading at only 30% of our latest valuation.
Up 30% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.08 Valuation $2.08
Closed at $1.10, up $.05.
LTUS, filed an impressive investor presentation on Form 8K in early December.
As noted, China stocks are risky, but based on their published information we just cannot figure out why this stock is trading so low.
LTUS is on track to make $.18 a share this year. Even if these earnings were taxed at U.S. tax rates, that would be about $.12 a share. That is a PE of less than 10, for a company growing revenues at 50% year-over-year. We bought more last week at $1.07 to $1.12. May buy more if the price stays in this range.
Up 2%. BUY
posted by Cheap Stock Investor | 4:22 PM
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