2006 is shaping up to be our worst year since 2002 when we were down 23%. We have averaged a 35% annual gain for 2003,2004,2005. But there is still over a month left in 2006 and we hope that the market will start paying attention to some off our “unloved”, but undervalued stocks before then.
We went 6 up, 7 down and 1 even last week. Our model portfolio year-to-date gain, dropped back 1.2% to 10.0%. DWCH continued as our biggest dog followed by, LINN.ob, MIVA, INFT and CTIG.ob. Since the start of the year we are 13 up and 5 down. Mini-caps continue to lag way behind the market.
Earnings on QADI 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). Dropped another $.29 to $10.95 last week. No news, just the shorts and market makers playing games with 100 share trades again. Up 3% so far. HOLD
QADI-(Buy price $6.93, Valuation $13.69 (was $13.73 and $11.86). Closed at $8.08, down $.12. Trading at only 59% of valuation. Has $1.03 in cash also. Up 17% so far. HOLD.
PDLI-(Buy price $19.31, Valuation > $30)–Closed at $23.23, up $.48. Apparently the “bad news” about the canceled Roche deal ended up being good news. Now up 20%. HOLD.
MIVA-(Buy price $3.80, Valuation $7.52 (was $7.38 and $9.10)). MIVA closed at $3.40, up $.01. No news. Down 11% so far. HOLD.
DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $1.95, unchanged, still a loser–now down a whopping 47%. HOLD to see how this quarter turns out on November 28. Valuation gap is still huge, but declining. VSNT, DTLK, NTCT did nothing for a long time–until they announced some good earnings and then all took off. Lets hope this is DWCH’s quarter and they do not crater the earnings.
INFT-(Buy price $4.11, Valuation $6.95 (was $6.86)). Up $.16 last week to $3.69. Still has $2.52 per share in cash. Price objective $5.50. Now down 10%. Frustrating stock. BUY.
MOBI-(Buy price $7.08, Valuation $12.69). Down $.03 last week to $7.17. No news. Still OK to BUY at this level.
RITT-(Buy price $1.00, Valuation $2.69). Closed up $.02 at $1.02 last week. No news. BUY.
ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.21)). Closed at $2.12, down $.03 last week. This stock is still pretty illiquid so price moves are fairly meaningless at this point. Now up 3% so far. BUY if you can find some shares. Huge valuation gap.
Linn.ob-(Buy price $.36, Valuation $.62 (was $.66 and before that-$.79)). Closed at $.26, down $.06 last week. Still trading at only 42% of our current valuation. Down 28% YTD. HOLD until we get some revenue growth and stop losing money (same story as last quarter).
OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.48, up $.07. Seems to be wanting to break out to the upside, but just can’t seem to hold that $1.50+ level. Maybe next week. So now we have a 18% gain. HOLD.
AVSO.ob-(Buy price $1.19, NEW Valuation $2.69 (was $3.36, $3.81)). Stock closed at $1.53, up $.06. If they do the $55-$60 million in revenue that they are projecting for current fiscal year (did $12 million in Q1)–this stock should double from here as our valuation will range from $3.71 to $4.03 (assuming margins remain in the 40-50% range. Now up 29%. HOLD.
CTIG.ob-(Buy price $.27 ask, NEW Valuation $1.13 (Was $1.05, $.82)). Ask price dropped $.02 to $.26. Closed at $.25. Cash is $.24 per share. Now down 4% so far (based on asked price). BUY if you can find some shares.
IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed down $.08 at $2.19, up 15% to date. This is still very risky, but could be a real barnburner is they do what they say they are going to do. HOLD.