9/29/2007 Update

Finally a bit of a rebound for us last week.

Last week we went 12 up, 2 down and 1 even. Our biggest DOGS are: LINN.ob, BDR and PARL, all down 10% or more. For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +5.5%,+16.5% and +34.4% respectively. Since inception we are now 21 stocks up and 6 down(3 of which are down less than 10%).

We were up 5.5% this past week and are now up 16.5% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from .1% (S+P 500) to 1.1% (NASDAQ) last week. The Dow is up 11.5%, NASDAQ is up 11.8 and the S+P 500 is up 7.6% for the year.

Our OB-abies sparked up a bit last week with AVSO.ob up 27%, OPTO.ob up 6% and CTIG.ob up 9%. BDR and LINN.ob are the weakest companies fundamentally and we are looking for an economic exit on these two. We may be in luck with LINN.ob with their announcement on Friday. The rest of our stocks are looking good, in our opinion.

We are now up about 1.40 times the DOW and NASDAQ and about 2 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up between 7.4% and 7.8% for the year.

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)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)
2007-QADI +25%

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 12 stocks that we have closed out in 2006 and 2007 the average gain was 32%. 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 8 positions in 2007 compared to 4 in all of 2006.

BDAY and AVSO.ob earnings out last week ans LINN.ob had some good news on Friday.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Down $.62 to $13.48.
Guidance has not been updated yet for the TURBO Booster.
Short interest fell to 3.586 million shares from 4.502 million shares. But from the stock action, we believe there is still a lot of manipulation going on. Also think we saw some end of quarter profit taking, that weakened the stock. Nothing has fundamentally changed here for it to go down.
Now up 27% so far. HOLD.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93,Valuation $12.84 (was $11.27, $15.92, $13.69, $13.73 and $11.86)
SOLD at $8.66 for a 25% gain.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $4.45, down $.15.
Not much action here lately. Hopefully this quarter results will build on the last one and DWCH will get noticed again.
DWCH is now trading at 48% of our valuation.
Now up 41%. BUY.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $9.20 (Was $8.63, $13.77)
PARL closed at $3.89, up $.03.
Another decent quarter and we should be back in the black on this one.
New management needs to keep moving this company is the right direction.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 19%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.26 up $.04.
BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up. As we mentioned above, we are looking to get back to even on this one and get out, even though the valuation is compelling.
Trading at 29% of our valuation.
No news.
Down 31%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.70 up $.05.
No news.
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.
Down 3%. HOLD

Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Up $.11 to $9.45.
The “turnaround” is not yet done.
Earning last week were so-so. Sales fell 12% to $17.6 million and their operating loss increased to $739,000 (excluding stock compensation). Gross margin % improved a bit over the prior year. Cash fell to $15.1 million as they built inventory for their big selling quarter coming up. Still has $1.90 in cash and while our valuation fell to $15.51 based on this weak seasonal quarter of the year, we still think this is a good bet.
The insider buying seems to have stopped for a while.
With the insider buying and discount to our valuation, we like this stock alot.
Up 7%. HOLD.

Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) Valuation $12.89 (was $13.40)
Up $.17 to $6.56.
Has cash of $2.70 a share (37% of its market cap.) and is trading at 51% of our valuation. We still like this one.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 2%. BUY

Cimatron (CIMT-Recommended 8/12/2007)
Buy Price $2.12, Valuation $7.53
Up $.04 to $2.19.
No news.
Up 3%. BUY

Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Up $.42 to $8.49.
No news.
Up 17%. HOLD

Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Up $.14 to $3.42.
No news.
Up 4%. BUY

OB-abies (Bulletin Board Listed Stocks)

There is some life here!

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.50, unchanged.
No news
Now down 7%. 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 $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.10, unchanged.
Late Friday Lion announced the sale of their “Mortgage 101” website for $5 million or about $.12 per share in value. Based on their reported numbers, this is a better than 3 times multiple of revenue. Very nice. If they could get this multiple on the whole business, this thing could be worth our original valuation. Not likely though with the mortgage and housing markets in a tailspin.
In the press release they state that they “continue to review strategic alternatives”, so hopefully there will be more value realized here. Maybe we can actually see a gain here!
Down 57%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.34 (was $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.49, up $.09.
Has cash of $.38 per share–26% 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.
It has been over 2 months now since their announcement–We would expect to hear an update soon. They said in their latest earnings release that their healthcare business exceeded their goals. They better get a good price for this.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare “division”.
Up 19% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), NEW Valuation $3.23 (was $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $1.08, up $.23.
Earning for the quarter and year announced last week. Sales up 16% for the quarter and 27% for the year. But, they lost a bit of money in Q4 as expected.
For FY 2008 they said on the conference call that they expect Q1 to be profitable, modest sales growth for the year and a focus on profitability.
We are guessing $55 million of revenue next year and being profitable–which should yield a valuation of over $3.50 a share, and hopefully a share price of at least $2.00–up 85% from here.
Our current valuation is based on the full year FY2007 results and dropped only $.02 from our last valuation.
Trading at 33% of our valuation.
Now up 9%. HOLD.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.38 (Was $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price rose $.03 to $.35. Closed at $.30.
Little interest in this stock. Management needs to get some going.
Nice little partnership press release last week. Hopefully is will generate some revenue!
This is still trading at only 25% of our latest valuation.
Up 30% based on the ASK price. BUY

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Top Image Systems, LTD, (NASDAQ–TISA)-BUY

TISA
Valuation-$5.46
Price September 27, 2007-$3.28

We are recommending TISA for purchase. TISA is trading at 60% of our valuation, which is a bit higher than we like but, if they do what they say they are going to do, our valuation should go higher soon.

After a very weak first quarter, Q2 results (6/30/2007) showed sales up 24% to $6.1 million, gross margin was 62%, and the company made $109,000 or $.01 per share on a “Non-GAAP” basis (un-taxed). The stock has traded as high as $4.44 and as low as $2.91 over the last year.

We think our valuation (and the stock price) will go higher due to:

1) Recent acquisitions that made the CEO claim in their Q2 press release that “Q3 revenue run-rate will be over $7.5 million”

2) A recent partnership with J&B Software that has resulted in 3 new deals worth over $300,000 each (announced 9/24)

3) Purchased a 51% interest in “AsiaSoft” to get into the fast growing China and Asian markets.

With $.78 a share in “net” cash (24% of the market cap), and 60% margins, making money and several publicly announced catalysts that we believe not been reflected in the stock price, we think this is a good bet.

The daily trading volume is only 16,000 shares, but this stock can be accumulated.

We think anything under $3.35 is a good price.

About Top Image Systems
Top Image Systems is a leading innovator of enterprise solutions for managing and validating content entering organizations from various sources. Whether originating from mobile, electronic, paper or other sources, TIS solutions deliver the content to applications that drive the organization. TIS’s eFLOW Unified Content Platform is a common platform for the company’s solutions. TIS markets its platform in more than 30 countries through a multi-tier network of distributors, system integrators, value added resellers as well as strategic partners. Visit the company’s website http://www.topimagesystems.com for more information.

9/22/2007 Update

We were off last week. So all the data is for the past 2 weeks.

Last 2 weeks we went 8 up, 6 down and 1 even. Our biggest DOGS are: LINN.ob, BDR, PARL, and AVSO.ob, all down 10% or more. For the 2 weeks, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -1.7%,+11% and +28.0% respectively. Since inception we are now 19 stocks up and 7 down(3 of which are down less than 10%).

We were down 1.7% this past 2 weeks and are now up 11.0% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from 4.1% (NASDAQ) to 5.4% (DOW) last week. The Dow is up 10.9%, NASDAQ is up 10.6 and the S+P 500 is up 7.5% for the year.

Our OB-abies contine to lag, and LINN.ob is killing us. BDR and LINN.ob are the weakest companies fundamentally and we are looking for an economic exit on these two. The rest of our stocks are looking good, in our opinion.

We are now up about the same as the DOW and NASDAQ and about 1.5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up between 7.3% and 7.6% for the year.

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)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)

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 11 stocks that we have closed out in 2006 and 2007 the average gain was 33%. 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 7 positions in 2007 compared to 4 in all of 2006.

OPTIO earnings. Not much other news to spreak of.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Down $.43 to $14.10.
Guidance has not been updated yet for the TURBO Booster.
Looks like the shorts are still insisting on playing with this.
Now up 32% so far. HOLD.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93,Valuation $12.84 (was $11.27, $15.92, $13.69, $13.73 and $11.86)
Closed at $8.40, up $.77.
No news.
Up 21% so far. HOLD.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $4.60, up $.02.
Not much action here lately. Hopefully this quarter results will build on the last one and DWCH will get noticed again.
DWCH is now trading at 49% of our valuation.
Now up 46%. BUY.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $9.20 (Was $8.63, $13.77)
PARL closed at $3.86, up $.11.
Another decent quarter and we should be back in the black on this one.
New management needs to keep moving this company is the right direction.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 19%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.22 down $.04.
BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up. As we mentioned above, we are looking to get back to even on this one and get out, even though the valuation is compelling.
Trading at 28% of our valuation.
No news.
Down 33%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.65 up $.31.
No news.
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.
Down 4%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Up $.15 to $9.34.
The insider buying seems to have stopped for a while.
With the insider buying and discount to our valuation, we like this stock alot.
Earnings out 9/28 before the market opens.
Up 6%. BUY on dips below $9.00.

Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $12.89 (was $13.40)
Down $.94 to $6.39.
Has cash of $2.70 a share (37% of its market cap.) and is trading at 57% of our valuation. We still like this one.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 4%. BUY

Cimatron (CIMT-Recommended 8/12/2007
Buy Price $2.12, Valuation $7.53
Up $.03 to $2.15.
No news.
Up 1%. BUY

Candela Corp. (CLZR-Recommended 8/30/2007
Buy Price $7.26, Valuation $11.51
Up $.86 to $8.07.
Presenting at the UBS conference on 9/27, but no other significant news.
Up 11%. HOLD

OB-abies (Bulletin Board Listed Stocks)

LINN.ob has chopped our 2007 gains by 14% all by itself.

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.50, up $.05.
No news
Now down 7%. 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 $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.10, up $.02.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
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 57%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, NEW Valuation $2.34 (was $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.40, down $.12.
Announced earnings 2 weeks ago. Not great, but our valuation moved up to $2.34. They are still losing money, and cash is declining.
Has cash of $.38 per share–27% 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.
It has been over 2 months now since their announcement–We would expect to hear an update soon. They said in their latest earnings release that their healthcare business exceeded their goals. They better gat a good price for this.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare “division”.
Up 12% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.85, down $.05.
Earnings on 9/28 before the market opens.
AVSO announced a restructuring in late July 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 26% of our valuation. Just too CHEAP.
Now down 14%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.38 (Was $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price fell $.07 to $.32. Closed at $.32.
Little interest in this stock. Management needs to get some going.
This is still trading at only 25% of our latest valuation.
Up 19% based on the ASK price. BUY

9/8/07 Update

What a lousy week in the market.

Last week we went 4 up, 10 down and 2 even. Our biggest DOGS are: LINN.ob, BDR, PARL, and ARIS,ob, all down 10% or more. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -2.6%,+11.4% and +28.5% respectively. Since inception we are now 18 stocks up, 7 down and 1 even (3 of which are down less than 10%).

We were down 2.6% this past week and are now up 11.4% so far in 2007. The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from -1.2% (NASDAQ) to -1.8% (DOW) last week. The Dow is up 5.2%, NASDAQ is up 6.2 and the S+P 500 is up 2.5% for the year.

Our OB-abies contine to lag, and LINN.ob is killing us. BDR and LINN.ob are the weakest companies fundamentally and we are looking for an economic exit on these two. The rest of our stocks are looking good, in our opinion.

We are now up about 2 times the DOW, 1.8 times the NASDAQ and over 4 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up between 2.35% and 2.79% for the year.

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)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)

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 11 stocks that we have closed out in 2006 and 2007 the average gain was 33%. 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 7 positions in 2007 compared to 4 in all of 2006.

Sold PDLI last week for a measely 3% gain. MEDW earnings last week.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Down $.20 to $14.53 last week.
Short Interest fell 21% to 4.5 million at August 15th.
Apparently SPNC lost their appeal on a patent case. Will cost under $1 million, and they already reserved for the case in 2006. So no P+L impact going forward.
We still think $18-$20 is in the cards for this year.
Guidance has not been updated yet for the TURBO Booster.
Now up 36% so far. HOLD.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93,Valuation $12.84 (was $11.27, $15.92, $13.69, $13.73 and $11.86)
Closed at $7.63, down $.51.
QAD announced their quarterly $.025 dividend last week and a new 1 million share buy-back. No one cared.
Up 10% so far. BUY.

PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation–maybe $25
Sold last week at $19.95. Should have taken profit in this one north of $25.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $4.58, down $.06 for the week.
Not much action here lately. Hopefully this quarter results will build on the last one and DWCH will get noticed again.
DWCH is now trading at 49% of our valuation.
Now up 43%. BUY.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $9.20 (Was $8.63, $13.77)
PARL closed at $3.75, down $.01 last week.
Another decent quarter and we should be back in the black on this one.
New management needs to keep moving this company is the right direction.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 22%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.26 even for the week.
BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up. As we mentioned above, we are looking to get back to even on this one and get out, even though the valuation is compelling.
Trading at 29% of our valuation.
No news.
Down 31%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.34 down $.20 for the week.
No news.
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.
Down 6%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Up $.36 to $9.19 last week.
Interesting action on Friday. Traded 490,000 shares, almost 25 times its normal avgerage daily volume and traded as high as $9.66.
Stephen Roseman (Director) now has 627,728 shares or 7.9% of the company after steady buying all this year.
With the insider buying and discount to our valuation, we like this stock alot.
No news.
Up 4%. BUY on dips below $9.00.

Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $12.89 (was $13.40)
Up $.36 to $7.33 last week.
As we wrote a few days ago, their earnings last week were ok.
Our valuation slipped a bit to $12.89 from $13.40, but we view this just as a seasonal variation. Has cash of $2.70 a share (37% of its market cap.) and is trading at 57% of our valuation. We still like this one.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Up 10%. HOLD

Cimatron (CIMT-Recommended 8/12/2007
Buy Price $2.12, Valuation $7.53
Down $.05 to $2.12 last week.
No news.
Even. BUY

Candela Corp. (CLZR-Recommended 8/30/2007
Buy Price $7.26, Valuation $11.51
Down $.01 last week to $7.21.
No news.
Down .7%. BUY

OB-abies (Bulletin Board Listed Stocks)

If not for the drops in LINN.ob, AVSO.ob and OPTO.ob, we would have been up almost 1% last week.

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.45, up $.07 last week.
No news
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 $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.08, down another $.02 last week.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
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 65%. 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 $1.52, down $.10 last week.
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.
It has been over 2 months now since their announcement–We would expect to hear an update soon.
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”.
No news.
Up 22% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, down $.10 last week.
AVSO announced a restructuring in late July 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 28% of our valuation. Just too CHEAP.
Now down 9%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.38 (Was $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price was unchanged at $.39. Closed at $.34.
This is still trading at only 30% of our latest valuation, but we still have to until the VOIP business stops losing money, we are not buyers–yet.
Up 44% based on the ASK price. HOLD