We are now up 20.7% for the year.
DEXM, XRSC earnings last week.

Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

Last week we went 3 stocks up, 12 down and 1 even. Since inception we are now 67 stocks up and 15 down for a 81.7% 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 by IBM)
2008-PARL +56%
2009-MBRK +67%
2009-SNWL +14%
2009-CYNO +25%
2009-DTLK +33% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%

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).

Buy Price $11.80
Valuation $28.27
Closed down $.46 at $12.46
Next earnings due out Tuesday, August 27^th after the market close.
UP 7% HOLD

Buy Price $15.14
Valuation $24.25
Closed down $4.18 at $11.47
Earnings announced last week for the June 30^thquarter. Not enough detail to do a full valuation and hopefully the 10Q will fix that. But, it looks like combined revenues (on a pro-forma basis since the merger was completed April 30^th) were $568 million versus $684 million last year and EBITDA was $224 million versus $286 million last year. Using a simple 3.5X EBITDA less net debt valuation and 15 million shares outstanding we come up with a value per share of $30. We didn’t see any big sellers last week, so we think it is just people shocked by the $10 a share loss reported.  We believe this is an overreaction, but will not double up here as there really is a lot of debt and this will need a couple of more quarters of performance before it is proven they can handle the debt and survive for the long term. As far as we can tell they seem to be on track with their plan as filed with the SEC on 12/6/2012.
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Down 24% BUY

Buy Price $1.50
NEW Valuation $6.16 ( Was $6.79, $6.50)
Closed down $.44 at $2.36
Earnings announced last week. Ok for such an undervalued company. Revenues were $13.4 million down from $15.6 million last year. Margins grew from 49% to 61% and they made $.07 profit on a Non-GAAP basis versus a $.03 loss last year. The company continues to transition to a software company (less lower margin hardware sales) as software revenues were 84% of revenues versus 76% last year. Our valuation fell to $6.16 a share-still more than double the current stock price.
UP 57%, HOLD

Buy Price $1.09 (Was $1.20 before we doubled up)
Valuation $4.64 (Was $4.86, $4.00)
Closed down  $.16 at 1.37
Kurt Jensen a 10% owner continues to sell stock at almost any price, putting a lid on DAEG. He still has 1.6 million shares, so this could take a while.
Earnings announced in June. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Up 26%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed unchanged at $1.25
Next earnings due out Wednesday, August 14^thafter the market close.
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Up 1%, BUY

Buy Price- $1.37
Valuation $6.28 (Was $4.89, $6.02, $6.72, $5.49)
Closed down $.08 at $2.71
Earnings announced in July. Revenues fell from $115 million to $93 million, but most of this sales shortfall was low margin government pass-through business. Gross margin increased to 39% from 30% last year. They lost $700,000 versus a profit of $1.6 million last year. Our valuation actually popped back up to $6.28 as net debt decreased and margins expanded.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 96%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed up $.05 at $2.66
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
UP 2%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $27.58 (Was $28.24, $28.33, $29.04, $29.59, $29.58, $29.21)
Closed down $.23 at $6.78
Earnings announced in July. Nothing to write home about. Sales were $118.2 million versus $123.8 million last year and they lost $41,000 versus making $2.7 million last year. Apparently the earnings were $.05 better than estimates—whoo—hoo.
They also lowered their guidance to $464-$471 million (from $475-$485 million) and adjusted EBITDA guidance to $76-$80 million from $75-$82 million. This was pretty much a non-event to us as our valuation fell a tad to $27.58.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
Down 5%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $9.95 down $.55
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 16%  HOLD

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed down $.10 at $5.16
Raging Capital filed a 13D/A in July showing sales of about 500,000 shares at prices from $4.96 to $5.68 lowering their stake to 6.6%.
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 39%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed down $.16 at $4.68
Earnings announced in June. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 54%, HOLD

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed down $.41 at $8.17 (including dividends)
Pays $.48 annual dividend.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
The Singer/Miller group disclosed in a Form 13D that they  sold about 70,000 shares in June, July and August at prices of $8 to $8.5 a share. They still own 8.4% of the company or about 775,000 shares. Still not good news.
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
UP 78%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$7.33 (was $6.58, $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $4.08 down $.04
Earnings announced in July. Mediocre as usual. While revenues were up from $68.2
million last quarter to $79.5 million this quarter, they were down from $87.7 million last year. Gross margin held steady around 55% and they made $.03 a share versus $.08 last year. Cash per share rose to $2.17 and our valuation rose back up to $7.33.
Guidance for next quarter is revenue of $72-$77 million of revenue and Non-GAAP net income of $2-$6 million.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 28%, HOLD

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.17 up $.01
Gravity reported their Q1 results in May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 20%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.87 down $.03
Wynnefield partners bought another 100,000 shares at $2.90 in the first week of July raising their stake to over 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 78%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.29 closed at $.29
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 7%. HOLD

EXTR, CBEY earnings last week.
Not one takeover so far this year. We feel left out.

Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

The DOW was up .6% last week, NASDAQ was up 2.1% and the Russell 3000 was up 1.2%. For the year, the DOW is up 19.5%, NASDAQ is up 22.2% and the Russell is up 20.7%.
DXM, BLIN, MRVC, GRVY and CBEY can still be bought.

Last week we went 8 stocks up, 7 down and 1 even. Since inception we are now 67 stocks up and 15 down for a 81.7% 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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%
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).

Buy Price $11.80
Valuation $28.27
Closed down $.26 at $13.05
Next earnings due out Tuesday, August 27^th after the market close.
UP 11% HOLD

Buy Price $15.14
Valuation $24.25
Closed up $.19 at $15.65
Next earnings due out Wednesday, August 7^thbefore the market opens.
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 2% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed unchanged at $2.80
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 87%, HOLD

Buy Price $1.09 (Was $1.20 before we doubled up)
Valuation $4.64 (Was $4.86, $4.00)
Closed up $.33 at 1.53
Earnings announced in June. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Up 41%, HOLD

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed down $.03 at $1.25
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Up 1%, BUY

Buy Price- $1.37
Valuation $6.28 (Was $4.89, $6.02, $6.72, $5.49)
Closed up $.05 at $2.77
Earnings announced in July. Revenues fell from $115 million to $93 million, but most of this sales shortfall was low margin government pass-through business. Gross margin increased to 39% from 30% last year. They lost $700,000 versus a profit of $1.6 million last year. Our valuation actually popped back up to $6.28 as net debt decreased and margins expanded.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 102%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed down $.05 at $2.61
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
Down 1%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
NEW Valuation $27.58 (Was $28.24, $28.33, $29.04, $29.59, $29.58, $29.21)
Closed down $1.63 at $7.01
Earnings announced last week. Nothing to write home about. Sales were $118.2 million versus $123.8 million last year and they lost $41,000 versus making $2.7 million last year. Apparently the earnings were $.05 better than estimates—whoo—hoo.
They also lowered their guidance to $464-$471 million (from $475-$485 million) and adjusted EBITDA guidance to $76-$80 million from $75-$82 million. This was pretty much a non-event to us as our valuation fell a tad to $27.58.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.39 a share in net cash and a $230 market cap. Cheap.
Down 2%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $10.50 up $.30
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December 2012, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December 2012 at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 22%  HOLD

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed up $.01 at $5.26
Raging Capital filed a 13D/A in July showing sales of about 500,000 shares at prices from $4.96 to $5.68 lowering their stake to 6.6%.
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 38%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed up $.20 at $4.84
Earnings announced in June. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 59%, HOLD

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed up $.49 at $8.58 (including dividends)
Pays $.48 annual dividend.
We have collected $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 87%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
NEW Valuation-$7.33 (was $6.58, $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $4.12 up $.07
Earnings announced last week. Mediocre as usual. While revenues were up from $68.2
million last quarter to $79.5 million this quarter, they were down from $87.7 million last year. Gross margin held steady around 55% and they made $.03 a share versus $.08 last year. Cash per share rose to $2.17 and our valuation rose back up to $7.33.
Guidance for next quarter is revenue of $72-$77 million of revenue and Non-GAAP net income of $2-$6 million.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 30%, HOLD

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.16 down $.02
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 20%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.90 down $.08.
Wynnefield partners bought another 100,000 shares at $2.90 in the first week of July raising their stake to over 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 80%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.28 closed at $.28
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 4%. HOLD

TSYS earnings last week.
Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

Last week we went 9 stocks up, 6 down and 1 even. Since inception we are now 69 stocks up and 13 down for a 84.1% 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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%

Buy Price $11.80
Valuation $28.27
Closed up $.38 at $13.31
Next earnings due out Tuesday, August 27^th after the market close.
UP 13% HOLD

Buy Price $15.14
Valuation $24.25
Closed down $1.00 at $15.46
Next earnings due out Wednesday, August 7^thbefore the market opens.
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 2% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed unchanged at $2.80
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 87%, BUY

Buy Price $1.09 (Was $1.20 before we doubled up)
Valuation $4.64 (Was $4.86, $4.00)
Closed up $.05 at 1.20
Earnings announced in June. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Up 11%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed up $.09 at $1.28
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Up 3%, BUY

Buy Price- $1.37
NEW Valuation $6.28 (Was $4.89, $6.02, $6.72, $5.49)
Closed up $.38 at $3.00
Earnings announced last week. Revenues fell from $115 million to $93 million, but most of this sales shortfall was low margin government pass-through business. Gross margin increased to 39% from 30% last year. They lost $700,000 versus a profit of $1.6 million last year. Our valuation actually popped back up to $6.28 as net debt decreased and margins expanded.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 99%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed up $.01 at $2.66
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
UP 2%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed down $.20 at $8.64
Next earnings due out Wednesday, July 31^st after the market close.
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 21%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $10.20 up $1.20
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 19%  BUY

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed down $.19 at $5.25
Raging Capital filed a 13D/A in July showing sales of about 500,000 shares at prices from $4.96 to $5.68 lowering their stake to 6.6%.
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 38%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed up $.09 at $4.64
Earnings announced in June. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 53%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed down $.05 at $8.09 (including dividends)
Pays $.48 annual dividend.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 77%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $4.04 up $.14
Next earnings due out Tuesday, July 30^th after the market close.
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 27%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.18 up $.04
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 19%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.98 up $.08.
Wynnefield partners bought another 100,000 shares at $2.90 in the first week of July raising their stake to over 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 85%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.28.5 closed at $.285
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 6%. HOLD

No earnings last week.

Check this list:

Last week we went 15 stocks up and 5 down. Since inception we are now 68 stocks up and 16 down for a 82.9% winning percentage (80% is our target win %).

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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%
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).

Buy Price $11.80
Valuation $28.27
Closed up $.19 at $12.93
Next earnings due out Tuesday, August 27^th after the market close.
UP 10% BUY

Buy Price $15.14
Valuation $24.25
Closed down $1.39 at $16.46
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 9% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed up $.07 at $2.80
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 87%, BUY

Buy Price $1.09 (Was $1.20 before we doubled up)
Valuation $4.64 (Was $4.86, $4.00)
Closed up $.05 at 1.15
Earnings announced in June. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Up 6%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed up $.03 at $1.19
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Down 4%, BUY

Buy Price- $1.37
Valuation $4.89 (Was $6.02, $6.72, $5.49)
Closed up $.38 at $3.00
Next earnings due out Thursday, July 25^th after the market close.
Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:  “Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 119%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed up $.04 at $2.65
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
UP 1%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed up $.35 at $8.84
Next earnings due out Wednesday, July 31^st after the market close.
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 23%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $9.00 up $.20
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 5%  BUY

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed down $.09 at $5.44
Raging Capital filed a 13D/A last week showing sales of about 500,000 shares at prices from $4.96 to $5.68 lowering their stake to 6.6%.
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 36%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed up $.74 at $4.55
Earnings announced in June. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 50%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed down $.10 at $8.14 (including dividends)
Pays $.48 annual dividend.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 78%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $3.91 up $.33
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 23%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.14 up $.03
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 22%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.90 down $.10.
Wynnefield partners bought another 100,000 shares at $2.90 in the first week of July raising their stake to over 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 80%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.29.5 closed at $.27
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 7%. HOLD

No earnings last week.
Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

Last week we went 13 stocks up and 3 down. Since inception we are now 67 stocks up and 15 down for a 81.7% 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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%

Buy Price $11.80
Valuation $28.27
Closed up $.45 at $12.74
UP 8% BUY

Buy Price $15.14
Valuation $24.25
Closed up $.61 at $17.85
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 18% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed up $.16 at $2.73
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 82%, BUY

Buy Price $1.09 (Was $1.20 before we doubled up)
Valuation $4.64 (Was $4.86, $4.00)
Closed up $.14 at 1.10
Earnings announced in June. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Up 1%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed up $.07 at $1.16
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Down 12%, BUY

Buy Price- $1.37
Valuation $4.89 (Was $6.02, $6.72, $5.49)
Closed up $.21 at $2.62
Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:  “Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 91%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed down $.05 at $2.61
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
Down 1%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed up $.61 at $8.49
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 19%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $8.80 up $.30
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 2%  BUY

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed up $.33 at $5.53
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 35%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed down $.07 at $3.81
Earnings announced in June. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 28%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed up $.39 at $8.24 (including dividends)
Pays $.48 annual dividend.
Whoo-hoo! CCUR announced that they are doubling their current dividend to $.12 per quarter.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 80%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $3.58 up $.04
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 11%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.11 down $.03
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 24%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $3.00 up $.10.
Wynnefield partners bought another 100,000 shares at $2.90 in the first week of July raising their stake to over 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 86%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.30 closed at $.27
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 11%. HOLD

No earnings last week.

Check this list:

The DOW was up 1.5% last week, NASDAQ was up 2.2% and the Russell 3000 was up 1.8%. For the year, the DOW is up 15.5%, NASDAQ is up 15.2% and the Russell is up 14.9%.
QADA, DXM, DAEG, BLIN, MRVC, MITL, EXTR, GRVY and CBEY are our favorites.
Last week we went 9 stocks up and 7 down. Since inception we are now 66 stocks up and 16 down for a 80.5% 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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%
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 65 stocks that we closed out since 2006 (53 were winners) the average net gain was 30%

Buy Price $11.80
Valuation $28.27
Closed up $.81 at $12.29
UP 4% BUY

Buy Price $15.14
Valuation $24.25
Closed down $.33 at $17.24
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 14% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed up $.02 at $2.57
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 71%, BUY

Buy Price $1.09 (Was $1.20 before we doubled up)
Valuation $4.64 (Was $4.86, $4.00)
Closed down $.03 at $.96
Time to double up here.
Earnings announced in June. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Down 12%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed down $.11 at $1.09
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Down 12%, BUY

Buy Price- $1.37
Valuation $4.89 (Was $6.02, $6.72, $5.49)
Closed up $.08 at $2.41
Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:  “Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 76%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed up $.04 at $2.66
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
UP 2%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed up $.04 at $7.88
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 10%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $8.50 down $.35
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
Down 2%  BUY

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed up $.15 at $5.20
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 39%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed up $.04 at $3.88
Earnings announced in June. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 28%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed down $.16 at $7.85 (including dividends)
Pays $.48 annual dividend.
We have collected $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 71%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $3.54 up $.10
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 11%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.14 down $.03
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 22%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.90 up $.08.
Wynnefield partners bought another 33,000 shares at $2.69 past week raising their stake to around 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 80%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.29 closed at $.30
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 7%. HOLD

MITL and DAEG earnings last week.
Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

The DOW was up .7% last week, NASDAQ was up 1.4% and the Russell 3000 was up 1.1%. For the year, the DOW is up 13.8%, NASDAQ is up 12.7% and the Russell is up 11.8%.

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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%

For the 65 stocks that we closed out since 2006 (53 were winners) the average net gain was 30%

Buy Price $11.80
Valuation $28.27
Closed up $.05 at $11.48
Down 3% BUY

Buy Price $15.14
Valuation $24.25
Closed down $.18 at $17.57
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 16% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed down $.07 at $2.55
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 70%, BUY

Buy Price $1.20
NEW Valuation $4.86 (Was $4.86, $4.00)
Closed down $.07 at $.99
Time to double up here.
Earnings announced last week. Decent. Revenues fell to $9.77 million from $9.811 last year. Margins held at over 70% and net debt decreased to $12.22 million from $13.8 million last quarter. Non-GAAP earnings were $.04 versus a loss of $.03 last year. Our valuation fell from last quarter to $4.64. This is feeling like XRSC, it just needs the stock price to reflect it.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Down 18%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed up $.01 at $1.20
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Down 3%, BUY

Buy Price- $1.37
Valuation $4.89 (Was $6.02, $6.72, $5.49)
Closed up $.13 at $2.33
Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:  “Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 70%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed down $.20 at $2.62
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
EVEN, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed down $.16 at $7.84
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 9%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $8.85 up $.35
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 3%  BUY

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed up $.10 at $5.05
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 41%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
NEW Valuation $13.81 (Was $12.26, $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed up $.13 at $3.84
Earnings announced last week. Pretty good. Down from last year but they exceeded their guidance. Revenues were $150.9 million versus $157.6 million last year. On a Non-GAAP basis they made $.25 a share. For the year they made $.81 on a Non-GAAP basis. MITL is selling at 5X Non-GAAP earnings. Cheap. Our valuation rose to $13.81 a share.
UP 26%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed down $.02 at $8.01 (including dividends)
Pays $.48 annual dividend.
Whoo-hoo! CCUR announced that they are doubling their current dividend to $.12 per quarter.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 75%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $3.44 down $.09
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 8%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.17 down $.01
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 20%, BUY

As proven by OPTIO, patience is necessary with these stocks.

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.82 up $.13.
Wynnefield partners bought another 33,000 shares at $2.69 past week raising their stake to around 10%.
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 75%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.30 closed at $.30
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 11%. HOLD

No earnings last week. MITL and DAEG earnings due out this upcoming week.
Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

Last week we went 4 stocks up 10 down and 3 unchanged. Since inception we are now 65 stocks up and 17 down for a 79.3% 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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2%
2013-AGYS +41%
2013-DRIV+31%

For the 65 stocks that we closed out since 2006 (53 were winners) the average net gain was 30%

Buy Price $11.80
Valuation $28.27
Closed down $.51 at $11.43
Down 3% BUY

Buy Price $15.14
Valuation $24.25
Closed down $.47 at $17.75
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 17% BUY

Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed up $.03 at $2.62
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 75%, HOLD

Buy Price $1.20
Valuation $4.86 (Was $4.00)
Closed down $.09 at $1.06
Next earnings due out Tuesday, June 25^th after the market closes.
Earnings announced in March. Not bad. Sales fell from $11.1 last year to $10.4 million, but they were up slightly from last quarters $10.35 million. Gross margins were up to over 70% and net debt decreased to $13.8 million from $14.5 million last quarter. Non-GAAP earnings were $449,000 versus $252,000 last quarter. Our valuation spiked to $4.86 per share up 20% from last quarter.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Down 12%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed down $.09 at $1.19
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
Down 4%, BUY

Buy Price- $1.37
Valuation $4.89 (Was $6.02, $6.72, $5.49)
Closed down $.06 at $2.20
Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:  “Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 61%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed up $.01 at $2.82
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
UP 8%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed down $.38 at $8.00
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 12%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $8.50 down $.41
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
Down 1%  BUY

Buy Price-$8.49
Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed down $.04 at $4.95
Earnings announced in June. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 42%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $12.26 (Was $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed down $.23 at $3.71
Next earnings due out Monday, June 24^th after the market close.
In addition to refinancing their debt out to 2019-2020, MITL announced earnings in February. Revenues were down to $142 million from $150.5 million last year and Non-GAAP net income was $.23 a share versus $.21 a share last year. Our valuation fell a bit to $12.26 a share-still more that 3X the current price.
UP 22%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed down $.29 at $8.03 (including dividends)
Pays $.48 annual dividend.
Whoo-hoo! CCUR announced that they are doubling their current dividend to $.12 per quarter.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 75%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $3.53 unchanged
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 11%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.18 up $.01
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 19%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.69 unchanged
Earnings announced in June. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 67%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.30 closed at $.28
Interestingly, Veramark another tiny telecom software company that we have long followed was recently being bought for $1.18 a share. Our valuation on it was $1.66. This offer was received after an initial offer of $.98. So it finally went for 71% of our valuation. CTIG would need to sell for $.76 a share to be equivalent.
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 11%. HOLD

While still well below our valuation, we are taking profits on this one. Just nervous about the market.

Finally, a good week—up 4.8%. We are now up 16.9% for the year.
ARIS and SIGM earnings last week.
Some of our stocks are just stupid cheap—compared to their net cash on hand per share divided by their stock price.
Check this list:

QADA, DXM, DAEG, BLIN, MRVC, MITL, EXTR, GRVY and CBEY are our favorites.
Last week we went 10 stocks up 5 down and 2 unchanged. Since inception we are now 68 stocks up and 14 down for an 82.9% 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% (fourth trip on this)
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% (third trip)
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%
2012-TISA +137%
2012-PTIX -44%
2012-MTSL +157%
2012-LTUS -98% No more Chinese stocks for us
2012-AEZS -63%  a bad speculation.
2012-RIMG -46% (including dividends)
2012-HPOL +34% (4^th trip)
2012-MEDW +133% (Buyout 1 week AFTER we sold this)
2012-SPNC +118%
2012-RWWI +1%
2012-MOTR -29% (lost biggest customer contract)
2013-INUV -83% Held this since 2007. Failed business model.
2013-ASTX-+40%
2013-MGCD-+79%
2013-LXK +2
2013-AGYS +41%
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 65 stocks that we closed out since 2006 (53 were winners) the average net gain was 30%

Buy Price $11.80
Valuation $28.27
Closed up $.29 at $11.94
UP 1% BUY

Buy Price $15.14
Valuation $24.25
Closed up $1.22 at $18.22
Paulson & Co, filed a Form 13D on 5/10/2013 disclosing a 10.9% stake. They have held this stake since before the bankruptcy and merger. Then on May 14^th, they filed a 13D/A disclosing another 350,000 share buy at prices up to $17.07 bringing their stake to 13%.
Up 20% BUY

XRS Inc. (NASDAQ-XRSC)-Recommended 2/26/2013)
Buy Price $1.50
Valuation $6.79 ( Was, $6.50)
Closed up $.42 at $2.59
Earnings announced in May. Pretty good. Although revenues were down to $14.5 million from $15.9 million last year, they were up from $14.2 million last year. More importantly Non-GAAP earnings were $2.2 million compared to $.2 million last year. For the six month period, Non-GAAP earnings were $4.4 million or $.16 per share. Our valuation climbed to $6.79 per share.
UP 73%, BUY

Buy Price $14.20
Valuation $35.57 (Was $34.59, $32.20)
Closed up $.22 at $17.92
Earnings announced in May. Pretty good, but tempered by weak guidance. Sales were up 11% (including the LML acquisition) and they made $.33 a share on a Non-GAAP basis, up 10% YOY. Guidance for next quarter was revenue of $89-$92 million and Non-GAAP EPS of $.01 to $.04 per share. Full year guidance is $.55-$.65 a share in Non-GAAP earnings. Net cash rose to $9.49 per share. Our valuation rose to $35.57 but will likely fall to around $30 a share based on the guidance—still double the current market price.
UP 26%, BUY

Buy Price $1.20
Valuation $4.86 (Was $4.00)
Closed down $.01 at $1.15
Next earnings due out Tuesday, June 25^th after the market closes.
Earnings announced in March. Not bad. Sales fell from $11.1 last year to $10.4 million, but they were up slightly from last quarters $10.35 million. Gross margins were up to over 70% and net debt decreased to $13.8 million from $14.5 million last quarter. Non-GAAP earnings were $449,000 versus $252,000 last quarter. Our valuation spiked to $4.86 per share up 20% from last quarter.
Looks like BlueLine Partners (a “strategic opportunities fund”) have shaken up Daegis management in January with the ouster or the CEO and CFO. The interim CEO and Chairman of the Board is a BlueLine founder. Its feeling like they are not happy with the current stock price for sure.
Down 4%, BUY

Buy Price $1.24
Valuation $2.19 (Was $2.35, $2.56, $2.24)
Closed up $.27 at $1.28
Earnings announced in May. Not great on the surface but all still looks good for BLIN going forward. Revenues fell to $6 million from $6.7 million last year and they lost $.03 a share on a Non-GAAP basis versus a $.01 profit last year. iAPPS revenue was 78% of sales up 9% from last year, recurring revenue was up 30% to $1.3 million. They also lowered their guidance for 2013 to revenue of $25-$26 million from $27 to $28 million. It looks like the reason for this is that their average deal size had doubled and it takes longer to deploy their software—which stretches out the revenue recognition period. We would recommend reading the conference call transcript where they give great detail on the business and forecast. Our valuation fell to $2.19 per share, but we still like the prospects here. It looks a bit like HSTM.
UP 3%, BUY

Telecommunications Systems Inc. (NASDAQ-TSYS)-Recommended 6/14/2012)
Buy Price- $1.37
Valuation $4.89 (Was $6.02, $6.72, $5.49)
Closed unchanged at $2.26
Earnings announced in May. So-So. Revenues fell 5% to $95 million and they made $2.1 million of adjusted net income versus $3.2 million last year. Guidance was limited to the following quote:  “Our first quarter results were consistent with our expectations, as we worked to set the stage for another strong second half,”. We’ll see. Our valuation fell substantially from $6.02 to $4.89 on lower sales and higher net debt compared to last year.
Carlo Cannell, an activist investor filled a 13D in September 2012 pointing out how undervalued TSYS is and urged them to put themselves on the block. He points to a valuation done on the company as of August 29th of $7.40 to $11.81 a share. Even the low point here is higher than our valuation.
UP 65%, HOLD

Buy Price- $2.62
Valuation $9.31 (Was $10.28. $9.03, $9.37, $8.85, $8.31)
Closed down $.12 at $2.81
Earnings announced in May. Decent we think, but we were the only one. Revenues were $118 million compared to $112 million last year, gross margins were 29.1% and they made $1.2 million on a Non-GAAP basis versus $2.2 million last year. The current quarter included a $1.1 million inventory write-off for a bankrupt customer. Net cash per share was $1.38.
Their book-to-bill ratio was less than 1 this past quarter leading them to give next quarter guidance of $105 to $115 million in revenues and Non-GAAP income of $0 to $.03 per share. Not setting the world on fire, but doing ok. Our valuation fell from the huge prior quarter to $9.31—a $1 a share more than when we recommended AVNW.
Penn Capital Mgmt. filed a 13G in late February disclosing a 6.05% stake.
Dimension Fund filed a Form 13G in February disclosing a 5.3% stake, Vanguard disclosed a 5.67% stake and Blue Mountain has been buying more and is now up to a 5.90% stake.
UP 7%, BUY

Buy Price $7.17 ( Was $7.94 before another $10,000 added at $6.53)
Valuation $28.24 (Was $28.33, $29.04, $29.59, $29.58, $29.21)
Closed down $.04 at $8.38
Earnings announced in May. OK.  Revenue fell from $124 million to $120 million, adjusted EBITDA fell from $23 million to $21 million and they lost $600,000 compared to a $1,200,000 loss last year. Our valuation fell a few pennies to $28.24.
Guidance for 2013 was unchanged- revenues of $475-$485 million, adjusted EBITDA of $75-$82 million and free cash flow of $15-$20 million.
Penn Capital Mgmt. filed a 13G in late February disclosing a 5.55% stake.
$80 million of EBITDA, $.68 a share in net cash and a $230 market cap. Cheap.
UP 17%, BUY

Valuation $27.15 (Was $31.80, $34.60, $28.60, $41.20, $43.20 (after $9.50, $6.00 and $1.40 special dividends), $52.40, $55.80)
Buy Price October 7, 2011- $8.50 ($25.40 before special dividends)
Closed at $8.91 down $.09
Earnings announced in April. Not bad, but not great. Sales were $46 million up slightly from $44.7 last year. They lost $3.1 million pre-tax which included $1.6 million of litigation costs and $400,000 of share based compensation (vapor cost). Net cash was $4.59 per share and our valuation was $27.15.
Lloyd Miller disclosed a 6.9% stake in February.
The 20 for 1 stock split happened in December, so all the share information has been adjusted.
Raging Capital bought another 1.6 million shares in the first week of December at $10.80 bringing their holdings to 20.1% of the company.
Still trading at less than ½ our valuation.
UP 4%  BUY

Buy Price-$8.49
NEW Valuation $11.86 (Was $8.24, $13.05, $10.67, $8.41 $12.10, $13.40, $16.02)
Closed down $.11 at $4.99
Earnings announced last week. At least they did what they said they would do. Revenues were $52.5 million up 31% over last year and they made a penny on a Non-GAAP basis compared to a loss of $.26 last year. Cash rose to $87 million or $2.57 a share and our valuation rose to $11.86.
Guidance from their press release:
“Moving into the second quarter of fiscal 2014, we believe revenue will be in the range of $52.0 to $54.0 million,” Mr. Tran continued. “We expect to see revenue increases in most of our target markets along with a steady non-GAAP gross margin between a range of 52% and 53% driven by higher margin product mix and continued worldwide cost savings. In addition, we expect our non-GAAP operating expenses in the second quarter of fiscal 2014 to be lower compared to the first quarter of fiscal 2014,” said Mr. Tran.
Raging Capital filed a 13D/A in May disclosing the purchase of another 350,000 shares at prices up to $4.68 a share, bringing their holding to 8.1% of the company.
We will be watching this one very closely and may sell at any time.
Down 41%, HOLD

Buy Price- $3.04( Was $3.36 before $10,000 added, $3.95 before $10,000 added)
Valuation $12.26 (Was $13.10, $10.92, $13.92, $12.81, $15.28, $14.04, $10.39)
Closed up $.27 at $3.94
Next earnings due out Monday, June 24^th after the market close.
In addition to refinancing their debt out to 2019-2020, MITL announced earnings in February. Revenues were down to $142 million from $150.5 million last year and Non-GAAP net income was $.23 a share versus $.21 a share last year. Our valuation fell a bit to $12.26 a share-still more that 3X the current price.
UP 30%, BUY

Buy Price-$4.58 (Was $5.08 before $.50 special dividend)
Valuation $16.26 (was $16.20, $15.37, $13.53, $15.85, $14.13, $11.38, $14.04, $18.54, $15.99)
Closed up $.33 at $8.32 (including dividends)
Pays $.48 annual dividend.
Whoo-hoo! CCUR announced that they are doubling their current dividend to $.12 per quarter.
We have collected (or will soon collect) $.36 in dividends so far (excluding the $.50 special dividend which reduced our basis).
Earnings announced in April. Pretty good we think. Revenues were $16.9 million, up from $16.3 million last year. They had a profit of $937,000 ($.11 per share) versus $337,000 last year. Net cash was $2.52 a share and our valuation rose to $16.26 per share.
Singer/Miller duo own 12.1% of CCUR.
UP 82%, HOLD

Buy Price-$3.18 (Was $3.04 before adding another $10,000)
Valuation-$6.58 (was $6.99, $6.97, $7.46, $6.31, $7.01, $6.72, $6.45, $5.67, $7.36, $7.23, $7.31, $6.82, $6.81)
Closed at $3.53 up $.06
Earnings announced in April. Not bad. Revenues were $68.2 million down 7% from last year. They lost $2.2 million versus a profit of $2.4 million last year. On a Non-GAAP basis they made $3.3 million versus making $3.8 million last year. Net cash was $189 million or $2.03 per share.
Guidance for next quarter is revenue of $73-$77 million of revenue and Non-GAAP net income of $4-$7 million. Our valuation fell to $6.58 per share, double the current price.
Vanguard filed a Form 13G in March disclosing a 5.21% stake, Wellington disclosed a 6.3% stake and Soros upped his holdings to 9.85%..
Starboard owns 8.8% and Blackrock owns 5.4% of EXTR.
UP 11%, BUY

Buy Price- $1.45 per ADS (Was $1.68 before double up)
Valuation $4.14-(Was $3.65, $3.41, $5.52, $5.00, $5.39, $5.33, $5.61, $5.73, $4.38, $4.44, $5.15)
Closed at $1.17 up $.04
Gravity reported their Q1 results on May. Revenues were down YOY by 28% to $10.8 million and they lost $1.5 million or $.21 per share. By far the worst results since we have owned GRVY. Cash per share fell to $1.69 ($47 million). Not much good news to report although it looks like Rangarok Online is doing OK in Korea and they re-launched it in China in February.
Still trading below cash value, but operations are not looking robust at all. We may have to dump this one, but will hold on for a bit longer to see if they can turn things around. It would be a shame to have to sell this below their cash value.
Down 20%, BUY

Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up),
NEW Valuation $6.41 (was $6.14, $5.97, $6.21, $6.13, $5.82, $5.81, $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 $2.69 up $.18
Earnings announced last week. Looking good. Revenues were up 44% to $8.2 million, gross margins remained steady at 77% and although they reported a pre-tax loss of $1.3 million, after you back out the loss on the debt repayment and an asset write-off , they only lost $200k. How much of this was integration costs are not known. They are projecting a return to profitability next quarter and increasing profitability as the integration activity goes on over the next year. Recurring revenue was 93% of total revenue.
If ARI can grow continue to grow their revenue and profits over the next couple of quarters, we think the stock price could approach our valuation. 
Wynnefield Partners filed a 13D/A in April disclosing purchasing another 50,000 shares at $2.50, and now have a 9.95% stake (1.2 million shares) in ARI.
UP 67%, HOLD, Still a Huge valuation gap here.

Buy price $.27 ask,
Valuation $1.07 (Was $1.14, $1.17, $1.34, $1.34, $1.37, $1.36, $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 $.30 closed at $.30
CTIG announced in June that they had hired Duff and Phelps as their independent financial advisor. Guess the Board decided they need to get a fairness opinion to keep down the damages on the lawsuit.
Earnings announced in May. Not good, but I expected worse given they are trying to buy out the company on the cheap. Revenues were $3.885 million versus $.368 million last year. Gross margins held firm at 73%, but they lost $443,000 compared to a profit of $25,000 last year. Cash per share fell to $.06 and our valuation dropped to $1.07—still triple the current trading price.
Birbeck and Fairford Holdings made a non-binding offer to buy CTIG in March for $.29 a share. The company formed a special committee to evaluate the offer. Hopefully they will find somebody else who will pay fair value—or at least close to it.
UP 11%. HOLD