We are a little hesitant to recommend MOBI after it has moved up from around $6.60 to Friday’s close of $7.08, but here we go.

Our current valuation of MOBI is $12.69 per share (up from $11.59 a year ago). MOBI also had about $2.30 per share in cash (32% of market cap). We think that MOBI is a prime take-over candidate due to it’s lackluster financial performance and stock price performance over the last couple of years. Also, if they can hit their Q4 sales projections the stock ought to move up just on the fact that they actually hit them and are moving in the right direction. The stock price has not cracked $8 in 2 years, and was as high as $15 back in early 2004 (take-over rumours), but is trading at only 56% of our valuation. MOBI needs to be sold to a bigger software company that can leverage MOBI’s top notch customer list with other products and cut the sales and G+A overhead and make some real profits with MOBI’s products. We expect that this will be another boring, wait-for-a-while stock. But these are the ones that usually get sold.

Be patient in buying this one. We have an small open order in at $6.70, which actually partially filled last week after it closed the previous day at over $7.00. We were about to cancel the order. So maybe some cheaper stock can be had due to tax season!

From their last press release, here’s what they do:

Mobius Management Systems, Inc. (www.mobius.com) is a leading provider of integrated solutions for enterprise archiving and records management. The company’s comprehensive software suite integrates content across disparate repositories, supports regulatory compliance, and includes content-enabled applications that automate business processes. Mobius solutions have achieved industry-wide recognition for breadth of functionality, breadth of supported formats, and high-volume, high-demand performance. The Mobius customer base is made up of leading companies across all industries, including more than sixty percent of the Fortune 100.

RITT is an Isaeli company that sells software solutions to both the enterprise and Telco “carrier” market. Our current valuation of RITT is $2.69 per share (after last weeks Q3 earnings announcement) up from our previous valuation of $2.56. RITT announced sales of $6.062 million down 15% from the previous year and a net loss of $182,000 ($.01 per share). Stock dropped from about $1.25 to $1.00. While the results don’t scream BUY, we think this is a good entry point. RITT has about $.38 per share in cash, and has cut its quarterly losses almost to the point of break-even. At the same time its Enterprise sales are up 31% year-over-year, and carrier sales are off 80%. In their press release they seems optimistic that carrier sales are coming back (looks like they had none in Q3 and for the 9 months carrier sales are off $6.7 million). If they can keep the momentum on the enterpise side and book a couple of carrier sales in the next quarter or 2, this could easily double. Also Special Situations Fund owms about 17% of RITT. These are pretty smart guys (although they bought at $1.66 early in 2006). BUY.

From the latest RITT press release, here’s what they do:

“RiT is a leading provider of physical network infrastructure control and management solutions. Deployed in the networks of many of the world’s largest carriers and enterprises, its pioneering, fast-ROI products have proven their ability to simplify service deployment and provisioning, enhance troubleshooting accuracy, reduce infrastructure maintenance costs, enhance physical layer security and enable cost-effective service qualification and verification”.

We went 4 up, 8 down last week. Our model portfolio year-to-date gain, dropped 1.1% to 10.1%. DWCH continued as our biggest dog followed by, Linn.ob, MIVA, INFT and ARIS.ob. Since the start of the year we are 11 up and 5 down. Mini-caps continue to lag way behind the market We did start to see some impact from tax loss selling last week as LINN.ob and INFT dropped for no reason.

This wacky year-end trading can provide some good buying opportunities as people are dumping some stocks almost with no regard to price. For example, IYXI.ob dropped to $1.89 on Wednesday and closed at $2.35 (24% recovery), and MOBI (Mobius Mgmt.) was trading over $7.00 and dropped to $6.58 on the open on Thursday and closed at $7.03 (7% swing). MOBI is one of the stocks we have followed for a number of years and have traded in and out of. More later on this one.

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

SPNC-(Buy price $10.65, Valuation $18-$20). Price got whacked another $.39 to $11.48 last week. No news, just the shorts and market makers playing games with 100 share trades again. Up 8% so far. HOLD

QADI-(Buy price $6.93, Valuation $13.73 (was $11.86). Closed at $8.10, down $.16. Announced a small acquisition last week–about $4 million in cash purchase price. Yield about 1.2%. Trading at only 60% of valuation. Has $1.30 in cash also. Up 17% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.97, up $.89. PDLI has almost recouped it’s losses over the past 2 weeks. Huge acquisition premiums on KOS Pharma and Tanox last week had to help. Now up 9%. BUY.

MIVA-(Buy price $3.80, NEW Valuation $7.52 (was $7.38 and $9.10)). MIVA closed at $3.27, up $.03. New valuation crept up $.14 to $7.52, not great but al least in the right direction. They still have a lot of work to do to get this company profitable. Now down 14% to date. HOLD.

DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $2.34, down $.06, still a loser–down 36%. HOLD to see how this quarter turns out on November 21. Valuation gap is still huge, but declining. VSNT, DTLK, NTCT did nothing for a long time–until they announced some good earnings and then all took off. Lets hope this is DWCH’s quarter.

INFT-(Buy price $4.11, New Valuation $6.95 (was $6.86)). Down $.27 last week to $3.73. Still has $2.52 per share in cash. Price objective $5.50. Now down 9%. I think that there is some tax loss selling going on here, and just impatience. Frustrating stock. BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.21)). Closed at $2.00, down $.10 last week. This stock is still pretty illiquid so price moves are fairly meaningless at this point. They announced that they retained the Stihl business last week and the CEO was speaking at some college forum. At least they are alive! Now down 3% so far. BUY if you can find some shares. Huge valuation gap.

Linn.ob-(Buy price $.36, NEW Valuation $.62 (was $.66 and before that-$.79)). Closed at $.28, down $.01 last week. Still trading at only 45% of our current valuation. Down 22% YTD. HOLD until we get some revenue growth and stop losing money (same story as last quarter).

OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.32, up $.12. OPTIO announced that they collected a $2.8 million note that they had partially written-off. So in addition to the $.12 per share in cash that this will add, they will also have a $900,000 (about $.04) gain to report. Now in the plus column with a 6% gain. HOLD.

AVSO.ob-(Buy price $1.19, Valuation $3.36 (was $3.81)). Stock closed at $1.50, down $.04. Now up 26%. No news, just lack of interest in this and other mini-caps right now. Maybe some tax loss selling for those that bought at $2.50. Still only trading at only 45% of our valuation. Earning to be announced on Wednesday this week. BUY.

CTIG.ob-(Buy price $.27 ask, Valuation $1.05 (Was $.82)). Ask price dropped $.01 to $.29. Closed at $.26. Cash is $.28 per share. Up 7% so far (based on asked price). If you own this HOLD. If you don’t-BUY.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed up $.01 at $2.33, up 22% to date. IYXI traded over 700,000 shares on Wednesday. It dropped as low as $1.89 and bounced back strongly by the end of the day/week. Someone wanted to take their tax loss early–and did. This is still very risky, but could be a real barnburner is they do what they say they are going to do. HOLD.

We went 3 up, 8 down and 2 even last week. Our model portfolio year-to-date gain, dropped 3.5% to 11.2%. DWCH continued as our biggest dog followed by, Linn.ob, MIVA, OPTO.ob and INFT. Since the start of the year we are 11 up and 5 down. Mini-caps continue to lag way behind, although CAW got a take-over last week. The CAW “take-under” was not enough to offset drops in SPNC, PDLI and Linn.ob. We should also start to see some impact from tax loss selling soon. This may provide some opportunities in stocks like DWCH, MIVA and INFT to pick up some even cheaper shares.

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

Lots of news last week:

SPNC-(Buy price $10.65, Valuation $18-$20). Price got whacked $1.47 to $11.87 last week. Good Q3 results and the Forbes article knocked our gain in SPNC by more than 50% last week. Now up 11%. Sales were up 44%, laser system placements were a record, they were profitable when you exclude stock option BS. Q3 sales exceeded Q2 even though Europe goes on vacation in Q3. Q4 sales are projected at $16.2 to $18.2 million. Lets hope they continue their record of being conservative and hit or exceed the high end of this range. Oh yeah, they also have $51 million in cash and no debt. All good reasons for the stock to go down–NOT. Conference call went well too. HOLD

CAW-(Buy price $9.45, Valuation $19.35 TAKE-OVER). Closed up $1.19 at $11.39. Dubilier offered a measly $12 for our shares and $14.50 for the Class A (insider) stock. This is a ridiculously low offer in our opinion, but the insiders apparently like it and we are not going to wait around to see if it gets any better. In this market, we will take our 22% gain in 5 months adn go home. SELL at $11.50 or better.

QADI-(Buy price $6.93, Valuation $13.73 (was $11.86). Closed at $8.26, unchanged. Yield about 1.2%. Trading at only 60% of valuation. Has $1.30 in cash also. Up 19% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.08, down $.80. PDLI released earning last week. Sales were up 44% (maybe 44% is an unlucky number?), non-GAAP net income was $26.5 million or $.43 per share. Royalty revenue was up 64%!! Then Prudential downgrades them. Go figure. How many bio-tech companies are getting bought-out that have no revenues at all. PDLI will do over $400 million this year (almost 1/2 of which are 100% margin royalties), are profitable on a non-GAAP basis and have great prospects? Now up 4%. BUY.

MIVA-(Buy price $3.80, Valuation $7.38 (was $9.10)). MIVA closed at $3.24, up $.18. Now down 15% to date. HOLD until we see their full earnings results for the quarter and update our valuation.

DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $2.40, unchanged, still a loser–down 34%. HOLD to see how this quarter turns out on November 21. Valuation gap is still huge, but declining.

INFT-(Buy price $4.11, New Valuation $6.95 (was $6.86)). Down $.08 last week to $4.00. Still has $2.52 per share in cash. Price objective $5.50. Now down 3%. BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.21)). Closed at $2.10, down $.08 last week. This stock is still pretty illiquid so big moves are fairly meaningless at this point. Now up 2% so far. BUY if you can find some shares. Huge valuation gap.

Linn.ob-(Buy price $.36, NEW Valuation $.62 (was $.66 and before that-$.79)). Closed at $.29, down $.055 last week. Still trading at only 47% of our current valuation. Down 19% YTD. Linn announced Q3 results last week. They were weak again. Sales down 6% from Q2 and down 17% form the prior year. Net loss was $215,000 or $.01 per share. Cash burn was minimal and they still had about $.11 per share. They did announce some new initiatives that sound interesting such as selling auto insurance, credit cards, auto financing off their web-site. This company really should be sold to a bigger company. HOLD until we get some revenue growth and stop losing money (same story as last quarter).

OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.20, up $.02. Still in the red with a 4% loss. BUY.

AVSO.ob-(Buy price $1.19, Valuation $3.36 (was $3.81)). Stock closed at $1.54, down $.16. Now up 29%. No news, just lack of interest in this and other mini-caps right now. Maybe some tax loss selling for those that bought at $2.50. Still only trading at only 46% of our valuation. BUY.

CTIG.ob-(Buy price $.27 ask, Valuation $1.05 (Was $.82)). Ask price dropped $.01 to $.30. Closed at $.30. Cash is $.28 per share. Up 11% so far (based on asked price). If you own this HOLD. If you don’t-BUY.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed down $.10 at $2.32, up 21% to date. This is still very risky, but could be a real barnburner is they do what they say they are going to do. They did sign a new contract manufacturing agreement last week, but it couldn’t hold the stock price up. HOLD.

We went 6 up, 6 down and 1 even last week. Our model portfolio year-to-date gain, crept up 1.3% to 14.7%. DWCH continued as our biggest dog followed by, MIVA, OPTO.ob, Linn.ob and INFT. Since the start of the year we are 11 up and 5 down.

Two stocks we have followed for a while (but unfortunately didn’t recommend because the discount to our valuation was not big enough) got take-over offers last week–Metasolv (MSLV) and Indus (IINT). MSLV got an offer at $4.10 and rose 20% last week, our valuation interestingly was exactly $4.10. IINT got an offer for $3.85 and rose 45%. Our valuation was $3.24 down from $4.43 previously.

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

SPNC-(Buy price $10.65, Valuation $18-$20). Price was up $.21 to $13.34 last week. If Q3 earnings are good, as expected we could see new highs here. Nice mention on Forbes.com this morning too. Now up 25%. HOLD

CAW-(Buy price $9.45, NEW Valuation $19.35 (was $18.40)). Closed up $.02 at $10.20. Yield about 3%. Up 8% so far. BUY.

QADI-(Buy price $6.93, Valuation $13.73 (was $11.86). Closed at $8.26, down $.24 on no news. Yield about 1.2%. Trading at only 60% of valuation. Has $1.30 in cash also. Up 19% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.88, up $.22. Got over $21 for a while but dropped back down. Now up 8%. HOLD.

MIVA-(Buy price $3.80, Valuation $7.38 (was $9.10)). MIVA closed at $3.06, down $.06. Now down 19% to date. HOLD until we see their full earnings results for the quarter and update our valuation.

DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $2.40, down $.05, still a loser–down 34%. HOLD to see how this quarter turns out. Valuation gap is still huge, but declining.

INFT-(Buy price $4.11, New Valuation $6.95 (was $6.86)). Down $.14 last week to $4.08. Still has $2.52 per share in cash. Valuation moved up slightly based on this weeks earning report, but no one cared. Price objective $5.50. Now down 1%. BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.21)). Closed at $2.18, up $.28 last week. This stock is still pretty illiquid so big moves are fairly meaningless at this point. Now up 6% so far. BUY if you can find some shares. Huge valuation gap.

Linn.ob-(Buy price $.36, Valuation $.66 (was $.79)). Closed at $.345, up $.045 last week. Still trading at only 52% of our current valuation. Down 4% YTD. HOLD until we get some revenue growth and stop losing money.

OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.18, down $.05. Still in the red with a 6% loss. BUY.

AVSO.ob-(Buy price $1.19, Valuation $3.36 (was $3.81)). Stock closed at $1.70, down $.02. Now up 43%. No news, just lack of interest. Still only trading at only 51% of our valuation. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.05 (Was $.82)). Ask price stayed at $.31. Closed at $.31. Cash is $.28 per share. Up 15% so far (based on asked price). If you own this HOLD. If you don’t-BUY.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed up $.03 at $2.42, up 27% to date. This is still very risky, but could be a real barnburner is they do what they say they are going to do. HOLD.

INFT released earnings this afternoon. Pretty good. Sales up 6% and they made $.03 per share.
Valuation increased from $6.86 to $6.95 per share. It closed today at $4.17. It traded at $5.31 in afterhours, but only on 500 shares. Have to wait until the morning to see if any of this gain holds. Keep your fingers crossed. Cash per share dropped a penny to $2.51.

We went 9 up, 4 down last week. Our model portfolio year-to-date gain, however dropped .7% to 13.4% as AVSO.ob and IYXI.ob had substantial weekly drops. DWCH continued as our biggest dog followed by, MIVA, LINN.ob, ARIS.ob and OPTO.ob . Since the start of the year we are 11 up and 5 down.

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

SPNC-(Buy price $10.65, Valuation $18-$20). Price was up $.15 to $13.13 last week. If Q3 earnings are good, as expected we could see new highs here. Now up 23%. HOLD

CAW-(Buy price $9.45, NEW Valuation $19.35 (was $18.40)). Closed up $.20 at $10.18. Yield about 3%. Valuation moved up to $19.35. Up 8% so far. BUY.

QADI-(Buy price $6.93, Valuation $13.73 (was $11.86). Closed at $8.50, up $.01. Yield about 1.2%. Trading at only 62% of valuation. Has $1.30 in cash also. Up 23% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.66, up $.28. Now up 7%. HOLD.

MIVA-(Buy price $3.80, Valuation $7.38 (was $9.10)). MIVA closed at $3.12, up $.03. Now down 18% to date. HOLD until we see their full earnings results for the quarter and update our valuation.

DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $2.45, up $.18, still a loser–down 33%. HOLD to see how this quarter turns out. Valuation gap is still huge, but declining.

INFT-(Buy price $4.11, Valuation $6.86 (was $7.32)). Up $.14 last week to $4.22. Still has $2.52 per share in cash. Price objective $5.50. Now up 3%. BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.21)). Closed at $1.90, down $.20 last week. This stock is still pretty illiquid so big moves are fairly meaningless at this point. Now down 8% so far. BUY if you can find some shares. Huge valuation gap.

Linn.ob-(Buy price $.36, Valuation $.66 (was $.79)). Closed at $.30, up $.01 last week. Still trading at only 45% of our current valuation. Down 17% YTD. HOLD until we get some revenue growth and stop losing money.

OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.23, up $.08. Still in the red with a 2% loss. BUY.

AVSO.ob-(Buy price $1.19, Valuation $3.36 (was $3.81)). Stock closed at $1.72, down $.15. Now up 45%. No news, just lack of interest. Still only trading at only 51% of our valuation. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.05 (Was $.82)). Ask price dropped $.01 to $.31. Closed at $.30. Cash is $.28 per share. Up 15% so far (based on asked price). If you own this HOLD. If you don’t-BUY.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed down $.12 even at $2.39, up 25%. This is still very risky, but could be a real barnburner is they do what they say they are going to do. HOLD.

We went 7 up, 4 down and 2 even last week. Our model portfolio year-to-date gain, was up 1.8% to 14.1%. The mini-caps have still been lagging in our opinion. DWCH continued as our biggest dog followed by, MIVA, LINN.ob, OPTO.ob and INFT. Since the start of the year we are 11 up and 5 down.

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

SPNC-(Buy price $10.65, Valuation $18-$20). Price jumped $1.29 to $12.98 last week, on a Citicorp recommendation and shorts getting squeezed a bit. Now up 22%. HOLD

CAW-(Buy price $9.45, NEW Valuation $19.35 (was $18.40)). Closed up $.15 at $9.98. Yield about 3%. Valuation moved up to $19.35. Up 6% so far. BUY.

QADI-(Buy price $6.93, Valuation $13.73 (was $11.86). Closed at $8.49, up $.24. Yield about 1.2%. Trading at only 62% of valuation. Has $1.30 in cash also. Up 23% so far. HOLD.

PDLI-(Buy price $19.31, Valuation > $30)–Closed at $20.38, up $.20. Now up 6%. HOLD.

MIVA-(Buy price $3.80, Valuation $7.38 (was $9.10)). MIVA closed at $3.09, up $.15. Now down 19% to date. HOLD until we see their full earnings results for the quarter and update our valuation.

DWCH-(Buy price $3.66, Valuation $7.63 (was $9.31)). Closed at $2.27, down $.11, still a loser–down 38%. HOLD to see how this quarter turns out. Valuation gap is still huge, but declining.

INFT-(Buy price $4.11, Valuation $6.86 (was $7.32)). Down $.02 last week to $4.08. Still has $2.52 per share in cash. Price objective $5.50. Now down a tiny .7%. BUY.

OB-abies

ARIS.ob-(Buy price $2.06, Valuation $5.28 (was $5.21)). Closed at $2.10, up $.15 last week. Now up 2% so far. BUY if you can find some shares. Huge valuation gap. Valuation moved up a bit to $5.28.

Linn.ob-(Buy price $.36, Valuation $.66 (was $.79)). Closed at $.29, down $.02 last week. Still trading at only 44% of our current valuation. Down 19% YTD. HOLD until we get some revenue growth and stop losing money.

OPTO.ob-(Buy price $1.25, Valuation $2.54 (was 2.88)). Closed at $1.15, down $.05. Now back in the red with a 8% loss. BUY.

AVSO.ob-(Buy price $1.19, Valuation $3.36 (was $3.81)). Stock closed at $1.87, up $.06. Now up 57%. Still only trading at only 57% of our valuation. HOLD.

CTIG.ob-(Buy price $.27 ask, Valuation $1.05 (Was $.82)). Ask price stayed at $.32. Closed at $.32. Cash is $.28 per share. Up 19% so far (based on asked price). If you own this HOLD. If you don’t-BUY.

IYXI.ob-(Buy price $1.91, Valuation–over $3.00). Closed even at $2.51, up 31%. This is still very risky, but could be a real barnburner is they do what they say they are going to do. HOLD.

ARI reported Q4 and Year results this morning. Not great, not bad either. Our valuations crept up to $5.28 per share. So at $2.00, ARI is trading at 38% of our valuation. CHEAP!. Sales for Q4 declined slightly from $3.6 million to $3.4 million but reported earnings (pre-tax) were up a tad to $533k from $455k. Reported EPS was $.11 for the quarter and $.49 for the year. These EPS numbers include tax credits, so normalized for a 36% tax rate EPS would have been $.05 and $.20 respectively. So we are trading at a PE of 10, fully taxed and fully diluted. For 2007, they are expecting to pay off most of their remianing debt and to grow revenues. They are expecting operating income to be flat as they invest in sales and marketing to grow revenues–which is what they need to do. A new deal with Harley and Buell in Europe, Middle East and Africa should start moving sales up–as early as Q1 2007 (October 2006). We will see. This remains one of the cheapest, profitable stocks around. Gross margins are over 80% too. Drawbacks are that it is small–$14 million in annual sales, trades on the Bulletin Board, and has hardly any float. This is a perfect buy-out candidate in our opinion. BUY–if you can find shares!

CCA (CAW-AMEX), filed their 10Q yesterday. New valuation is indeed over $19. $19.35 to be exact. Gross margins were a hair under 70% and things look good. Now we just have to wait for the market to catch up. With Costa Brava nipping at their heels, there is pressure to get the stock price up to fair value. Closed at $9.82, now up 4%. BUY

Spectranetics (SPNC-NASDAQ), Looks like Citigroup issued a buy recommendation on SPNC. Price target=$17. Stock reacted nicely yesterday-closed at $12.36. We are now up 16%. HOLD