Datawatch (NASDAQ-DWCH) +77%

DWCH announced great Q4 yesterday. Sales up 29% to $6.9 million and they made $.14 per share (untaxed). Cash rose to $3.8 million ($.64 per share). Our valuation went up to $10.30 a share from $9.28 (11%). The stock hit $6.45 briefly yesterday but closed at $5.58.

Even though we are now up 77% on DWCH, it is only trading at 54% of our valuation–so it is still a good value. W would expect a bit of a rebound today after it gave up early gains yesterday afternoon. We would look for at least $7 on this–maybe much more if their sales and earnings acceleration continue for another quarter or 2.

HOLD.

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11/24/2007—Up 2.5% for the week

Last week we went 4 up and 10 down and 3 even. Even with all these losers last week, we were able to book a nice gain on the backs of DWCH (+11%), MIVA (+17%) and DTLK (+8%). We sold our biggest dog LINN.ob for a 57% loss.

For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +2.5%,+16.7% and +34.6% respectively. Since inception we are now 19 stocks up and 12 down( 9 of which are down less than 15%).

We were up 2.5% this past week and are now up 16.6% so far in 2007. The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from 1.2% (S+P 500) to 1.5% (NASDAQ) last week. The Dow is up 4.2%, NASDAQ is up 7.5 and the S+P 500 is up 1.6% for the year.

We are now up about 4 times the DOW, 2.2 times the NASDAQ and about 10 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are up about 1% and 2% 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%
2007-CIMT +50%
2007-BDR +19%
2007-LINN.ob -57% (mortgage business bust didn’t help here)

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 15 stocks that we have closed out in 2006 and 2007 the average gain was 26%. We are tired of watching our stocks go up–and then down. So we are taking profits a bit sooner than in 2006. We have already closed out 11 positions in 2007 compared to 4 in all of 2006.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Up $.35 to $15.52.
SPNC has held up pretty well despite the market swoon. One more conference on the 28th. Everything seems to be be clicking along on plan here.
Now up 46% 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 $5.10, up $.50.
Hopefully this quarter results will build on the last one and DWCH will get noticed again.
Their former CEO–Robert Hagger announced his retirement–as he continues to sell his shares each week. Hard to tell what this means. Just have to wait for quarter to be announced on November 27th.
DWCH is now trading at 55% of our valuation.
Now up 62%. HOLD.

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 $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.18, down $.16.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
Now trading at 39% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 13%. BUY.

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 $20.51 (was $23.22, $20.99, $20.52)
Closed at $11.58 down $.08.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
A buy-out is a decent possibility here.
Down 4%. HOLD

Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Down $.53 to $8.60.
The “turnaround” is not yet done.
Spencer Capital has resumed buying BDAY lately. Added another 4,800 shares at $9.09 on 11/5 bringing their total holdings to 1,502,221 shares or about 19%. Roseman also bought a few more shares–1,600 at $8.90 to $9.12.
Down 3%. BUY.

Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
Down $.25 to $7.00.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 5%. BUY

Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.13 to $6.35.
No news.
Down 13%. HOLD

Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.17 to $2.58.
TISA pre-announced Q3 five weeks ago. They will not do over $7 million in revenue and will do only between $6 and $6.3 million–and will lose between $1.4 and $1.6 million. Some of this loss is from integration costs from their acquisitions of Asiasoft and CPL, but not clear how much. The final earnings release will not be out until November 28th. They still have plenty of cash, but looks like we will be waiting another quarter or two to make money on this one.
Down 21%. HOLD

Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Down $.03 to $6.36.
No news.
Down 16%. BUY

MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
UP $.39 to $2.68.
No news.
UP 5%. HOLD

PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $.04 to $17.99.
Third Point, the guys who started all the commotion about getting the CEO out and selling the company—sold all their shares. Lots of speculation as to why–but no one knows for sure except Third Point.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.1 billion. Their pipeline, and know-how has to be worth something.
No matter, they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 10%. HOLD

Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
UP $.31 to $4.12.
There is value here.
No news.
Trading at only 44% of our valuation.
Down 4%. BUY

OB-abies (Bulletin Board Listed Stocks)

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 $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.40, unchanged.
Back to sleep on ARI. Maybe some day their managment will take care of us shareholders.
Now down 13%. 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)
Sold at $.10 last week. 57% loser.

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 $1.22, down $.03.
Has cash of $.38 per share–30% 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 4 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”.
DOWN 2%. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), New Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.89, down $.01.
AVSO announced Q1 earnings 2 weeks ago. Not bad at all, in our opinion. Sales were up to $12.4 million from $12 million last year (3%), but net income was up to $489,000 from $36,000 last year. Earnings per share were $.02. Our valuation is now $3.05 per share. AVSO is trading at 30% of our valuation.
We are guessing $55 million of revenue this 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 100% from here.
Now down 10%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, NEw Valuation $1.17 (Was $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price unchanged at $.30. Closed at $.27.
Earning out 2 weeks ago. Sales were $5.35 million, up 68% from $3.2 million last year.
Without about $800,000 of patent enforcement costs, they would have broken even for the quarter, but this all dropped to the bottom line for a $808,000 loss–$.03 per share. One of these days CTIG is going to hit on all cylinders and get to $1.
Our valuation dropped a bit to $1.17, but, this is still trading at only 26% of our latest valuation.
Up 11% based on the ASK price. BUY

11/17/2007 Update

Last week we went 8 up and 10 down and 1 even. Our biggest DOG is LINN.ob (which we are SELLING), as it is our only stock down more than 16%. For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +1.8%,+14.1% and +31.8% respectively. Since inception we are now 19 stocks up and 11 down( 9 of which are down less than 15%) and 1 even.

We were up 1.8% this past week and are now up 14.1% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from .4% (S+P 500 and NASDAQ) to 1.0% (DOW) last week. The Dow is up 5.7%, NASDAQ is up 9.2 and the S+P 500 is up 2.9% for the year.

LINN.ob is our the weakest company fundamentally and we are throwing in the towel on this one. SELL it. BDR which was on our “hit” list surprized us with some good earnings and we took the opportunity to cash it out at a 19% gain–up 98% from the prior week. The rest of our stocks are looking good, in our opinion. We also cashed out of CIMT last week on a good earnings report for a 50% gain.

We are now up about 2.5 times the DOW and 1.5 times the NASDAQ and about 5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up about 3%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%
2007-CIMT +50%
2007-BDR +19%

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 14 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 10 positions in 2007 compared to 4 in all of 2006.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Down $.26 to $15.17.
SPNC got caught up in the market swoon too. Even the 2 analyst conferences last week did not hold the price up. One more conference on the 28th. Everything seems to be be clicking along on plan here.
Now up 42% 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, down $.20.
Hopefully this quarter results will build on the last one and DWCH will get noticed again.
Their former CEO–Robert Hagger announced his retirement–as he continues to sell his shares each week. Hard to tell what this means. Just have to wait for quarter to be announced on November 27th.
DWCH is now trading at 50% of our valuation.
Now up 46%. HOLD.

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 $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.34, up $.09.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months.
Now trading at 40% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 9%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.31 (was $4.01, $5.12, $5.88).
SOLD at $2.18 last week for a 19% gain. Good thing too, as the stock gave back a lot of its gains by the end of the week. It closed at $1.66 up from $1.10 the previous week.
If the price falls much further–we may come back on this one. Valuation is now $5.73, but their CEO was selling into the price rise with a vengence–34,000 shares from $1.70 to $2.15. So we will sit on the sidelines for a while and watch.

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 $20.51 (was $23.22, $20.99, $20.52)
Closed at $11.66 down $.48.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
3 product/customer press releases last week. Maybe they are serious about getting noticed (and maybe sold).
Down 4%. HOLD

Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Up $.20 to $9.13.
The “turnaround” is not yet done.
Spencer Capital has resumed buying BDAY lately. Added another 4,800 shares at $9.09 on 11/5 bringing their total holdings to 1,502,221 shares or about 19%. Roseman also bought a few more shares last week–1,600 at $8.90 to $9.12.
Up 4%. BUY.

Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
Up $.32 to $7.25.
Good to see MEDW back above $7. Little volume though.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 9%. BUY

Cimatron (CIMT-Recommended 8/12/2007)
Buy Price $2.12, Valuation $7.53
SOLD at $3.17 for a 50% gain. Earnings were good. CIMT also gave back a chunk of its gains and closed the week at $2.77. Our valuation soared to $10.45, but in this market we will take a 50% gain and watch for a while.
Like BDR, we are watching this one closely and may be back in here again if the price falls anymore.

Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.60 to $6.48.
No news.
Down 11%. HOLD

Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.08 to $2.76.
TISA pre-announced Q3 five weeks ago. They will not do over $7 million in revenue and will do only between $6 and $6.3 million–and will lose between $1.4 and $1.6 million. Some of this loss is from integration costs from their acquisitions of Asiasoft and CPL, but not clear how much. The final earnings release will not be out until November 28th. They still have plenty of cash, but looks like we will be waiting another quarter or two to make money on this one.
Down 16%. HOLD

Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Down $.60 to $6.39.
No news.
Down 15%. BUY

MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $2.62 (Was $3.00 before double up), Valuation $7.58 (was $7.59)
UP $.05 to $2.29.
No news.
Down 11%. BUY

PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $1.19 to $18.03.
Third Point, the guys who started all the commotion about getting the CEO out and selling the company—sold all their shares. Lots of speculation as to why–but no one knows for sure except Third Point.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.1 billion. Their pipeline, and know-how has to be worth something.
No matter, they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 10%. HOLD

Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.29 to $3.81.
Market swoon took away all of our fast gains on DTLK. There is value here.
No news.
Trading at only 41% of our valuation.
Down 11%. BUY

OB-abies (Bulletin Board Listed Stocks)

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 $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.40, down $.02.
Back to sleep on ARI. Maybe some day their managment will take care of us shareholders.
Now down 13%. 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.
We figure Lion has about $.18 a share in cash now. Should be trading higher, but their remaining business generated only $1 million in sales last quarter and they lost $.9 million (excluding goodwill impairment loss and depreciation). They may get another $.10-$.15 a share in contingent payments from their sold divisions.
Our valuation has dropped to—-$.18, not counting these contingent payments. They say their cost reductions will be more apparent in Q4–but they only generated $317,000 in gross margin in this last quarter and had $1.25 million in expenses!.
We don’t think they can turn this around and will eventually burn through all their cash. So we are reluctantly SELLING Lion–time to take some tax losses. 57% loss here.

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 $1.25, down $.10.
Has cash of $.38 per share–30% 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 4 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”.
Even on this one. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), New Valuation $3.05 (was $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, up $.01.
AVSO announced Q1 earnings last week. Not bad at all, in our opinion. Sales were up to $12.4 million from $12 million last year (3%), but net income was up to $489,000 from $36,000 last year. Earnings per share were $.02. Our valuation is now $3.05 per share. AVSO is trading at 30% of our valuation.
We are guessing $55 million of revenue this 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 100% from here.
Now down 9%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, NEw Valuation $1.17 (Was $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price up $.02 at $.30. Closed at $.27.
Earning out last week. Sales were $5.35 million, up 68% from $3.2 million last year.
Without about $800,000 of patent enforcement costs, they would have broken even for the quarter, but this all dropped to the bottom line for a $808,000 loss–$.03 per share. One of these days CTIG is going to hit on all cylinders and get to $1.
Our valuation dropped a bit to $1.17, but, this is still trading at only 26% of our latest valuation.
Up 11% based on the ASK price. BUY

11/10/2007 Update (Brutal Week)

Last week we went 5 up and 14 down. Our biggest DOGS are: LINN.ob, and BDR both down 30% or more. For last week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -7.1%,+12.3% and +30% respectively. Since inception we are now 20 stocks up and 11 down( 8 of which are down less than 15%).

We were down 7.1% this past week and are now up 12.3% so far in 2007. The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from 3.7% (S+P 500) to 6.5% (NASDAQ) last week. The Dow is up 4.7%, NASDAQ is up 8.8 and the S+P 500 is up 2.5% for the year.

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–even MIVA (see below).

We are now up about 2.5 times the DOW and 1.4 times the NASDAQ and about 5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up about 3% 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.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $20-$22
Down $.44 to $15.43.
After dropping to the low $14 range on Thursday, SPNC roared back to only a small loss. Everything seems to be be clicking along on plan here. 2 analyst conferences next week (13th and 14th) and one on the 28th. SPNC is becoming a real growth story. We are raising our expectation to $20-$22 over the next year.
Now up 45% 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 $4.80, up $.10.
Hopefully this quarter results will build on the last one and DWCH will get noticed again.
Their former CEO–Robert Hagger announced his retirement–as he continues to sell his shares each week. Hard to tell what this means. Just have to wait for quarter to be announced on November 27th.
DWCH is now trading at 52% of our valuation.
Now up 53%. HOLD.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), NEW Valuation $10.80 (Was $9.20, $8.63, $13.77)
PARL closed at $4.25, up $.26.
Lets see, sales up 38%, made $.10 a share fully taxed and paid down $8 million of debt over the past 6 months. Good news in a lousy week. What timing.
Our valuation moved up to $10.80 from $9.20–pretty significant (note they did not publish a balance sheet in their press release so we will have to wait for their 10Q to finalize our valuation). Now trading at 39% of our valuation.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
Down 11%. 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 $1.10 down $.05.
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 26% of our valuation.
Earnings due out next Wednesday in the morning. Let’s keep our fingers crossed for some good news here.
Down 40%. 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), NEW Valuation $20.51 (was $23.22, $20.99, $20.52)
Closed at $12.14 down $.55.
ILOG Q1 earnings were disappointing. Our valuation dropped to $20.51 from $23.22.
For FY2008 (this year) they are STILL projecting another 20% increase in sales and a tripling of operating income. They still have $3.35 a share in cash.
3 product/customer press releases last week. Maybe they are serious about getting noticed (and maybe sold). No impact in this market of course.
UP .5%. HOLD

Celebrate Express (BDAY-recommended 4/17/2007)
Buy Price $8.82, NEW Valuation $15.51 (Was $17.85 $18.18)
Up $.08 to $8.93.
The “turnaround” is not yet done.
Spencer Capital has resumed buying BDAY lately. Added another 4,800 shares at $9.09 on 11/5 bringing their total holdings to 1,502,221 shares or about 19%.
Up 1%. BUY.

Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.67, (was $6.98 after double up ($10,000 added) NEW Valuation $13.32 (was $12.89, $13.40)
Up $.11 to $6.93.
As we wrote earlier this week, MEDW announced their Q1 earnings last week. Sales up 27%, made $.05 per share fully taxed. Again, like Parlux–good news in a terrible week.
Little information in their 10Q on their acquisition other than it cost $5.2 million. Have to wait and see what they bought here. Should have cash of $2.15 a share after the acquisition (31% of its market cap.) and is trading at 52% of our valuation.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
UP 4%. BUY

Cimatron (CIMT-Recommended 8/12/2007)
Buy Price $2.12, Valuation $7.53
UP $.36 to $3.06.
Earnings due out 11/14 after the close.
Up 44%. HOLD

Candela Corp. (CLZR-Recommended 8/30/2007)
Buy Price $7.26, Valuation $11.51
Down $.18 to $7.08.
No news.
Down 3%. HOLD

Top Image Systems, Ltd. (TISA-Recommended 9/27/2007)
Buy Price $3.28, Valuation $5.46
Down $.06 to $2.84.
TISA pre-announced Q3 four weeks ago. They will not do over $7 million in revenue and will do only between $6 and $6.3 million–and will lose between $1.4 and $1.6 million. Some of this loss is from integration costs from their acquisitions of Asiasoft and CPL, but not clear how much. The final earnings release will not be out until November 28th. They still have plenty of cash, but looks like we will be waiting another quarter or two to make money on this one.
Down 13%. HOLD

Angeion Corp. (ANGN-Recommended 10/14/2007)
Buy Price $7.55, Valuation $13.67
Down $.63 to $6.99.
No news.
Down 7%. BUY

MIVA. (MIVA-Recommended 10/21/2007)
Buy Price $3.00, NEW Valuation $7.58 (was $7.59)
Down $.44 to $2.24.
Earnings came out on Thursday. Sales fell 7% from last year and they lost $3.7 million or $.11 a share on a GAAP basis. After adding back some special items, “adjusted EBITDA” was $.8 million and cash went up $.9 million from the previous quarter. Our valuation fell just $.01 to $7.58. MIVA is trading at only 30% of our valuation and they have $.72 a share in cash. So we will double up on this one for a new average buy price of $2.62.
Down 25%. BUY

PDL Biopharma. (PDLI-Recommended 10/21/2007)
Buy Price $20.04, Valuation $24.00 to $30.00
Down $1.44 to $19.22.
PDL announced Q3 results last week. Sales fell about 1% and they lost $6.1 million on a GAAP basis. On non-GAAP basis they made $19.3 million. Royalties were up 30% to $55 million–$220 million a year. Product sales were up 19% to $49 million–$196 million a year.
At 7X the royalty revenue and 3X the product sales, you get $2.1 billion in value comapared to the current market cap of $2.25 billion. Their pipeline, and know-how has to be worth more than $100 million–in our opinion.
No matter, they said they are still trying to sell the company.
So we are just waiting for them to announce the sale of the company and for how much.
Down 4%. BUY

Datalink. (DTLK-Recommended 10/31/2007)
Buy Price $4.28, Valuation $9.39
Down $.82 to $4.10.
Market swoon took away all of our fast gains on DTLK. There is value here.
No news.
Down 4%. BUY

OB-abies (Bulletin Board Listed Stocks)

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), NEW Valuation $5.49 (was $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.42, down $.17.
Back to sleep on ARI. Maybe someday their managment will take care of us shareholders.
Now down 12%. 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, down .5 cents.
Back to sleep here. We figure Lion has about $.16 a share in cash now. Should be trading higher.
Lion announced a month ago, an agreement to sell their TRMS unit for $1.2 million minuimum. Not clear what this units revenues are, or the multiple they got on the sale, but between the 2 tranactions they have announced deals worth at least $6.2 million or $.16 per share. They still have their “loan” business and said in their press release:
“The sale of the TRMS business, together with our recent sale of Mortgage 101 to Internet Brands, strengthens the Company’s financial footing and allows us to fully concentrate on our core business, the loans group, while continuing to explore a variety of strategic alternatives.”
Five weeks ago 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. 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 $1.35, down $.10.
Has cash of $.38 per share–28% 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 4 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 8% 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 $3.23 (was $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.89, down $.01.
For FY 2008 they said on the last 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 100% from here.
Our current valuation is based on the full year FY2007 results and dropped only $.02 from our last valuation.
Earnings out 11/14 in the morning.
Trading at 28% of our valuation.
Now down 10%. 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 down $.05 at $.28. Closed at $.27.
Well CTI finally traded–only to participate in the market slide.
Still, little interest in this stock. Management needs to get some going.
This is still trading at only 20% of our latest valuation.
Up 4% based on the ASK price. BUY

Mediware and Market

Well the market just stinks, as the credit woes continue to rattle everything. Most of our stocks are now participating in the “crash”. While the NASDAQ is still up almost 14% on the year, the broader averages are only up about 4% (Russell 3000, Wilshire 5000, S+P 500). The mighty DOW is now up about 7%. We are getting hammered this week and are only up about 10% right now. As always, paience.

Mediware announced earnings this week. Sales up 27%, made $.05 in profit and the stock is down $.07 at $6.75. Who can figure. Our valuation went up to $13.32 from $12.89 which is very good. Now trading at 51% of our valuation. BUY.