Maybe the small caps and micro caps are starting to move? Last week was encouraging at least.
We went 9 up, 3 down and 1 even last week. Our model portfolio year-to-date gain, moved up 2.7% to 14.5%. DWCH continued as our biggest dog followed by, MIVA, LINN.ob and PDLI. Since the start of the year we are 11 up, 4 down and 1 even. News on AVSO.ob and IYXI.ob last week.
The model portfolio assumes $10,000 invested in each stock, less $10 commission each way (TD Ameritrade rate).
SPNC-(Buy price $10.65, Valuation $18-$20). Price continued up to $11.70, up $.03 last week. Now up 10%. Short interest dropped a bit last month, but not by much. HOLD
CAW-(Buy price $9.45, Valuation $18.40). Closed down $.18 at $9.65. Yield about 3%. A group called Costa Brava Partnership offerred to buy the Class A stock at a “substantial premium”. The company has rejected this offer. CB owns 7.9% of the stock. I expect earnings this quarter to look very good compared to last year. Up 2% so far. BUY.
QADI-(Buy price $6.93, Valuation $13.73 (was $11.86). Closed at $8.08, up $.08. Yield about 1.2%. Trading at only 59% of valuation. Has $1.30 in cash also. Up 17% so far. HOLD.
PDLI-(Buy price $19.31, Valuation > $30)–Closed at $19.20, up $.44. Annoying action in this stock. Up, down, up, down. Now down 1%. HOLD.
MIVA-(Buy price $3.80, Valuation $7.38 (was $9.10)). MIVA closed at $3.30, up $.15. Now down 13% to date. HOLD until we see their full earnings results for the quarter and update our valuation.
DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $2.56, down $.12, still a loser–down 30%. HOLD.
INFT-(Buy price $4.11, Valuation $6.86 (was $7.32)). Down $.06 last week to $4.13. Still has $2.52 per share in cash. Price objective $5.50. Now up about 1%. BUY.
ARIS.ob-(Buy price $2.06, Valuation $5.21). Closed at $2.10, up $.10 last week. Up 2% so far. BUY if you can find some shares. Huge valuation gap. More good customer news last week.
Linn.ob-(Buy price $.36, Valuation $.66 (was $.79)). Closed at $.35, up $.04 last week. Still trading at only 53% of our current valuation. Down 3% YTD. HOLD until we get some revenue growth and stop losing money.
OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.25, up $.04. Now back to even. BUY.
AVSO.ob-(Buy price $1.19, NEW Valuation $3.36 (was $3.81)). Stock closed at $1.80, up $.11. Now up 51%. Earnigns were a mixed bag last week. Lost $84,000 on $9.9 million in sales. They closed their acquistion in May and only had 1 month contribution from it. Pro-forma sales including the acquisition were $49 million (actual year sales were $40 million) with $3.6 million of net income. They are projecting $55-$60 million in sales next year. Our new valuation is based on their pro-forma results for the year. Their shares outstanding are tough to figure out from their 10K. I have never seen a relatively simple capital structure so poorly explained. I think that they will have about 23 million fully-diluted shares outstanding next yeat, but this may be high by a couple of million. If they hit their $60 million in sales number next year the valuation should move to over $4 a share. Still only trading at only 54% of our new valuation. BUY.
CTIG.ob-(Buy price $.27 ask, Valuation $1.05 (Was $.82)). Ask price stayed at $.32. Closed at $.315. Cash is $.28 per share. Up 19% so far (based on asked price). If you own this HOLD. If you don’t-BUY.
IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed up $.02 at $2.52, up 32% They announced ANOTHER acquisition last week. This one is a U.K. pharmaceutical services provider with expected 2006 sales of about $13 million and $2.7 million of EBITDA. They paid about $17 million for it. They expect it to do $18 million in sales in 2007 and about $4 million of EBITDA. The most encouraging thing to me about this announcement is that some bank is still willing to lend them money for acquisitions. This is still very risky, but could be a real barnburner is they do what they say they are going to do. HOLD.