Cheap Stocks, 3/9/2012 Update

Another “slow” week for the market averages. But we were up 2.4% last week and are now up 18.9% for the year.

Some of our stocks are just stupid cheap—compared to their net cash on hand. Check this list:

Cash as % of Stock Price:

RIMG 65%
EXTR 41%
PTIX 51%
GRVY 75%
CCUR 86%
MTSL 35%
SIGM 94%
ASTX 73%
CTIG 112%
MRVC 40%
ANGN 44%

Plus EXTR, RIMG, ANGN and MRVC.PK are all in “play” with activist shareholders either trying to get them to pay out special dividends or take them over, or they are pursuing “strategic alternatives”.

The DOW was down .4% last week, NASDAQ was up .4% and the S+P 500 was up .1%. The Russell 3000 was up .2%.

AVNW, CBEY, MTSL, and MITL are our favorites.

ASTX and SIGM earnings last week.

For the year, the DOW is up 5.8%, NASDAQ is up 14.8%, S+P 500 is up 9%, and the Russell 3000 is up 9.6%

Last week we went 14 stocks up, 9 down and 1 unchanged. Since inception we are now 57 stocks up and 16 down for a 78% winning percentage (80% is our target win %).

Since our beginning, 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%
2007-QADI +25%
2007-CIMT +50%
2007-BDR +19%
2007-LINN.ob -57% (mortgage business bust didn’t help here)
2007-TISA -39% (take some tax loss for 2007 due to disappointing results.
2008-ANGN +26%
2008-OPTO.ob +40% (Buy-out offer)
2008-PDLI +9% (company split, and special dividend)
2008-BDAY -39% (long overdue takeover offer-or “take-under”)
2008-DTLK +40% (third trip on this one)
2008-ILOG +26% (Buy-out offer from IBM)
2008-PARL +56%
2009-MBRK +67%
2009-SNWL +14%
2009-CYNO +25%
2009-DTLK +33%
2009-NED +46%
2009-CUTR +13%
2009-HSTM +67% (continued good earnings)
2009-RNWK +36%
2009-OPK +116%
2009-CLZR -32% (a loser even on a buy-out)
2009-DTLK +28% (our 5th profitable trip on this one)
2010-HPOL +110%
2010-DIVX +25%
2010-CHRD +37% Buyout (2 weeks after we recommended it)
2010-HPOL +30%
2010-MGIC +82%
2010-GSL +78%
2010-CCEL +49%
2010-HPOL +27%
2010-CAW EVEN (excluding 2.5 years of dividends)
2011-DWCH +116%
2011-IPAS +15%
2011-PRM +56% Buyout (1 week after we recommended it)
2011-RST +12%
2011-NINE -10%
2012-BVSN +30%

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 49 stocks that we closed out since 2006 (44 were winners) the average net gain was 37%.

Aviat Networks Inc. (NASDAQ-AVNW)-Recommended 2/27/2012)
Buy Price- $2.62
Valuation $8.31
Closed up $.29 at $2.69
Up 3%, BUY

CBeyond Inc. (NASDAQ-CBEY)-Recommended 2/28/2012)
Buy Price- $7.94
Valuation $29.21
Closed up $.38 at $7.67
Down 3%, BUY

Top Image Systems. (NASDAQ-TISA)-Recommended 12/7/2011)
Buy Price-$2.03
Valuation $4.98 (Was $4.89)
Closed down $.03 at $3.12
Earnings announced in March. Another good quarter. Revenue rose 25% to $7.3 million and they made $.04 per share compared to a $.09 loss last year. For the year they made $.23 per share. Their guidance for 2012 was great. Revenues expected to rise approximately 20% and it looks like $.35 per share in EPS is possible. Our valuation rose slightly to $4.98.
TISA announced a $2 million order to do the Italian census in January. Good news just keeps coming here.
TISA published a letter to shareholders in January, noting all the positives about the company and stating that they still believe the shares are still undervalued. Seemed to get some attention as the trading volume and price are up.
Up 54%, HOLD

MRV Communications (Pink Sheets-MRVC.pk)
Valuation $2.45 (after $.0475 special dividend)-(Was $2.92, $3.09)
Buy Price October 7, 2011- $.80 ($1.27 before special dividend)
Closed up $.05 at $1.05
MRV announced a new CEO in February, an internal guy. At least we have a leader to sell the company now.
Raging Capital has bought more than 6 million more shares in January. They now own over 23 million shares or 14.98%. Looks like the massive number of shares came from Wells Fargo (13G/a) selling some of their large position.
CFO and VP of Finance has resigned and gotten lucrative “stay” bonuses if they stay through March 31, 2012 and get the 10K filed. We think the “stay” bonus is really to get the company sold by then.
Now it looks like all the directors are resigning from MRV. Pretty odd, but they approved the sale of CES. There might be some kind of buy-out in the works that all the directors disagree with-just speculation on our part.
MRV announced in December that it was selling it’s CES subsidiary to a private equity group for net cash proceeds of about $20 million (net of $4.1 million of escrow hold backs). This will add another $.13 to the remaining hoard of about $.42. CES’s sales, margins are not disclosed in any of their SEC filing so it is not possible to adjust our valuation for this transaction yet. The transaction is expected to close by the end of January.
Earnings announced in November. Revenue was $62.5 million down from $66.1 million last year. Net income was $2.1 million or $.01 per share comparer to $3.6 million last year ($.02 per share). Cash before the $75 dividend dropped slightly to $150 million or $.90 per share. Our valuation dropped to $2.45 per share which is still more than double the current price.
Up 20%, HOLD

Sigma Designs Inc. (NASDAQ-SIGM)-Recommended 7/11/2011)
Buy Price-$8.49
NEW Valuation $8.41 (Was $12.10, $13.40, $16.02)
Closed down $.59 at $4.93
“Earnings” announced last week. Not good. Revenues down 50% from last year and down 10% from the previous quarter. They lost $18 million $.58 per share ($14 million non-GAAP loss) for the quarter. Cash was $150 million or $4.60 per share but down $1.06 per share for the year. They are saying they expect to reach profitability and cash flow positive operations by the end of this fiscal year (January 2013). Our valuation plunged to $8.41 per share.
Mak Capital One LLC filed a 13G in November disclosing a 6.6% (2,110,000 shares) stake in SIGM.
So we are trading at a market cap of about $26 million (excluding cash) for a $150- $200 million a year chip company with 50% margins. Still pretty stupid we think. With the falling valuation we are thinking of selling, but will hold on for another couple of quarters to see if they can turn this around.
Down 42%, Weak-HOLD

Mitel Networks (NASDAQ-MITL)-Recommended 7/6/2011)
Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $12.81 (Was $15.28, $14.04, $10.39)
Closed down $.05 at $3.41.
Earnings announced in March. Revenues from continuing operations were up 5% to $150 million and they made a profit of $.08 on a GAAP basis and $.22 a share on a non-GAAP basis. MITL is selling it’s DataNet/CommSource units which contributed about $14 million in sales during the quarter but are not included in their sales figures and therefore our valuation. Due to this reclassification to “discontinued operations” our valuation fell to $12.81 per share, still more than 3 times its current trading price. Overall we think this is a great earnings report, and this is a buying opportunity.
Up 12%, BUY

Rimage (NASDAQ-RIMG)-Recommended 5/24/2011)
Buy Price-$14.20
Valuation $$19.81 (Was $22.23, $25.63, $26.45)
Closed up $.33 at $10.95
Pays $.68 a share annual dividend.
Earnings announced in February. Hmmm. Sales fell from $24.7 million to $21.7 million and they were breakeven on a Non-GAAP basis with a reported loss of $.13 per share. Cash fell to $70 million or $6.87 per share as they spent $2 million on share buybacks and our overall valuation fell to $19.61.
Guidance for 2012 is low double digit sales growth and the same level cash flow. They also declared their $.17 quarterly dividend. Teetering on selling here despite the yield.
Down 23%, HOLD

Lexmark International (NYSE-LXK)-Recommended 5/24/2011)
Buy Price-$28.80
Valuation $67.94 (Was $63.84, $79.12, $63.99)
Closed down $.22 at $35.73
Pays $1.00 per share annual dividend.
Earnings announced in February. Good as expected. Revenues were $1.06 billion and they made $1.25 per share on a Non-GAAP basis. They ended the year with $6.91 per share in net cash and our valuation rose to $67.94. They repurchased 7.9 million shares over the last couple of quarters and ended up with 74 million fully diluted shares used in the EPS calculation in Q4. They reiterated their intent to return over 50% of their free cash flow to shareholders in dividends and share repurchases and then they announced another $30 million (730,000 share) repurchase on Friday. They have just over $200 million left on their stock repurchase authorization.
This would normally be a “buy” with such a huge discount to our valuation, but the vagaries on the stock analysts make us cautious.
Up 24%, HOLD

MER Telemanagement (NASDAQ-MTSL)-Recommended 5/17/2011)
Buy Price-$1.42 (Was $1.50 before adding another $10,000 investment)
Valuation $6.28 (Was $5.61, $5.11)
Closed down $.04 at $1.98
MER announced a joint venture in January, but with a tiny company. It was not enough to even get 100 shares traded after the announcement.
Last earnings out in November. Sales were up from $2.7 million to $3 million and they made $226,000 ($.05 a share) versus $14,000 last year. Cash per share rose to $.68 from $.63 last quarter and our valuation rose to $6.28 per share. Overall a very good report, but no reaction in the stock price. For the 9 months ended September 30th, they have made $.13 per share compared to $.01 last year.
MER announced a contract extension in August of $2.5 million (minimum). This is almost 50% of MER’s entire market cap. .
Up 39% HOLD

Harris Interactive (NASDAQ-HPOL)-Recommended 3/3/2010)
Buy Price-$.92
Valuation $3.05 (Was $2.90, $3.11, $2.63, $2.97)
Closed at $1.03, up $.10
HPOL’s new, “permanent” CEO is already in action. They announced last week a $3 million share buy back program and forecast that adjusted EBITDA for 2012 would increase about 54% from 2011 and that they believe their shares are undervalued. We do too.
Earnings announced in February. Things are looking up! Although revenues were down from $45 million last year to $39 million, operating income more than doubled to $2.1 million from $.9 million and net income rose to $1.6 million from $.3 million last year. Net cash also rose to over $5 million or $.10 per share. Our valuation jumped to $3.05.
A Director reported buying 10,000 shares in December at $.65 a share..
Up 12%, HOLD

Concurrent Computer (NASDAQ-CCUR)-Recommended 2/4/2011)
Buy Price-$5.08
Valuation $14.13 (was $11.38, $14.04, $18.54, $15.99)
Closed down $.13 at $3.61
Earnings announced in February. Better than the previous quarter for sure, but just ok. Sales were down from $17.9 million last year to $16.4 million, but well above the $12.9 in Q3. They lost $833,000 compared to $1,189,000 last year and $2.6 million in Q3. Cash fell from $3.50 to $3.10 per share as receivables increased by $3.2 million ($.37 per share). Overall our valuation rose to $14.13.
Down 29%, HOLD

Astex Pharmaceuticals Inc. (Was SuperGen Inc.) (NASDAQ-ASTX)-Recommended 10/4/2010)
Buy Price-$2.31 (was $2.09 before adding $10,000)
NEW Valuation $3.42 (was $3.22, $3.11, $5.21, $4.89, $4.37, $3.48)
Closed up $.06 at $1.88
Well the FDA officially turned down Astx’s application for a new indication for Dacogen. Not unexpected, but a damper on the stock price for sure.
Earnings were announced last week also. Not bad. Revenue for the year was just over $66 million and they made $5.5 million in net income. Cash was $1.37 a share. Our valuation fell to $3.22 a share on the negative effects of the merger on net income.
Projections for next year are for revenues to rise by about 10% and a net loss of $13-$15 million of which about $10 million appear to be non-cash charges.
So we have a company losing maybe $5 million in cash a year, or 25 years of cash, about $70 million in revenues and a huge drug pipeline. Any good news on the clinical trials front ought to set this stock on fire.
As we said before, the merger with the revenue poor Astex hurt our valuation which does not take into account the massive drug pipeline of Astex. It is not easy to find a small drug company that has a pile of cash, is not losing a ton of money and is trading at even close to our valuation.
There are $2 BILLION of potential milestone payments down the road.
Down 18%, BUY

Performance Technology (PTIX-Recommended 3/30/2010)
Buy Price-$2.70
Valuation $6.17-(was $5.94, $4.87, $4.99, $3.79, $3.87, $5.03, $5.98, $7.13)
Closed down $.09 at $2.21
Earnings announced in March. Sales rose 34% to $9.1 million and they made a profit! $473,000 or $.04 per share. On a Non-GAAP basis they made $1 million or $.09 per share. Cash stayed level at $1.12 per share and our valuation rose to $6.17.
Down 18%, BUY

Extreme Networks (EXTR-Recommended 3/22/2010)
Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$7.01 (was $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed up $.06 at $3.78
Earnings announced in February. Revenues dropped a tad from $85 million last year to $83 million and they made $5.8 million of net income on a Non-GAAP basis versus $5.1 million last year. Cash per share rose to $1.56 per share from $1.50 and our valuation rose to $7.01 per share. The company also announced last week that they have sold an option to a possible buyer of their corporate headquarters in California for $48.5 million. The option lasts until the end of 2012. That would add another $.50 a share (pre-closing costs and taxes) to the cash till.
Starboard was cleared to buy up to 15% of EXTR as disclosed in an SEC filing in June.
Starboard Value Fund filed another 13D/A in August 2011 disclosing that they had upped their stake again to 9.9%.
Up 19%, BUY

Gravity Company Ltd. (GRVY-Recommended 1/18/2010)
Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $5.39-(Was $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed up $.02 at $2.72
Ragnarok 2’s final test began 12/26/2011. We have our fingers crossed that this really is the final test. Final product release is supposed to be in March.
Earnings announced in November. Not bad at all. Revenues rose 8% to $13.4 million and they made $3.1 million or $.11 per ADS. For the nine months ended September 30th, they have made $.25 per ADS. Cash fell about $1.5 million to $2.05 per ADS.
Our valuation rose a bit to $5.39, and at less than cash value and way below our valuation this is one good lottery ticket if they ever commercially release Ragnarok 2.
Up 87%, HOLD

AEterna Zentaris (AEZS-Recommended 6/20/2009)
Buy price $1.42 (was $1.78 before adding another $10,000, $1.82 before double up)
Valuation –Speculation.
Closed up $.08 at $1.83
OMG! Zacks ranks AEZS #1. Will wonders never cease. Updated interim results on AEZ-108 were announced at ASCO in February—they were positive, but this is still Phase 1. AEZS also announced they were selling another 10 million shares under their “at the market” program.
AEZS announced a collaboration deal in January with a division of Roche on AEZ-108.
Earnings announced in November. Revenues rose to $9.5 million from $7.5 million and they lost $8.2 million versus $5.5 million from operations. They continue to sell stock under their “at the market” program and raised $15.8 million during and just after the quarter. They had $48 million of cash at September 30th and about $54 million after their latest stock sales. Shares outstanding are up over 100 million now.
This is pretty normal for a developing drug company.
Speculative for sure.
Up 29%, HOLD

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $5.68 (was $8.90, $9.40 before adding $10,000, and was $10.65 before double up),
Valuation –$13.00 (was $12, $10)
Closed up $1.14 at $8.75
Earnings announced in February. Revenues were up 11% and they made $.04 on a non-GAAP basis (lost $.06 on a GAAP basis after the litigation charge and license termination charge). Cash rose to $39 million, gross margins improved a bit also. Guidance for 2012 is a 5-7% increase in revenues and $.04-$.08 in earnings per share, excluding two new product introductions anticipated for mid year introductions.
.This company needs to be sold so that someone can take advantage of their 70%+ gross margins and enjoy some profits.
Paragon filed a 13D/A in May 2011 disclosing they had upped their stake to 7%.
Up 54%, HOLD

Mediware (MEDW-Recommended 6/4/2007)
Buy Price $6.33, (was $6.52, $6.67 ($10,000 added), $6.98 after double up)
Valuation $18.15 (was $17.96, $18.34, $16.07, $15.04, $14.23, $15.02, $14.35, $12.13, $12.57, $12.29, $11.90, $11.30, $11.48, $11.47 $10.99, $10.28, $13.32, $12.89, $13.40)
Closed up $.25 at $15.44
Earnings announced in February. Another good report. Sales were up 18%, pre-tax income was up 30%, but due to a higher tax rate EPS was flat at $.21 per share. Cash rose to $4.27 per share and our valuation moved up again to $18.15.
MEDW announced an acquisition in January. The acquired company sells software into the same customers as MEDW but in the adult stem cell and cord blood management area. No financial information about the acquisition or its revenues was disclosed. Looks like another growth area for the company. Constellation Software, who owns over 20% of MEDW announced in January that they had concluded their analysis of strategic alternatives. This is the code for they couldn’t find a buyer. Good company but already overvalued. Maybe they will turn their attention back to acquiring MEDW? We can dream.
All we read is that medical records will be a hot area, so MEDW looks like the place to be.
Up 144%, HOLD

Inuvo (INUV (was-VTRO, MIVA)-Recommended 10/21/2007)
Buy Price $8.15 (Was $11.90 before adding another $20,000, $13.10 before another $10,000 and was $15.00 before double up),
Valuation $8.04 (was $10.91, $12.42, $14.23, $14.76, $12.40, $12.55, $10.85, $8.25, $9.45, $28.05, $32.10, $34.20, $37.90, $37.95)
Closed at $.82 down $.24
The Inuvo/VTRO merger closed in March and we now have 1.546 shares of INUV for each VTRO share we had before. We will wait a bit to see it .5 plus .5 can make 2.
They expect merger cost savings to be more than $2.4 million a year.
Should have sold this when it traded over $6.
Down 85% HOLD

Angeion Corporation (ANGN-Recommended 8/28/2008)
Buy Price-$3.82 (was $5.15 before $10,000 added)
Valuation $13.36 (was $15.90, $13.13, $13.19, $13.60, $15.00, $13.06, $12.15, $11.29, $11.73, $11.47, $11.16, $9.53, $13.30, $13.03)
Closed down $.28 at $5.55
Earnings announced in March. Ok, but certainly not great. Revenues were flat at $7.1 million and they lost $249,000 or $.07 per share, slightly better than last years $.09 per share loss. Cash rose slightly to $2.42 per share and our valuation fell to $13.36 compared to $13.60 in the same quarter last year.
Angeion disclosed in an SEC filing in December that they had retained an investment banker to look at “strategic alternatives” that may also involve the sale of its New Leaf product line. Company could be for sale, or just a part of it. In any event this should be good news for us shareholders and ANGN continues to be significantly undervalued.
CEO bought 10,000 shares in September at $4.25. Good sign.
If this company could just show a bit of growth I think we would see $10 in short order—if.
Blueline Partners still owns 7.6% of ANGN and ought to be pushing on the company to do something about the stock price.
While ANGN is still trading at less than ½ our valuation, we are switching to a HOLD until we gets some results or news that improves the prospects here.
Up 45%, HOLD

OB-abies (Bulletin Board Listed Stocks)

As proven by OPTIO, patience is necessary with these 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 $5.81 (was $5.72, $5.65, $5.39, $4,86, $5.60, $5.73, $5.54, $5.74, $5.96, $4.72, $5.19, $5.66, $5.63, $5.61, $5.71, $5.49, $5.34, $5.03, $5.28, $5.28, $5.21)
Closed at $1.55 up $.05.
Earnings due out Thursday, March 15th, after the market closes.
ARI announced a reseller win in February in addition to one in January for a 160 dealer outfit.
Earnings out in December. Revenues were up slightly to $5.410 million from $5.324 last year. Net income rose to $272,000 from $99,000 and EPS rose to $.03 from $.01 (fully taxed). Our valuation rose to $5.81 per share.
Looks like they may be serious about getting the stock price up and more visibility for the company.
Hmm, in addition to earnings and all the other recent announcements, the CEO got an amendment to his “change of control” agreement. Wonder why they are reviewing these kind of agreements right now?
ARIS announced in October that they had engaged a PR firm, saying their stock was undervalued and the business had great opportunities ahead.
ARIS filed an 8k in September with presentation materials for a “potential investor”.
Management finally looks like it is waking up and trying to increase the share price. Got a long way to go yet though.
Now down 4%, BUY, Still a Huge valuation gap here.

Rand Worldwide (RWWI.ob (Was Avatech, AVSO.ob)-Bought November 28, 2005)
Buy price $.79 (Was $.93, $.99 and $1.19 before adding $10,000-each time),
Valuation $2.08 (was $2.09, $2.12, $2.60, $2.40, $1.90, $2.26 $3.07, $3.03, $2.38, $2.57, $2.81, $2.78, $3.30, $3.76, $4.00 $3.41, $3.05, $2.53, $3.25, $3.29 $2.69, $3.36, $3.81)
Stock closed at $.67, up $.01
RWWI announced an acquisition in March, but gave no financial details. “If a tree falls in the forest but there is no one around to hear it, dies it make a sound”? Seems like the company is making no effort to get this company known to the investment community. We have been in this one a LONG time and are getting impatient.
Earnings announced in February. Decent. Sales were $22.5 million up from $21.7 million last year, gross margin was 47% and they made $1 million or $.02 per share. Our valuation dropped $.01 to $2.08 as there were 3 million more fully diluted shares outstanding. Cash was still a net negative, but getting close to even. Market cap of $34 million for an $80 million in sales company with almost 50% margins and not losing money, just too cheap.
Still more than 2X the current price.
Down 16%, HOLD

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask,
Valuation $1.37 (Was $1.23, $.91, $1.21, $.71, $.83, $.88 $.96, $.93, $.75, $.85, $1.57, $1.40, $1.29, $1.38, $1.31, $1.38, $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price $.117, closed at $.10.
CEO reported another 44,000 of stock purchases in late 2011 at $.095 to $.10 per share.
Earnings announced in November. Revenues were up 30% to $4,379,000 and they made $200,000 excluding a $289,000 severance charge. Yikes. Not bad. VOIP revenues were $475,000 up from $170,000 in the prior year and up slightly from the June quarter ($461,000). VOIP still lost $481,000 but this is down from $667,000 last year and $545,000 last quarter. Cash per share fell to $.13 (still more than the current market price) and our valuation rose again to $1.37 per share.
One of their Directors, Michael Reinarts, filed a 13D in November disclosing a 9.5% ownership stake. There were no specific proposals in the filing. We’ll have to wait and see what happens here. We know the stock is ridiculously cheap, and filing a 13D usually precedes some type of activist position.
At a $2.6 million market cap, this is stupidly cheap. Their intellectual property is probably worth 10 times this price. They need to liquefy this value somehow.
They might have to sell or shut this VOIP business down in our opinion. Just losing too much money, and eroding shareholder value–or it could be a home run.
Still an “undercover” company and stock.
Down 57%. BUY

Lotus Pharmaceuticals (LTUS.ob-Recommended 12/3/2007)
Buy price $1.68 (Was $1.80 before $10,000 adder, $2.16 before double-up)
Valuation-$.85 (Was $1.05, $2.43, $4.11, $4.84, $4.98, $4.60, $3.82, $4.00, $3.68, $3.12, $3.98, $4.44, $3.22, $2.12, $4.56, $4.16)
Closed at $.24, unchanged
Oiy! Lotus announced in January that they had “sold” their Mongolian land. They get nothing for it and give up 3 drugstores in Bejing and $7 million of receivables. Not good as reflected on the huge (percentage wise at least) drop in the stock. This has indeed become a cheap lottery ticket. 5 shares for a buck. We are licking our wounds on this one, but will just wait it out. It may go to $0, or may hang around in the penny stock range for a while. The move into the new building has commenced and the warehouse (supposedly critical to selling in Bejing) will be functional by March and production to start by September.
Earnings announced in November. Revenues were up slightly over last year at $19 million versus $18.3 last year, but gross margins remained low and they made $2.1 million of $.04 per share compared to $.25 last year. Our valuation fell again to $.85.
Down 86%, HOLD

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