12/8/2007 Update
Big week for the markets again last week. All the indices were up 1.5-1.9%. Our portfolio was down 1.3% after last weeks whopping 12.5% gain, This week OPTIO gave back last weeks gains and was down 22% and cost us 2% in our total portfolio--even though our valuation moved up significantly.
Last week we went 6 stocks up, 9 down and 1 even.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -1.3%,+27.9% and +47.6% respectively. Since inception we are now 19 stocks up and 13 down( 10 of which are down less than 10%).
The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from 1.6% (S+P 500) to 1.9% (DOW) last week. The Dow is up 9.3%, NASDAQ is up 12% and the S+P 500 is up 6.1% for the year.
We are now up about 3 times the DOW, 2.3 times the NASDAQ and about 4.6 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up about 5.9% and 6.6% 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 $.26 to $14.91.
No news and trading volume has dropped. Not worried here.
Now up 40%. 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 $7.03, up $.08.
DWCH closed up for the week but down big on Friday. Although technically DWCH hit $8 last week--it may have been for only 1 trade. So we are not counting this as a 1/2 sell as we recommended last week.
We still like this one.
DWCH is now trading at 68% of our valuation.
Now up 123%. 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 $4.53, up $.51.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
Now trading at 42% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 5%. BUY.
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 $11.44 down $.55.
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 5%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.35 to $8.52.
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.
Down 3%. 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 $.12 to $7.09.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 6%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.20 to $6.00.
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
Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.58 to $2.01.
SOLD at a 39% loss. Taking some tax losses.
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Up $1.28 to $7.58.
No news to explain the big rise, but we like it.
UP .4%. BUY
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
Down $.32 to $2.56.
No news.
Down .2%. HOLD
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Up $.49 to $18.20.
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 9%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.30 to $3.99.
There is value here.
No news.
Trading at only 42% of our valuation.
Down 7%. 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 $1.50, unchanged.
No news.
Now down 7%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, NEW Valuation $2.74 (was $2.34, $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.17, down $.33.
OPTIO announced earnings last week. Our valuation moved up 17% to $2.74.
Sales were $6.8 million down from $7.6 million last year, but up from the $6.6 million last quarter. Net loss was cut to only $160,000 or $.01 per share. Not a bad quarter in our opinion, but this has been a frustrating stock and some people are giving up (and taking tax losses).
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 over 5 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 this year--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 6%. 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 $.90, up $.03.
The CEO has bought 8,000 shares recently at $.85 to $.95. He is also giving an interview on the Wall Street Reporter on December 12th. Looks like maybe they are trying to get some attention to the under-valued stock they have.
AVSO is trading at 30% of our valuation.
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 9%. 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 up to $.36. Closed at $.30.
Earning out last month. Sales were $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.
Our valuation dropped a bit to $1.17, but, this is still trading at only 31% of our latest valuation.
Up 33% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.08 Valuation $2.08
Closed at $1.05, down $.03.
LTUS, filed an impressive investor presentation on Form 8K last week.
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.
Down 3%. BUY
Last week we went 6 stocks up, 9 down and 1 even.
For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -1.3%,+27.9% and +47.6% respectively. Since inception we are now 19 stocks up and 13 down( 10 of which are down less than 10%).
The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from 1.6% (S+P 500) to 1.9% (DOW) last week. The Dow is up 9.3%, NASDAQ is up 12% and the S+P 500 is up 6.1% for the year.
We are now up about 3 times the DOW, 2.3 times the NASDAQ and about 4.6 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up about 5.9% and 6.6% 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 $.26 to $14.91.
No news and trading volume has dropped. Not worried here.
Now up 40%. 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 $7.03, up $.08.
DWCH closed up for the week but down big on Friday. Although technically DWCH hit $8 last week--it may have been for only 1 trade. So we are not counting this as a 1/2 sell as we recommended last week.
We still like this one.
DWCH is now trading at 68% of our valuation.
Now up 123%. 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 $4.53, up $.51.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
Now trading at 42% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 5%. BUY.
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 $11.44 down $.55.
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 5%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.35 to $8.52.
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.
Down 3%. 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 $.12 to $7.09.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 6%. BUY
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.20 to $6.00.
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
Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.58 to $2.01.
SOLD at a 39% loss. Taking some tax losses.
Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Up $1.28 to $7.58.
No news to explain the big rise, but we like it.
UP .4%. BUY
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
Down $.32 to $2.56.
No news.
Down .2%. HOLD
PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Up $.49 to $18.20.
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 9%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.30 to $3.99.
There is value here.
No news.
Trading at only 42% of our valuation.
Down 7%. 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 $1.50, unchanged.
No news.
Now down 7%. BUY. Still a Huge valuation gap here.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, NEW Valuation $2.74 (was $2.34, $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.17, down $.33.
OPTIO announced earnings last week. Our valuation moved up 17% to $2.74.
Sales were $6.8 million down from $7.6 million last year, but up from the $6.6 million last quarter. Net loss was cut to only $160,000 or $.01 per share. Not a bad quarter in our opinion, but this has been a frustrating stock and some people are giving up (and taking tax losses).
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 over 5 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 this year--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 6%. 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 $.90, up $.03.
The CEO has bought 8,000 shares recently at $.85 to $.95. He is also giving an interview on the Wall Street Reporter on December 12th. Looks like maybe they are trying to get some attention to the under-valued stock they have.
AVSO is trading at 30% of our valuation.
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 9%. 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 up to $.36. Closed at $.30.
Earning out last month. Sales were $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.
Our valuation dropped a bit to $1.17, but, this is still trading at only 31% of our latest valuation.
Up 33% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.08 Valuation $2.08
Closed at $1.05, down $.03.
LTUS, filed an impressive investor presentation on Form 8K last week.
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.
Down 3%. BUY
posted by Cheap Stock Investor | 6:26 AM
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