Blonder Tongue Laboratories (AMEX–BDR)
Closing price March 2, 2007-$1.83
We had looked at BDR back in January and early February and tried to buy some back then. But then the stock took off and went as high as $2.60 before we could get any. With the market swoon, it has retraced all the way back to where it was. We have been buying last week at $1.90-$1.95, so the price now is even better! We recommend buying BDR now up to the $1.95 level, if necessary.
BDR is more a hardware company than the software companies we normally look at, but it has a number of things going on that caught our eye:
1) Announced a 100,000 share buy-back in early February.
2) Sold its cable TV subsidiary in December for $3.1 million, which will also save the company $525,000 a year on their P+L going forward.
3) Will have an $875,000 gain from the cable sale
4) Sold some patents in December for $2 million
5) In November 2006, they took advantage of a former Directors bad fortune and bought back 1.3 million shares at $.75 per share, when the Director could not meet his margin call.
These asset sales ought to allow them to pay off most of their debt (about $6 million at 9/30/2006).
In the September 30, 2006 quarter BDR did a bit under $10 million in sales and made $.02 per share (untaxed). So it appears they have turned the corner of profitability, have shorn up their balance sheet, reduced their shares outstanding and we have a potential double here over the next year.
BDR’s products address a growing market segment:
The Company designs, manufactures, and supplies a comprehensive line of equipment to deliver video (analog & digital), high speed data and voice services over integrated coaxial and fiber optic broadband networks today and over packet based, Internet protocol networks of the future.