Datawatch

DWCH announced earning this morning. Looks like they may finally be turning things around. Sales of $5.776 million were up 22% from the prior year and earnings were positive. Albeit only $34,000 or $.01 per share after tax. Our new valuation is $8.32 per share, up from the $7.50 previously. Cautious buy on this one, assuming it does not break $3 today (we hope).

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Take-overs

Last week we went 5 up, 9 down and 1 even. DWCH is still our biggest dog followed by LINN.ob,PARL, MOBI, INFT, SPNC and ARIS.ob. For the week, 2007 year-to-date, and since we started this Blog in January 2006 our model portfolio is -1.2%,-2.4% and +12.8% respectively.

Since we started last year we have recommended 19 stocks. We have sold 4 for an average gain of 28% and are holding 15 remaining stocks, 8 of which are up and 7 down. Over the past year CCA Industries had a takeover offer that it is still mulling over (we sold for a 21% gain on this “take-under”) and INYX (IYXI.ob) is in the process of a management buy-out. With a lot of private equity funds loaded with cash (and borrowing capacity) and the pool of attractively priced stocks getting smaller we are expecting a few more of our stocks to get offers in 2007. We have been actively screening stocks to find new recommendation but are not finding any that are as attractively priced as the ones we have right now (we are always thinking about a few though). We have missed a few that we were watching (TBV-AMEX for one–up almost 100%), but we would rather miss a few than take on too much risk.

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). Down $.45 to $10.29 last week. Shorts continue to control the vertical on this stock. Prospects are really great for this company. No news. Now down 3% so far. BUY.

QADI-(Buy price $6.93, Valuation $13.69 (was $13.73 and $11.86). Closed at $8.10, down $.02. Trading at only 59% of valuation. Earnings due March 15th. No news. Has $1.03 in cash also. Up 17% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.93, down $.82. No news. This remains a very volatile stock. Now up 8%. HOLD.

MIVA-(Buy price $3.80, Valuation $7.52 (was $7.38 and $9.10)). MIVA closed at $4.17, up $.08. Now up 10%. HOLD.

DWCH-(Buy price $3.66, Valuation $7.50 (was $7.63, $9.31)). Closed at $2.67, up $.16 for the week, now down 27%. Earnings due on January 30th. HOLD.

INFT-(Buy price $4.11, Valuation $6.95 (was $6.86)). Up $.20 to $3.84. Still has $2.52 per share in cash. On January 22, 2007 Royce Associates filed a 13G with the SEC disclosing holding of 1,090,600 shares or 9.16%. This is up from 596,000 shares held as of their previous filing in May 2006. Loeb Partners filed a 13Da on January 12, 2007 disclosing holding of 533,157 shares (4.46%) down from previous holding of 671,597 shares (5.49%). The Loeb reports are a bit confusing because the current 13D indicates that they have been buying INFT, not selling. Anyway, the holding indicate that these value investors see upside here. Also, given the size of their holdings and the low average daily trading volume of the stock, they are expecting an event that will allow them to move this kind of volume at a profit–like a take-over. Price objective $5.50. Earnings due on January 31st. Now down 7%. BUY.

MOBI-(Buy price $6.68 (averaged down from $7.08), New Valuation $12.82, was $12.69). Down $.30 to $6.28. Earnings came out last week and our valuation went up a tad to $12.82. Sales and earnings were up slightly from last year and they gave no stellar guidance. So we are now trading below 50% of our valuation and cash is 42% of the market cap. Time to officially double up on this one. Down 11%. BUY.

RITT-(Buy price $1.00, Valuation $2.69). Closed down $.02 at $1.25 last week. Earnings report scheduled for February 1st. Up 25%. HOLD.

PARL-(Buy price $6.65, Valuation $13.77). PARL closed at $5.75, down $.12 last week. The action continues to heat up. Now Parlux management is suing Nusdorf and Quality King to stop their current move to oust the Board and management. We will vote with Nussdorf. There seems to be too many catalysts for this to stay down for long. Down 14%. This remains a BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.28, $5.21)). Closed at $2.02, up $.02 last week. News last week! Maybe these guys are starting to wake up and try to increase shareholder value. They announced an aquisition last week. From their press release: “OC-Net provides website development and hosting services to the Power Sports market, which includes motorcycles, All Terrain Vehicles (ATV’s), snowmobiles, and personal watercraft. OC-Net is profitable with approximately $1.3 million in annual revenues. Terms of the transaction were not disclosed”. This should add almost 10% to ARI’s annual sales. Not earth shattering, but a move in the right direction. This stock is still illiquid, so price moves are fairly meaningless at this point. Now down 2% 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 $.28, unchanged last week. Still trading at only 45% of our current valuation. Down 22%. HOLD until we get some revenue growth and stop losing money (same story as last quarter).

OPTO.ob-(Buy price $1.25, Valuation $2.89 (was $2.54 and 2.88)). Closed at $1.49, up $.02. Has $.44 in cash per share also. Share volume has remained healthy, at least by previous standards. Value Fund Advisors have apparently upped their stake in OPTIO to 2,918,026 this month from 2,510,559 previously, by buying a bunch of shares at $1.45-$1.46. Looks like their holdings are around 13% of the company now. Hopefully with this buying and the share buy-back plan, the selling overhang is being depleted. Maybe we will see north of $2.00 this year. 19% gain so far. HOLD.

AVSO.ob-(Buy price $1.19, Valuation $2.69 (was $3.36, $3.81)). Stock closed at $1.46, down $.04. Now up 23%. No significant news last week. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.13 (Was $1.05, $.82)). Ask price was down $.005 at $.295. Closed at $.30. Cash is (was) $.24 per share. Five weeks ago CTI announced the purchase of Ryder Systems LTD. an international provider of electronic and on-line billing solutions and developer of VoIP business applications. Four weeks ago they filed an 8-K, with details of the financing they got to fund the $11 million purchase–but still no details of what they bought. Now up 9% so far (based on ask price). HOLD until we see what we just bought.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed down $.18 at $2.28, up 17% to date. INYX issued an update on the buy-out last week. The most important statement was “the group now intends to present “an attractive cash buyout- offer” in February”. Hopefully it will be attractive by our standards and be at least $3 per share–so we can book at least a 50% gain on this one. Bank debt is now scheduled for repayment by March 31, 2007 and they have arranged financing for their latest acquisition. HOLD.

Parlux

Last week we went 7 up, 7 down and 1 even. DWCH is still our biggest dog followed by LINN.ob,PARL, INFT, MOBI and ARIS.ob. For the week, 2007 year-to-date, and since we started this Blog in January 2006 our model portfolio is -1.0%,-1.2% and +14.0% respectively.

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). Down $.57 to $10.74 last week. Shorts continue to control the vertical on this stock. Prospects are really great for this company. No news. Up a teeny 1% so far. BUY.

QADI-(Buy price $6.93, Valuation $13.69 (was $13.73 and $11.86). Closed at $8.12, up $.03. Trading at only 59% of valuation. Earnings due March 15th. No news. Has $1.03 in cash also. Up 17% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $21.75, up $.51. No news. Now up 13%. HOLD.

MIVA-(Buy price $3.80, Valuation $7.52 (was $7.38 and $9.10)). MIVA closed at $4.00, up $.08. Now UP 5%%. HOLD.

DWCH-(Buy price $3.66, Valuation $7.50 (was $7.63, $9.31)). Closed at $2.51, down $.18 for the week, now down 31%. Earnings due on January 30th. HOLD.

INFT-(Buy price $4.11, Valuation $6.95 (was $6.86)). Down $.12 to $3.64. Still has $2.52 per share in cash. Price objective $5.50. Earnings due on January 31st. Now down 11%. BUY.

MOBI-(Buy price $7.08, Valuation $12.69). Up $.04 to $6.58. No news. Earnings due on January 25th. Down 7%. BUY.

RITT-(Buy price $1.00, Valuation $2.69). Closed up $.02 at $1.27 last week. No news. Up 25%. HOLD.

PARL-(Buy price $6.65, Valuation $13.77). PARL closed at $5.87, down $.27 last week. The action is heating up. Letters and SEC filings are flying. Nussdorf’s move to oust current management and the Board is supposedly in the mail. We will vote with Nussdorf. There seems to be too many catalysts for this to stay down for long. Down 12%. This remains a BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.28, $5.21)). Closed at $2.00, unchanged last week. This stock is still illiquid, so price moves are fairly meaningless at this point. Now down 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 $.28, down $.02 last week. Still trading at only 45% of our current valuation. Down 22%. HOLD until we get some revenue growth and stop losing money (same story as last quarter).

OPTO.ob-(Buy price $1.25, Valuation $2.89 (was $2.54 and 2.88)). Closed at $1.47, up $.05. Has $.44 in cash per share also. Share volume continued high last week, so maybe the company is using their $2 million to start buying back some share. 18% gain so far. HOLD.

AVSO.ob-(Buy price $1.19, Valuation $2.69 (was $3.36, $3.81)). Stock closed at $1.50, down $.15. Now up 26%. No significant news last week. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.13 (Was $1.05, $.82)). Ask price stayed unchanged at $.30. Closed at $.30. Cash is (was) $.24 per share. Four weeks ago CTI announced the purchase of Ryder Systems LTD. an international provider of electronic and on-line billing solutions and developer of VoIP business applications. Three weeks ago they filed an 8-K, with details of the financing they got to fund the $11 million purchase–but still no details of what they bought. Now up 11% so far (based on ask price). HOLD until we see what we just bought.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed up $.14 at $2.42, up 27% to date. No news on the “take-over”, or the pay-off of their bank debt which was supposed to happen by the end of the year. HOLD.

MIVA

Last week we went 7 up, 7 down and 1 even last week. MIVA finally moved back into the winner column last week.DWCH is still our biggest dog followed by LINN.ob,INFT, PARL, MOBI and ARIS.ob. For the week, 2007 year-to-date, and since we started this Blog in January 2006 our model portfolio is +.4%,-.2% and +15.2% respectively.

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). Up $.06 to $11.31 last week. announced a facility expansion last week, there will be some short-term negative financial impact due to duplicate facilities, but it shows confidence in the future. Needham conference last week had no impact as the shorts nickeled the price down to the mid-$10 range last week before the price came back strong on Friday. Up 6% so far. HOLD.

QADI-(Buy price $6.93, Valuation $13.69 (was $13.73 and $11.86). Closed at $8.09, up $.05. Trading at only 59% of valuation. No news. Has $1.03 in cash also. Up 17% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $21.24, up $1.02. DNA announced earnings last week and helped push PDLI higher as their royalty drugs sold by DNA had solid performances as well as the January 11th JP Morgan conference they spoke at. Now up 10%. HOLD.

MIVA-(Buy price $3.80, Valuation $7.52 (was $7.38 and $9.10)). MIVA closed at $3.92, up $.27. THe move to Google seems to be driving the stock. Now UP 3%%. HOLD.

DWCH-(Buy price $3.66, NEW Valuation $7.50 (was $7.63, $9.31)). Closed at $2.69, up $.09 for the week, now down 27%. Earnings due on January 30th. HOLD.

INFT-(Buy price $4.11, Valuation $6.95 (was $6.86)). Down $.13 to $3.76. Still has $2.52 per share in cash. Price objective $5.50. Earnings due on January 31st. Now down 9%. BUY.

MOBI-(Buy price $7.08, Valuation $12.69). Down $.19 to $6.54. No news. Earnings due on January 25th. Down 8%. BUY.

RITT-(Buy price $1.00, Valuation $2.69). Closed down $.02 at $1.25 last week. No news. Up 25%. HOLD.

PARL-(Buy price $6.65, Valuation $13.77). PARL closed at $6.13, down $.19 last week. Parl is trying to flush Mr. Nussbdorf out. On Friday they filed a letter with the SEC where they ask him to stop screwing around and make an offer for the company. Nussdorf meanwhile continues to wage his proxy war to toss out current management. Let the fun begin.There seems to be too many catalysts for this to stay down for long. Down 8%. This remains a BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.28, $5.21)). Closed at $2.00, down $.05 last week. This stock is still illiquid, so price moves are fairly meaningless at this point. Now down 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 $.30, unchanged last week. Still trading at only 48% of our current valuation. Down 17%. HOLD until we get some revenue growth and stop losing money (same story as last quarter).

OPTO.ob-(Buy price $1.25, Valuation $2.89 (was $2.54 and 2.88)). Closed at $1.42, down $.03. Has $.44 in cash per share also. Share volme jumped last week, so maybe the company is using their $2 million to start buying back some share. Didn’t help the stock price. 14% gain so far. HOLD.

AVSO.ob-(Buy price $1.19, Valuation $2.69 (was $3.36, $3.81)). Stock closed at $1.65, up $.05. Now up 39%. No news last week. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.13 (Was $1.05, $.82)). Ask price stayed unchanged at $.30. Closed at $.30. Cash is (was) $.24 per share. Three weeks ago CTI announced the purchase of Ryder Systems LTD. an international provider of electronic and on-line billing solutions and developer of VoIP business applications. Two weeks they filed an 8-K, with details of the financing they got to fund the $11 million purchase–but still no details of what they bought. Now up 11% so far (based on ask price). HOLD until we see what we just bought.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed up $.02 at $2.28, up 19% to date. No news on the “take-over”, or the pay-off of their bank debt which was supposed to happen by the end of the year. HOLD.

2007

Last week we went 7 up, 6 down and 2 even last week. While it is easy to talk about our winners, we hate to lose money on any stock, so we tend to focus on our “Dogs” rather than our winners like RITT +27%, or AVSO.ob +35%. DWCH is still our biggest dog followed by LINN.ob,INFT, MOBI, PARL, MIVA and ARIS.ob. Of these, only the first 2 have losses of more than 5%. For the week and 2007, year-to-date, our model portfolio is down .4%.

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). Down $.04 to $11.25 last week. Some potential good news about a new product application and they are presenting at the Needham conference on January 9th. Maybe we will get some positive news and blow away the shorts that have been messing around with our investment. Up 6% so far. HOLD.

QADI-(Buy price $6.93, Valuation $13.69 (was $13.73 and $11.86). Closed at $8.04, down $.35. Trading at only 59% of valuation. No reason for the drop, other than maybe some people taking their capital gains in 2007. Has $1.03 in cash also. Up 16% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.22, up $.08. Now up 5%. BUY.

MIVA-(Buy price $3.80, Valuation $7.52 (was $7.38 and $9.10)). MIVA closed at $3.65, up $.27. Announced a new deal with Google that drove the price up to $4.67 at one point last week, but couldn’t stay near that level. Now down “only” 4%. HOLD.

DWCH-(Buy price $3.66, NEW Valuation $7.50 (was $7.63, $9.31)). Closed at $2.60, unchanged for the week, now down 29%. HOLD.

INFT-(Buy price $4.11, Valuation $6.95 (was $6.86)). Up $.13 to $3.89. Still has $2.52 per share in cash. Price objective $5.50. Now down 5%. BUY.

MOBI-(Buy price $7.08, Valuation $12.69). Up $.08 to $6.73. No news. Down 5%. BUY.

RITT-(Buy price $1.00, Valuation $2.69). Closed down $.15 at $1.27 last week. Looks like some profit taking (again, maybe people who held the stock to avoid taxes in 2006 waited to sell until this week). Up 27%. HOLD.

PARL-(Buy price $6.65, Valuation $13.77). PARL closed at $6.33, up $.76 last week. Got up to $6.75 last week. There seems to be too many catalysts for this to stay down for long. Down 5%. This remains a BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.28, $5.21)). Closed at $2.05, up $.05 last week. This stock is still illiquid, so price moves are fairly meaningless at this point. Now down .5% 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 $.30, down $.03 last week. Still trading at only 48% of our current valuation. Down 17%. HOLD until we get some revenue growth and stop losing money (same story as last quarter).

OPTO.ob-(Buy price $1.25, Valuation $2.89 (was $2.54 and 2.88)). Closed at $1.45, unchanged. Has $.44 in cash per share also. OPTIO announced a share buy-back plan last week of $2 million. We are generally not in favor of tech companies using cash to buy their shares, but at least it is not that much and will give some support to the stock price, hopefully. 16% gain so far. HOLD.

AVSO.ob-(Buy price $1.19, Valuation $2.69 (was $3.36, $3.81)). Stock closed at $1.60, up $.10. Now up 35%. Some product related news last week. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.13 (Was $1.05, $.82)). Ask price dropped $.02 to $.30. Closed at $.30. Cash is (was) $.24 per share. Two weeks ago CTI announced the purchase of Ryder Systems LTD. an international provider of electronic and on-line billing solutions and developer of VoIP business applications. Last week they filed an 8-K, with details of the financing they got to fund the $11 million purchase–but still no details of what they bought. Now up 11% so far (based on ask price). HOLD until we see what we just bought.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed down $.07 at $2.26, up 18% to date. No news on the “take-over”, or the pay-off of their bank debt which was supposed to happen by the end of the year. HOLD.