Last week we went 4 up, 9 down and 1 even. Our biggest DOGS are: PARL, LINN.ob, BDR, AVSO.ob, ARIS.ob, ILOG and MEDW. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -5.9%,+17.9% and +36.1% respectively. Since inception we are now 17 stocks up and 7 down (1 of which is down less than 10%).
We were down 5.9% this past week and are now up 17.9% so far in 2007. The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from .6% (DOW) to 2.0% (NASDAQ) last week, and are all now up from 1.0% (S+P 500) to 5.8% (DOW) for the year.
We are now up more than triple the DOW and NASDAQ and 17 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up about 1% for the year.
Since inception we have closed out the following positions:
2006-ONXS +11% (Buyout offer)
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007 DTLK +25% (2 weeks)
The model portfolio assumes $10,000 invested in each stock (unless we double-up–then it is $20,000), less $10 commission each way (TD Ameritrade rate).
For the 10 stocks that we have closed out in 2006 and 2007 the average gain was 35%. We are tired of watching our stocks go up–and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 6 positions in 2007 compared to 4 in all of 2006.
Earnings on PDLI and DWCH last week.
Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.36 to $13.40 last week.
Up in a horrible week again!
Short Interest was 5.7 million at July 13th.
Got to be some short covering going on. It was nice to see SPNC trading ABOVE the ask price last week, instead of UNDER the bid price as it has been over the past few months.
Guidance has not been updated yet for the TURBO Booster. If this market didn’t stink so bad, helping to bail the shorts out, I think we would be North of $15.
SPNC presents at the Canaccord conference on August 7th, at 10AM, EST.
Now that they have something to talk about, SPNC is doing a pretty good job at getting the word out.
Now up 26% so far. HOLD.
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 $7.87, down $.12.
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 $14.60–86% above the current price. But since they seem to have trouble hitting their numbers–we will hold for now.
Earnings coming out Thursday, 8/23 after the close.
Up 14% so far. HOLD.
PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $22.91, down $.90 last week.
Earning last week. They were good, in our opinion, but got swept away by mortgage worries in the overall markets.
Revenues were up 32%, Royalty revenues were up 48%, cash position is good.
What’s not to like?
Over the long haul (years) we like this stock, but right now the play is a sale of the company due to Third Points involvement.
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.
If this reaches $30 in 2007, without a buy-out, we would sell.
Now up 19%. HOLD.
DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), NEW Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $5.35, down $.51 for the week.
As we posted earlier last week, DWCH earnings were good in our opinion and our valuation moved up slightly to $9.28. DWCH is now trading at 58% of our valuation. We have been buying more in the $5 to $5.40 range.
Now up 67%. BUY.
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 $3.38, down $.77 last week. Disgusting.
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 45%. HOLD.
Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.01 (was $5.12, $5.88).
Closed at $1.42 down $.09 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.
Earnings due out 8/9 before the market opens.
Trading at 35% of our valuation.
Down 22%. HOLD
ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.92 (was $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $12.26 up $.16 for the week.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
On Friday they announced they had a receivable from American Home Mortgage that was going to likely have to be written off. This will cost them $.03 a share. Probably take a hit next week, but this is immaterial to our valuation.
Down 5%. HOLD
Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Up $.90 to $9.89 last week
BDAY got up to $10.70 last week before getting whacked for $.54 on Friday.
Looks like some good buying interest in a bad-bad market week. Maybe something is up?
With the insider buying in the last couple of months, we like this stock alot.
Up 12%. HOLD
Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.98, Valuation $13.40
Down $.39 to $6.65 last week.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 5%. BUY
OB-abies (Bulletin Board Listed Stocks)
Nobody is liking our OB-abies lately (except maybe OPTIO). Just not their “time” yet. Patience.
ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.78 (was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.60, up $.10 last week.
ARI announced an expanded relationship with Kawasaki last week. At least this news helped keep it from going down with the rest of the market.
Now down 10%. BUY. Still a Huge valuation gap here.
Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.49 (was $.57, $.62, $.66 and before that $.79)
Closed at $.14, down $.03 last week.
Lion management has announced the formation of a “Strategic Review Committee” to explore the sale of the company or parts of the company. They said that they has received “preliminary” and “conditional” indications of interest from parties interested in acquiring “portions of the company”. Hopefully something will happen here.
Down 39%. Hold.
OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.54, down $.06 last week.
Got up to $1.75 before swooning with the rest of the stock market.
Has cash of $.44 per share–29% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the “Strategic Alternatives” related to their Healthcare software division. In other words, a “for sale” sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this “division”, so there is no way for us to determine what this could mean from a valuation standpoint.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare “division”.
Up 23% so far. HOLD.
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 $.95, down $.05 last week.
AVSO announced a restructuring 2 weeks ago that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting “significantly” better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 29% of our valuation. Just too CHEAP.
Now down 20%. BUY.
CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.29 (Was $1.42, $1.28 $1.13, $1.05, $.82)
Ask price stayed the same last week at $.38. Closed at $.38.
This is still trading at only 29% 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.