MIVA–Sell at $5.90–55% Gain

Still short of our valuation–but we will take the 55% profit.

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5/26/2007 Update

Last week we went 10 up and 5 down and 1 even. LINN.ob holds first place on our “biggest dog” list (by far) followed by PARL, ARIS.ob, BDR, SPNC, ILOG and BDAY. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +1.4%,+19.3% and +37.6% respectively. Since inception we are now 16 stocks up and 7 down (3 of which are down less than 10%).

We were up 1.35% this past week (primarily driven by gains in RITT, MIVA and DTLK) and are now up 19.3% so far in 2007. The DOW, NASDAQ and the S+P 500 ranged from down .5% (S+P) to even (NASDAQ) last week, and are all now up from 5.9% (NASDAQ) to 8.4% (DOW) for the year. We are still are up more than double the averages in 2007 and triple NASDAQ.

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)

The model portfolio assumes $10,000 invested in each stock, less $10 commission each way (TD Ameritrade rate).

Really not much news last week other than a few product announcements.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.14 to $9.95 last week.
Short interest increased another 300,000 shares in May to 4.4 million shares, keeping the pressure on the any increase in share price. No signiciant news. We are just waiting for FDA approval. If the TURBO-Booster is approved (no reason to expect it will not be), this should be huge.
Now down 7% so far. BUY.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, Valuation $11.27 (was $15.92, $13.69, $13.73 and $11.86)
Closed at $8.02, down $.43.
The slide continues. We should have sold this at $10. Next time.
Our valuation has fallen from $15.92 to $11.27, but if they can hit their guidance for the year, the valuation would be approximately $14.60–72% above the current price. But since they seem to have trouble hitting their numbers–we will hold for now.
Up 16% so far. HOLD.

PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $27.46, up $1.10.
The letter war continues between Third Point and PDLI management and Board. Price continues to increase.
If this reaches $30, without a buy-out, we would sell.
Activist investment firm Third Point LLC, owns 11.2 million shares or 9.7% of the company and has more than $200 million invested. They continue to exert pressure on PDL to improve shareholder value. This however, remains a very volatile stock.
Now up 42%. HOLD.

MIVA Inc. (MIVA-Recommended 3/18/2006)
Buy price $3.80, Valuation $9.00 (was $7.37, $7.52, $7.38 and $9.10)
Closed at $5.17, up $.47 last week.
MIVA continued its move up in sympathy to Microsofts take-over of AQuantive at a huge premium. Hopefully they will get their numbers moving in the right direction in the next quarter or two and we will see MIVA’s stock move a lot closer to our valuation.
Now up 36%. HOLD.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.20 (was $8.32, $7.50, $7.63, $9.31)
Closed at $4.81, up $.05 for the week.
If this gets to $7 we would sell.
No news.
Now up 50%. HOLD.

RiT Technologies (RITT-Recommended 11/12/2006)
Buy price $1.00, Valuation $1.95 (Was $3.36, $2.69)
Closed up $.20 at $1.65 last week.
One good quarter should drive the valuation back over $3 and hopefully the price over $2.
Up 65%. HOLD.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $6.12 (was $6.65 before double up), Valuation $8.63 (Was $13.77)
PARL closed at $4.41, down $.37 last week.
The slide continues. We bought a little more on Friday–just to trade. New management needs to get to work on this one fast.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 28%. HOLD.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.01 (was $5.12, $5.88).
Closed at $1.63 up $.03 for the week.
Our valuation has dropped to $4.01. BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up.
Trading at 41% of our valuation.
Down 11%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $13.60, Valuation $20.99 (was $20.52)
Closed at $12.93 last week, up $.33.
No news.
Down 5%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $18.18
Up $.14 to $8.70 last week
With the insider buying in the last couple of months, we like this stock alot.
Down 1%. BUY

Datalink (DTLK-recommended 5/14/2007
Buy Price $5.20, Valuation $8.70
Up $.54 to $6.41 last week
DTLK continued to move up fast over the past 2 weeks
Trading at 74% of our valuation.
UP 23%. HOLD

OB-abies (Bulletin Board Listed Stocks)

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $2.06, Valuation $5.03 (was $5.28, $5.28, $5.21)
Closed at $1.80, up $.03 last week.
Q3 earnings out on June 7th, after the close.
This stock is still illiquid, so price moves are fairly meaningless at this point.
Now down 12%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.36, Valuation $.49 (was $.57, $.62, $.66 and before that-$.79)
Closed at $.15, down another $.02 last week.
Our valuation has dropped 14% to $.49.
This one has cost us 3% off our total 2007 performance so far.
Lion is a product line that needs to be sold to a bigger online player.
We will give LION another quarter to see if they can turn things around.
Down 58%. HOLD until we get some revenue growth and stop losing money (same story as last quarter(s)).

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.89 (was $2.89, $2.54 and 2.88)
Closed at $1.32, unchanged last week.
Has cash of $.47 per share–35% of the market cap.
Still hoping we will see north of $2.00 this year.
No news.
6% gain so far. BUY.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $1.19,Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $1.25, down $.15.
Trading at 38% of our valuation.
No news.
Now up 5%. HOLD.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, NEW Valuation $1.29 (Was $1.42, $1.28 $1.13, $1.05, $.82)
Ask price fell $.01 to $.38. Closed at $.39.
Volume was only 10,000 shares last week and that was me.
This is still trading at only 30% of our latest valuation, but until the VOIP business stops losing money, we are not buyers–yet/
Up 41% based on the ASK price. HOLD

5/19/2007 Update

Last week we went 8 up and 9 down. LINN.ob holds first place on our “biggest dog” list (by far) followed by PARL, ARIS.ob, BDR, SPNC, ILOG and BDAY. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +2.8%,+17.9% and +36.1% respectively. Since inception we are now 15 stocks up and 7 down (3 of which are down less than 10%).

We were up 2.8% this past week (driven by a 30% gain in INFT) and are now up 17.9% so far in 2007. The DOW, NASDAQ and the S+P 500 ranged from down .1% (NASDAQ) to up 1.7% (DOW) last week, and are all now up from 5.9% to 8.8% for the year. We are still are up more than double the averages in 2007 and triple NASDAQ.

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)

The model portfolio assumes $10,000 invested in each stock, less $10 commission each way (TD Ameritrade rate).

We sold INFT last week after their “take-under” offer for an 11% total gain and we added DTLK to our portfolio last week again.

QADI, CTIG.ob, AVSO.ob, LINN.ob and BDR all annouced earnings last week.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Down $.03 to $9.81 last week.
More manipulation last week as the price was driven down to $9, but rebounded on Friday to post a small loss for the week. No signiciant news. We are just waiting for FDA approval. If the TURBO-Booster is approved (no reason to expect it will not be), this should be huge.
SPNC is presenting at Citigroup Healthcare Conference on May 23rd.
Now down 8% so far. BUY.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, Valuation $11.27 (was $15.92, $13.69, $13.73 and $11.86)
Closed at $8.45, down $.92.
Earnings last week were not great, but not bad. Our valuation did plummet from $15.92 to $11.27, but if they can hit their guidance for the year, the valuation would be approximately $14.60–72% above the current price. But since they seem to have trouble hitting their numbers–we will hold for now.
Up 22% so far. HOLD.

PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $26.36, up $.33.
PDL’s Chairman wrote a wishy, washy letter to Third Point last week after a phone call with them. Third Points move now.
PDL will also be attending Citgroups Heathcare conference on May 23rd.
Activist investment firm Third Point LLC, owns 11.2 million shares or 9.7% of the company and has more than $200 million invested. They continue to exert pressure on PDL to improve shareholder value. This however, remains a very volatile stock.
Now up 37%. HOLD.

MIVA Inc. (MIVA-Recommended 3/18/2006)
Buy price $3.80, Valuation $9.00 (was $7.37, $7.52, $7.38 and $9.10)
Closed at $4.70, up $.48 last week.
MIVA moved up in sympathy to Microsofts take-over of AQuantive last week at a huge premium. Hopefully they will get their numbers moving in the right direction in the next quarter or two and we will see MIVA’s stock move a lot closer to our valuation.
Now up 22%. HOLD.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.20 (was $8.32, $7.50, $7.63, $9.31)
Closed at $4.76, down $.19 for the week.
If this gets to $7 we would sell.
No news.
Now up 48%. HOLD.

Inforte Corp. (INFT-Bought January 13, 2006)
Buy price $3.74 (averaged down from $4.11), Valuation $6.13 (was $6.95, $6.86)
Sold at $4.15 on their buyout last week for an 11% gain. As we said before–at least we didn’t lose money on this one.

RiT Technologies (RITT-Recommended 11/12/2006)
Buy price $1.00, Valuation $1.95 (Was $3.36, $2.69)
Closed up $.03 at $1.45 last week.
One good quarter should drive the valuation back over $3 and hopefully the price over $2.
Up 45%. HOLD.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $6.12 (was $6.65 before double up), Valuation $8.63 (Was $13.77)
PARL closed at $4.78, down $.07 last week.
Appointed new CEO and CFO last week. They need to get to work on this one fast.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 22%. HOLD.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, NEW Valuation $4.01 (was $5.12, $5.88).
Closed at $1.60 down $.10 for the week.
Earnings announced last week. Not that good. Our valuation plunged to $4.01. BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up.
Trading at 40% of our valuation.
Down 13%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $13.60, Valuation $20.99 (was $20.52)
Closed at $12.60 last week, down $.10.
No news. This one makes INFT and CTIG.ob look like high volume trading stocks.
Down 7%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $18.18
Down $.47 to $8.56 last week
Stephen Roseman bought more stock last week at $8.96. Thinking of buying more myself.
With the insider buying in the last couple of months, we like this stock alot.
Down 3%. BUY

Datalink (DTLK-recommended 5/14/2007
Buy Price $5.20, Valuation $8.70
Up $.67 to $5.87 last week
DTLK moved up fast last week after dropping briefly below $5.20 last Monday.
Trading at 67% of our valuation (compared to 60% last Monday).
UP 13%. HOLD

OB-abies (Bulletin Board Listed Stocks)

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $2.06, Valuation $5.03 (was $5.28, $5.28, $5.21)
Closed at $1.77, down $.13 last week.
No news.
This stock is still illiquid, so price moves are fairly meaningless at this point.
Now down 14%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.36, Valuation $.49 (was $.57, $.62, $.66 and before that-$.79)
Closed at $.17, up $.01 last week.
Another poor quarter announced last week, causing our valuation to drop 14% to $.49.
Sales fell another 10% and their losses increased to $665,000 for the quarter.
Now trading at 35% of our current valuation.
This one has cost us 3% off our total 2007 performance so far.
We will give LION another quarter to see if they can turn things around.
Down 53%. HOLD until we get some revenue growth and stop losing money (same story as last quarter(s)).

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.89 (was $2.89, $2.54 and 2.88)
Closed at $1.32, up $.05 last week.
After weeks of relentless share price drops, we finally had an up week-barely.
Has cash of $.47 per share–35% of the market cap.
Still hoping we will see north of $2.00 this year.
No news.
6% gain so far. BUY.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $1.19, NEW Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $1.40, up $.10.
AVSO got down to $1.11 last week, but rebounded.
AVSO had a decent quarter as sales rose 32%, but profit fell.
Still our valuation barely moved from $3.29 to $3.25.
Now up 18%. HOLD.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, NEW Valuation $1.29 (Was $1.42, $1.28 $1.13, $1.05, $.82)
Ask price fell $.03 to $.39. Closed at $.39.
Volume was only 1,000 shares last week.
This was the first quarter that included the Ryder acquisition results.
Sales were up 64%, but they lost money-$600,000 or $.02 per share. All of the loss came from their investment in VOIP (voice-over-internet-protocol), which did not generate any revenue for the quarter. They plan to start selling VOIP this year. If this is sucessful, losses should shrink and sales accelerate even more.
This is still trading at only 30% of our latest valuation, but until the VOIP business stops losing money, we are not buyers–yet/
Up 44% based on the ASK price. HOLD

Qad

QAD released “earnings” last night. Not that bad in our opinion. The stock has taken it on the chin since last Fridays “warning” and is down $.99 since last week at $8.38. We are still up 21%, but of course would have liked to sell it at $10.

Our new valuation based on the quarter is $11.27 down from $15.92. Most of the hit came from a $10 million sales decline from last quarter which looks like the stongest seasonal quarter of the year for QAD. Based on QAD’s lastest guidance, our valuation is $14.59, so if they perform as projected, there is still considerable upside here. But until they show it, this is a HOLD.

Just a note. Agile Software got a buy-out offer from Oracle last week. The offer was $8.10 a share and AGIL jumped about $1 or 15% on the offer. We have looked at AGIL before and did not think it was a compelling value, so we reran our valuation formula on their last quarterly results and came up with $7.47 a share. So prior to the offer AGIL was trading at 90% of our valuation–not enough to get us to buy.

5/16/2007-Update

Lots of action this week on the earnings front–CTIG.ob, LINN.ob, AVSO.ob and BDR.

CTIG.ob–New valuation-$1.29, down from $1.42, but based on real results not “pro-forma” estimates. This is still a BUY at the current $.39 ASK.

LINN.ob–New valuation-$.49, down from $.57. Still a HOLD and a prayer at $.16.

AVSO.ob–New valuation-$3.25, down from $3.29. A BUY at today’s price of $1.25.

BDR–New valuation-$4.01, down from $5.12. HOLD. Q1 is supposed to be a seasonally weak quarter, and at $1.55 it is not a sell.