Cheap Stocks, 3/15/2008 Update
Well we got a big head fake last week as the markets soared on Tuesday, then gave it all back by the end of the week. NASDAQ is back to where it was in December 2005! Last week LTUS.ob dropped 19% for no apparent reason leaving us down 2.5% for the week.
We are adding another $10,000 to both PDLI and LTUS.ob this week.
All of the major averages have lost all their 2007 gains and then some from 12/31/2006. And we have too.
We were down 2.5% last week, bringing our YTD 2008 loss to 35.8%. NASDAQ was even last week, the DOW was up .5% and the S+P 500 was down .4%. There are lots of cheap stocks around now, but we keep coming back to the ones we already own as being the best values.
Last week we went 5 stocks up, 6 down and 3 even.
For last week, 2008 year-to-date, and since we started this Blog in January 2006, our model portfolio is -2.5%,-35.8 and -2.8% respectively. Since inception we are now 19 stocks up and 13 down.
So far in 2008 the DOW is down 9.9%, NASDAQ is down 16.6% and the S+P 500 is down 12.2%. The NASDAQ is now down a whopping 22.6% since October 31, 2007.
The Russell 3000 and the Wilshire 5000 are both down just about 12.3% this 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.
2008-ANGN +26%
2008-OPTO.ob +40% (Buy-out offer)
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 18 stocks that we closed out in 2006, 2007 and 2008 the average gain was 23%.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $9.40 (was $10.65 before double up), Valuation $20-$22
Down $.46 to $7.95.
SPNC continues to flounder. Insider buying perked it up a bit for a while.
Zack's put out a tepid report last week with a price target of $9.50--because SPNC missed their estimate by $.01. Lets see that's $300,000 miss. It is just too easy in this market to say things are bad. Zacks can't even get their numbers right. They ignore the $55 million in cash (22% of the market cap) that SPNC has and says that at 3.1 times 2008 sales it should trade at $9.50. They are idiots.
The company has $54.4 million in cash ($1.73 per share), and is trading at about 2 times 2008 revenues (net of cash). Stupid.
Now down 16%. BUY.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.03 (was $10.30, $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $3.57, up $.17. Zeff Capital Partners filed a 13G last week disclosing a 303,100 (5.1%) ownership position.
DWCH is now trading at 40% of our valuation.
No news.
Now up 13%. BUY
Parlux Fragrances (PARL-Recommended 11/30/2006)
New Buy price $4.14 (was $4.78 before $10,000 adder, $6.12 before another $10,000 added, $6.65 before double up), Valuation $11.24 (Was $10.80 $9.20, $8.63, $13.77)
PARL closed at $2.99, up $.12.
Latest earnings were very good. Stock is down. The market in general is anticipating that the bottom will fall out of everything.
Now trading at 27% 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 28%. 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 $24.67 (was $20.51, $23.22, $20.99, $20.52)
Closed at $10.38 down $.22.
Our valuation moved back up to over $24 per share.
For FY2008 (this year) they are STILL projecting another 20% increase in sales but revised their earnings projections down. They still have $3.39 a share in cash.
A buy-out is a decent possibility here.
Down 14%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
NEW Buy Price $6.15 (was $8.38 before $10,000 adder and $8.82 before double-up), Valuation $15.51 (Was $17.85 $18.18)
Up $.31 to $4.70.
There will be no more birthdays or halloween. BDAY is not burning it up, but this is stupid.
Trading at 30% of our valuation.
The "turnaround" is not yet done.
Down 24%. BUY.
Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.52, (was $6.67 ($10,000 added), $6.98 after double up) Valuation $10.28 (was $13.32, $12.89, $13.40)
Unchanged at $6.00.
Cannell Capital filed a 13D on February 19th, disclosing a 12.9% ownership stake. Most of this was purchased from Penninsula at $7.03 a share. Cannell is pushing MEDW management to sell the company. It seems the only was any stock can go up these days is on a buy-out.
Down 8%. HOLD
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $8.69 (was $11.51)
Down $.65 to $3.26
Funds selling (Third Point--who has been hammered lately--PDLI also)
No news.
Down 55%. HOLD
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.38 (Was $2.62 before another $10,000 and was $3.00 before double up), NEW Valuation $6.84 (was $7.58, $7.59)
Up $.01 to $1.81.
Earnings out last week. Not great--but there seems to be hope. Sales down %5 to $34.6 million, and they had an adjusted EBITDA loss of $2.9 million. For 2008 they are projecting revenue of $145-$150 million and EBITDA breakeven. But it sounds like this will not happen until the second half of 2008. If they can turn this around-a double or triple from here is possible.
Our valuation dropped to $6.84. If there can do what they say in 2008, a valuation of close to $8 is possible.
Trading at 26% of our new valuation
Down 25%. BUY
PDL Biopharma. (PDLI-Recommended 10/21/2007)
New Buy Price $14.15 (was $16.53 before $10,000 adder, and $20.04 before double-up), Valuation $18.00 to $20.00
Down $1.44 to $9.69.
PDLI announced that they had closed all their asset sales ($240 million, $200 million and $85 million) last week. Next should be a dividend of maybe $4 a share and then some deal involving their royalty income. As scary as this whole thing is--we still think that this current valuation is stupid. At $9.69, less a $4 dividend--this will be trading at around $5.69--or a $680 million market cap. Doing $150 million a year in royalties (and growing), a bunch of clinical developments, ongoing.
So we are adding ANOTHER $10,000 to this one. New avg. buy price will be-$12.69.
Down 32%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $10.66 (Was, $9.39)
Down $.02 to $4.02.
No news.
Trading at only 38% of our valuation.
Down 6%. BUY
OB-abies (Bulletin Board Listed Stocks)
Interestingly, our OB-abies have held up better than the "higher-quality" stocks so far this year. They are down about 5% on average, compared to almost 25% for the stocks above. At least so far.
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 $5.71 (was $5.49, $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.85, unchanged.
Earnings announced in January were great. Sales up 21% and they made money. This market just stinks for mini/micro caps, and ARI does little to get any investor attention. Wake up management--you have a great little company here worth 3X what it is selling for.
Earnings due out Monday, March 17th, before the open.
Now up 15%. BUY. Still a Huge valuation gap here.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.93 (Was $.99 and $1.19 before adding $10,000-twice), Valuation $3.41 (was $3.05, $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, up $.05.
Earnings out in early February. Sales up only 4%, but earnings up 69%!. EPS was $.04 compared to $.02 last year. Pre-tax earnings were up over 100%. Our valuation rose to $3.41. Stock goes down. Who can figure.
Hired a PR firm last week. Maybe they are ready to go prime time with the Street. Hope somebody is left out there to listen.
Now down 3%. 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 unchanged at $.29. Closed at $.24.
Maybe these guys will wake up and create some shareholder value in 2008.
This is still trading at only 25% of our latest valuation.
Up 7% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $.95 (Was $1.08 before double-up) Valuation $2.08
Closed at $.68, down $.16.
No apparent reason for the decline. More sellers than buyers.
LTUS announced a $5 million private placement of stock in late February. 5,547,000 shares and warrants to purchase another 2.9 million shares at $1.20. Also in the agreement, the current big holders have to put up a chunk of their personal stock in escrow, which will be released on hitting certain earnings target. The target for 2007 is $8.5 million. For the 9 months ended September 30, they made $6.1 million. So this should make $2.4 million Q4 earnings a slam dunk--$.05 per share. Target for 2008 is $13.8 million (about $.28 a share) and 2009--$17.5 million or about $.35 per share.
We bought more last week at $.72. Add another $10,000 here too. New avg. buy price will be $.84.
This is still a BUY.
Down 28%.
We are adding another $10,000 to both PDLI and LTUS.ob this week.
All of the major averages have lost all their 2007 gains and then some from 12/31/2006. And we have too.
We were down 2.5% last week, bringing our YTD 2008 loss to 35.8%. NASDAQ was even last week, the DOW was up .5% and the S+P 500 was down .4%. There are lots of cheap stocks around now, but we keep coming back to the ones we already own as being the best values.
Last week we went 5 stocks up, 6 down and 3 even.
For last week, 2008 year-to-date, and since we started this Blog in January 2006, our model portfolio is -2.5%,-35.8 and -2.8% respectively. Since inception we are now 19 stocks up and 13 down.
So far in 2008 the DOW is down 9.9%, NASDAQ is down 16.6% and the S+P 500 is down 12.2%. The NASDAQ is now down a whopping 22.6% since October 31, 2007.
The Russell 3000 and the Wilshire 5000 are both down just about 12.3% this 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.
2008-ANGN +26%
2008-OPTO.ob +40% (Buy-out offer)
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 18 stocks that we closed out in 2006, 2007 and 2008 the average gain was 23%.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $9.40 (was $10.65 before double up), Valuation $20-$22
Down $.46 to $7.95.
SPNC continues to flounder. Insider buying perked it up a bit for a while.
Zack's put out a tepid report last week with a price target of $9.50--because SPNC missed their estimate by $.01. Lets see that's $300,000 miss. It is just too easy in this market to say things are bad. Zacks can't even get their numbers right. They ignore the $55 million in cash (22% of the market cap) that SPNC has and says that at 3.1 times 2008 sales it should trade at $9.50. They are idiots.
The company has $54.4 million in cash ($1.73 per share), and is trading at about 2 times 2008 revenues (net of cash). Stupid.
Now down 16%. BUY.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.03 (was $10.30, $9.28, $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $3.57, up $.17. Zeff Capital Partners filed a 13G last week disclosing a 303,100 (5.1%) ownership position.
DWCH is now trading at 40% of our valuation.
No news.
Now up 13%. BUY
Parlux Fragrances (PARL-Recommended 11/30/2006)
New Buy price $4.14 (was $4.78 before $10,000 adder, $6.12 before another $10,000 added, $6.65 before double up), Valuation $11.24 (Was $10.80 $9.20, $8.63, $13.77)
PARL closed at $2.99, up $.12.
Latest earnings were very good. Stock is down. The market in general is anticipating that the bottom will fall out of everything.
Now trading at 27% 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 28%. 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 $24.67 (was $20.51, $23.22, $20.99, $20.52)
Closed at $10.38 down $.22.
Our valuation moved back up to over $24 per share.
For FY2008 (this year) they are STILL projecting another 20% increase in sales but revised their earnings projections down. They still have $3.39 a share in cash.
A buy-out is a decent possibility here.
Down 14%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007)
NEW Buy Price $6.15 (was $8.38 before $10,000 adder and $8.82 before double-up), Valuation $15.51 (Was $17.85 $18.18)
Up $.31 to $4.70.
There will be no more birthdays or halloween. BDAY is not burning it up, but this is stupid.
Trading at 30% of our valuation.
The "turnaround" is not yet done.
Down 24%. BUY.
Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.52, (was $6.67 ($10,000 added), $6.98 after double up) Valuation $10.28 (was $13.32, $12.89, $13.40)
Unchanged at $6.00.
Cannell Capital filed a 13D on February 19th, disclosing a 12.9% ownership stake. Most of this was purchased from Penninsula at $7.03 a share. Cannell is pushing MEDW management to sell the company. It seems the only was any stock can go up these days is on a buy-out.
Down 8%. HOLD
Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $8.69 (was $11.51)
Down $.65 to $3.26
Funds selling (Third Point--who has been hammered lately--PDLI also)
No news.
Down 55%. HOLD
MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.38 (Was $2.62 before another $10,000 and was $3.00 before double up), NEW Valuation $6.84 (was $7.58, $7.59)
Up $.01 to $1.81.
Earnings out last week. Not great--but there seems to be hope. Sales down %5 to $34.6 million, and they had an adjusted EBITDA loss of $2.9 million. For 2008 they are projecting revenue of $145-$150 million and EBITDA breakeven. But it sounds like this will not happen until the second half of 2008. If they can turn this around-a double or triple from here is possible.
Our valuation dropped to $6.84. If there can do what they say in 2008, a valuation of close to $8 is possible.
Trading at 26% of our new valuation
Down 25%. BUY
PDL Biopharma. (PDLI-Recommended 10/21/2007)
New Buy Price $14.15 (was $16.53 before $10,000 adder, and $20.04 before double-up), Valuation $18.00 to $20.00
Down $1.44 to $9.69.
PDLI announced that they had closed all their asset sales ($240 million, $200 million and $85 million) last week. Next should be a dividend of maybe $4 a share and then some deal involving their royalty income. As scary as this whole thing is--we still think that this current valuation is stupid. At $9.69, less a $4 dividend--this will be trading at around $5.69--or a $680 million market cap. Doing $150 million a year in royalties (and growing), a bunch of clinical developments, ongoing.
So we are adding ANOTHER $10,000 to this one. New avg. buy price will be-$12.69.
Down 32%. HOLD
Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $10.66 (Was, $9.39)
Down $.02 to $4.02.
No news.
Trading at only 38% of our valuation.
Down 6%. BUY
OB-abies (Bulletin Board Listed Stocks)
Interestingly, our OB-abies have held up better than the "higher-quality" stocks so far this year. They are down about 5% on average, compared to almost 25% for the stocks above. At least so far.
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 $5.71 (was $5.49, $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.85, unchanged.
Earnings announced in January were great. Sales up 21% and they made money. This market just stinks for mini/micro caps, and ARI does little to get any investor attention. Wake up management--you have a great little company here worth 3X what it is selling for.
Earnings due out Monday, March 17th, before the open.
Now up 15%. BUY. Still a Huge valuation gap here.
Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.93 (Was $.99 and $1.19 before adding $10,000-twice), Valuation $3.41 (was $3.05, $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, up $.05.
Earnings out in early February. Sales up only 4%, but earnings up 69%!. EPS was $.04 compared to $.02 last year. Pre-tax earnings were up over 100%. Our valuation rose to $3.41. Stock goes down. Who can figure.
Hired a PR firm last week. Maybe they are ready to go prime time with the Street. Hope somebody is left out there to listen.
Now down 3%. 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 unchanged at $.29. Closed at $.24.
Maybe these guys will wake up and create some shareholder value in 2008.
This is still trading at only 25% of our latest valuation.
Up 7% based on the ASK price. BUY
Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $.95 (Was $1.08 before double-up) Valuation $2.08
Closed at $.68, down $.16.
No apparent reason for the decline. More sellers than buyers.
LTUS announced a $5 million private placement of stock in late February. 5,547,000 shares and warrants to purchase another 2.9 million shares at $1.20. Also in the agreement, the current big holders have to put up a chunk of their personal stock in escrow, which will be released on hitting certain earnings target. The target for 2007 is $8.5 million. For the 9 months ended September 30, they made $6.1 million. So this should make $2.4 million Q4 earnings a slam dunk--$.05 per share. Target for 2008 is $13.8 million (about $.28 a share) and 2009--$17.5 million or about $.35 per share.
We bought more last week at $.72. Add another $10,000 here too. New avg. buy price will be $.84.
This is still a BUY.
Down 28%.
posted by Cheap Stock Investor | 6:37 AM
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