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

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

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

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

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

Since inception we have closed out the following positions:

2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)

The model portfolio assumes $10,000 invested in each stock (unless we double-up–then it is $20,000), less $10 commission each way (TD Ameritrade rate).

For the 11 stocks that we have closed out in 2006 and 2007 the average gain was 33%. We are tired of watching our stocks go up–and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 7 positions in 2007 compared to 4 in all of 2006.

OPTIO earnings. Not much other news to spreak of.

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

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

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

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

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

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.65 up $.31.
No news.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 4%. BUY

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

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

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

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

OB-abies (Bulletin Board Listed Stocks)

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

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.50, up $.05.
No news
Now down 7%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.10, up $.02.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
Lion management has announced the formation of a “Strategic Review Committee” to explore the sale of the company or parts of the company. They said that they has received “preliminary” and “conditional” indications of interest from parties interested in acquiring “portions of the company”. Hopefully something will happen here.
Down 57%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, NEW Valuation $2.34 (was $2.28, $2.89, $2.89, $2.54 and 2.88)
Closed at $1.40, down $.12.
Announced earnings 2 weeks ago. Not great, but our valuation moved up to $2.34. They are still losing money, and cash is declining.
Has cash of $.38 per share–27% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the “Strategic Alternatives” related to their Healthcare software division. In other words, a “for sale” sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this “division”, so there is no way for us to determine what this could mean from a valuation standpoint.
It has been over 2 months now since their announcement–We would expect to hear an update soon. They said in their latest earnings release that their healthcare business exceeded their goals. They better gat a good price for this.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent profit numbers, or they get a good deal on the Healthcare “division”.
Up 12% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.85, down $.05.
Earnings on 9/28 before the market opens.
AVSO announced a restructuring in late July that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting “significantly” better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 26% of our valuation. Just too CHEAP.
Now down 14%. BUY.

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

What a lousy week in the market.

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

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

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

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

Since inception we have closed out the following positions:

2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007-DTLK +25% (2 weeks)
2007-PDLI + 3% (Waited too long to sell)

The model portfolio assumes $10,000 invested in each stock (unless we double-up–then it is $20,000), less $10 commission each way (TD Ameritrade rate).

For the 11 stocks that we have closed out in 2006 and 2007 the average gain was 33%. We are tired of watching our stocks go up–and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 7 positions in 2007 compared to 4 in all of 2006.

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

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

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

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

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

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

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

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.34 down $.20 for the week.
No news.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 6%. BUY

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

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

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

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

OB-abies (Bulletin Board Listed Stocks)

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

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.45, up $.07 last week.
No news
Now down 10%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.08, down another $.02 last week.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
Lion management has announced the formation of a “Strategic Review Committee” to explore the sale of the company or parts of the company. They said that they has received “preliminary” and “conditional” indications of interest from parties interested in acquiring “portions of the company”. Hopefully something will happen here.
Down 65%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.52, down $.10 last week.
Has cash of $.44 per share–29% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the “Strategic Alternatives” related to their Healthcare software division. In other words, a “for sale” sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this “division”, so there is no way for us to determine what this could mean from a valuation standpoint.
It has been over 2 months now since their announcement–We would expect to hear an update soon.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare “division”.
No news.
Up 22% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added), Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.90, down $.10 last week.
AVSO announced a restructuring in late July that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting “significantly” better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 28% of our valuation. Just too CHEAP.
Now down 9%. BUY.

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

MEDW announced earnings this morning and they were decent. Sales were up 14% to $10.4 million. Net income was down from $561,000 to $426,000, or $.06 per share compared $.07 per share. Our valuation dropped a bit to $12.90. Still MEDW is only trading at 55% of our valuation, has $2.70 a share in cash. Still a BUY in our book.

Rather than wait for the $20 “barrier”. We are dumping this one now, for a measely 3% gain. But at least not a loss.

Last week we went 6 up, 7 down and 1 even. Our biggest DOGS are: LINN.ob, BDR, PARL, and ARIS,ob, all down more than 10%. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +1.6%,+14.0% and +31.5% respectively. Since inception we are now 20 stocks up and 6 down (2 of which are down less than 5%).

We were up 1.6% this past week and are now up 14.0% so far in 2007. The DOW, NASDAQ and the S+P 500 were mixed, with results ranging from -.4% (S+P 500) to +.8% (NASDAQ) last week. The Dow is up 7.2%, NASDAQ is up 7.5% and the S+P 500 is up 3.9% for the year.

Our OB-abies contine to lag, although AVSO.ob was up 25% last week. BDR and LINN.ob are the weakest companies fundamentally and we are looking for an economic exit on these two. The rest of our stocks are looking good, in our opinion.

We are now up about 2 times the DOW, 1.9 times the NASDAQ and over 3 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up between 3.75% and 4.1% for the year.

Since inception we have closed out the following positions:

2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007 DTLK +25% (2 weeks)

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 10 stocks that we have closed out in 2006 and 2007 the average gain was 35%. We are tired of watching our stocks go up–and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 6 positions in 2007 compared to 4 in all of 2006.

News on PDLI last week unfortunately.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.30 to $14.73 last week.
Short Interest fell 21% to 4.5 million at August 15th.
We still think $18-$20 is in the cards for this year.
Guidance has not been updated yet for the TURBO Booster.
Now up 38% so far. HOLD.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, NEW Valuation $12.84 (was $11.27, $15.92, $13.69, $13.73 and $11.86)
Closed at $8.14, down $.02.
No news.
Up 18% so far. BUY.

PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation–maybe $25
Closed at $19.51, down $4.36 last week.
Bad news as we noted earlier in the week. With their lead, self-developed product Nuvion in the trash can, the big upside on PDL is gone in our opinion. Too much uncertainty here for us. We think it is still worth a bit North of $25 a share, but at 80% of our value estimate, it is not worth the risk.
Now up 1%. SELL at $20 or more.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $4.64, down $.12 for the week.
Not much action here lately. Hopefully this quarter results will build on the last one and DWCH will get noticed again.
DWCH is now trading at 50% of our valuation.
Now up 45%. BUY.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $9.20 (Was $8.63, $13.77)
PARL closed at $3.76, up $.15 last week.
Another decent quarter and we should be back in the black on this one.
New management needs to keep moving this company is the right direction.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 21%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.26 down $.04 for the week.
BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up. As we mentioned above, we are looking to get back to even on this one and get out, even though the valuation is compelling.
Trading at 29% of our valuation.
Down 31%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.54 up $.40 for the week.
No news.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 5%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Down $.40 to $8.83 last week.
Stephen Roseman (Director) now has 627,728 shares or 7.9% of the company after steady buying all this year.
With the insider buying and discount to our valuation, we like this stock alot.
No news.
Up .1%. BUY on dips below $9.00 (like NOW).

Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.67, (was $6.98 after double up ($10,000 added) Valuation $13.40
Up $.18 to $6.98 last week.
Earnings due out Wednesday Sept. 5th before the market opens.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Up 5%. BUY

Cimatron (CIMT-Recommended 8/12/2007
Buy Price $2.12, Valuation $7.53
Up $.06 to $2.17 last week.
No news.
Up 2%. BUY

Candela Corp. (CLZR-Recommended 8/30/2007
Buy Price $7.26, Valuation $11.51
Down $.04 since our recommendation last week.
FDA approval, decent market, and it continued its downward move.
Hit 2 year lows last week.
Down .6%. BUY

OB-abies (Bulletin Board Listed Stocks)

Except for ARIS.ob, our OB-abies, showed a little life last week with OPTIO.ob, AVSO.ob and CTI.ob all moving up.

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.38, down $.12 last week.
No news
Now down 14%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.10, unchanged last week.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
Lion management has announced the formation of a “Strategic Review Committee” to explore the sale of the company or parts of the company. They said that they has received “preliminary” and “conditional” indications of interest from parties interested in acquiring “portions of the company”. Hopefully something will happen here.
Down 57%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.62, up $.01 last week.
Has cash of $.44 per share–27% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the “Strategic Alternatives” related to their Healthcare software division. In other words, a “for sale” sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this “division”, so there is no way for us to determine what this could mean from a valuation standpoint.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare “division”.
No news.
Up 30% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added),Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $1.00, up $.20 last week.
Finally! An up week. It has been a long time.
AVSO announced a restructuring last month that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting “significantly” better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 25% of our valuation. Just too CHEAP.
Now up 1%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.38 (Was $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price moved up $.03 at $.39. Closed at $.34.
This is still trading at only 30% of our latest valuation, but we still have to until the VOIP business stops losing money, we are not buyers–yet.
Up 44% based on the ASK price. HOLD

Candela Corporation, (NASDAQ–CLZR)
Valuation-$11.51
Price August 30, 2007-$7.26

This one continues to fall despite an FDA product approval this week and a share buy-back recently announced. Trading at just over 1 times annual sales.

With $2.10 a share in cash (29% of the market cap), 50% margins, a recent FDA approval, a 2.3 million share buy-back, we think this is a good bet for a turnaround.

The daily trading volume has been nearly 236,000 shares.

We think anything under $7.30 is a good price.

CLZR is trading at 63% of our valuation. Pretty cheap for a “medical” company.

About Candela:
Candela Corporation manufactures, and distributes innovative clinical solutions that enable physicians, surgeons, and personal care practitioners to treat selected cosmetic and medical conditions using lasers, aesthetic laser systems, and other advanced technologies. Founded near Boston in 1970, the company markets and services its products in over 70 countries from offices and distributors in the United States, Europe, Japan, China and other Asian locations. Candela established the aesthetic laser market 18 years ago, and currently has an installed base of an estimated 10,000 lasers worldwide. Visit Candela on the Web at http://www.candelalaser.com.

Well Third Point has forced a shake-up at PDL. CEO resigning, selling their commercial products/assets, going back to their knitting–product development. Only bad thing was the announcement that Nuvion was no good. Stock obviously got hammered yesterday–down $5 to $18.80, below our original buy price of $19.31.

The value here has diminished. We think it is still worth $25-$30 to a buyer.

Third Point is pressing the sale of the whole company, not just a part of it and the Chairman’s (Gage) resignation.

We will hold and look for an exit above our buy price (just hate to lose money). So if you see $20–sell PDLI.

Last week we went 10 up, 4 down and 1 even. Our biggest DOGS are: LINN.ob, BDR, PARL, AVSO,ob, ILOG, ARIS.ob and CIMT. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is +3.2%,+12.4% and +29.7% respectively. Since inception we are now 18 stocks up and 7 down (3 of which are down less than 10%).

We were up 3.2% this past week and are now up 12.40% so far in 2007. The DOW, NASDAQ and the S+P 500 were all up, with gains ranging from 2.3% (DOW) to 2.9% (NASDAQ) last week, and are all now up from 4.3% (S+P 500) to 7.4% (DOW) for the year.

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

We are now up about 1.7 times the DOW, 1.9 times the NASDAQ and 3 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up between 4 and 4.5% for the year.

Since inception we have closed out the following positions:

2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007 DTLK +25% (2 weeks)

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 10 stocks that we have closed out in 2006 and 2007 the average gain was 35%. We are tired of watching our stocks go up–and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 6 positions in 2007 compared to 4 in all of 2006.

Earnings on QADI last week.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.51 to $14.43 last week.
Short Interest was 5.7 million at July 13th.
Looks like Montgomery upped their price target to $17 and Citigroup upped theirs to $19. Momentum is building while the shorts continue to sell into all this upward force.
We still think $18-$20 is in the cards for this year.
Guidance has not been updated yet for the TURBO Booster. If this market didn’t stink so bad, helping to bail the shorts out, I think we would be North of $15 (and we were for a little while at least).
Now up 36% so far. HOLD.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, NEW Valuation $12.84 (was $11.27, $15.92, $13.69, $13.73 and $11.86)
Closed at $8.16, down $.31.
QAD announced earnings on Thursday. Pretty good in our opinion. Our valuation moved up to $12.84 from $11.27 (+14%) and was a hair off from rising to $14.80. Sales were up 10%, but apparently they missed their “earnings target”, so some people were disappointed. Not us.
Up 18% so far. BUY.

PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $23.87, up $2.71 last week.
Over the long haul (years) we like this stock, but right now the play is a sale of the company due to Third Points involvement.
Activist investment firm Third Point LLC, owns 11.2 million shares or 9.7% of the company and has more than $200 million invested. They continue to exert pressure on PDL to improve shareholder value.
If this reaches $30 in 2007, without a buy-out, we would sell.
Now up 24%. HOLD.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $4.76, down $.26 for the week.
DWCH is now trading at 51% of our valuation. We will look to buy some more of this next week.
Now up 48%. BUY.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $4.78 (was $6.12 before another $10,000 added, $6.65 before double up), Valuation $9.20 (Was $8.63, $13.77)
PARL closed at $3.61, up $.25 last week.
Starting to see some insider buying here at $3.40 to $3.50, which is a good sign that maybe we are on the way up.
New management needs to keep moving this company is the right direction.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 25%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.30 up $.03 for the week.
BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up. As we mentioned above, we are looking to get back to even on this one and get out, even though the valuation is compelling.
Trading at 30% of our valuation.
Down 29%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.08 (was $12.92 before another $10,000 added, $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $11.14 up $.44 for the week.
No news.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 8%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Up $.23 to $9.23 last week.
Stephen Roseman (Director) now has 627,728 shares or 7.9% of the company after steady buying all this year.
With the insider buying and discount to our valuation, we like this stock alot.
Up 5%. BUY on dips below $9.00

Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.98, (was $6.98 after double up ($10,000 added) Valuation $13.40
Up $.43 to $6.80 last week.
Earnings due out Wednesday Sept. 5th before the market opens.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Up 2%. BUY

Cimatron (CIMT-Recommended 8/12/2007
Buy Price $2.12, Valuation $7.53
Up $.09 to $2.11 last week.
No news.
Down .5%. BUY

OB-abies (Bulletin Board Listed Stocks)

Nobody is liking our OB-abies lately (except maybe OPTIO). Just not their “time” yet. Patience.

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.61 (Was $1.78 before another $10,000 added, was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.50, up $.09 last week.
No news
Now down 7%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.10, down another $.02 last week.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
Lion management has announced the formation of a “Strategic Review Committee” to explore the sale of the company or parts of the company. They said that they has received “preliminary” and “conditional” indications of interest from parties interested in acquiring “portions of the company”. Hopefully something will happen here.
Down 57%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.61, up $.04 last week.
Has cash of $.44 per share–27% of the market cap.
In late June, OPTIO announced they had hired an investment banker to help them review the “Strategic Alternatives” related to their Healthcare software division. In other words, a “for sale” sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this “division”, so there is no way for us to determine what this could mean from a valuation standpoint.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare “division”.
No news.
Up 29% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $.99 (was $1.19 before double up ($10,000 added),Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.80, down $.05 last week.
AVSO announced a restructuring last month that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting “significantly” better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 25% of our valuation. Just too CHEAP.
Now down 19%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, Valuation $1.38 (Was $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price was unchanged at $.36. Closed at $.35.
This is still trading at only 26% of our latest valuation, but we still have to until the VOIP business stops losing money, we are not buyers–yet.
Up 33% based on the ASK price. HOLD

Last week we went 3 up, 11 down and 1 even. Our biggest DOGS are: LINN.ob,PARL, BDR, AVSO.ob, ARIS.ob, ILOG, MEDW and CIMT. For the week, 2007 year-to-date, and since we started this Blog in January 2006, our model portfolio is -7.8%,+9.2% and +26.0% respectively. Since inception we are now 17 stocks up and 8 down (1 of which is down less than 10%).

We were down a whopping 7.8% this past week and are now up 9.2% so far in 2007. The DOW, NASDAQ and the S+P 500 were all down, with losses ranging from .6% (S+P500) to 1.6% (NASDAQ) last week, and are all now up from 1.9% (S+P 500) to 4.9% (DOW) for the year.

Our OB-abies mostly got nailed along with BDR and ILOG as investors fled the market and ran to big-cap, liquid names. BDR and LINN.ob are the weakest companies fundamentally and we are looking for an economic exit on these two. The rest of our stocks are looking good, in our opinion.

We are now up about than double the DOW, triple NASDAQ and 5 times the S+P 500 averages in 2007. The Russell 3000 and the Wilshire 5000 are both up between 1 and 2% for the year.

Since inception we have closed out the following positions:

2006-NTCT +44%
2006-ONXS +11% (Buyout offer)
2006-DTLK +41%
2006-CAW +21% (Buyout offer)
2007-IYXI.ob +44% (Buyout offer)
2007-MOBI +47% (Buyout offer)
2007-INFT +11% (Buyout offer)
2007-RITT +62%
2007-MIVA +55%
2007 DTLK +25% (2 weeks)

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 10 stocks that we have closed out in 2006 and 2007 the average gain was 35%. We are tired of watching our stocks go up–and then down. So we are planning to take profits a bit sooner than in 2006. We have already closed out 6 positions in 2007 compared to 4 in all of 2006.

Earnings on PARL, CTIG.ob and LINN.ob last week.

Spectranetics (SPNC-Recommended 9/2/2006)
Buy price $10.65, Valuation $18-$20
Up $.08 to $13.92 last week.
Short Interest was 5.7 million at July 13th.
We jumped to $14.50 on Friday, but couldn’t hold. There is definitely a lot of buying interest here, but also people dealing with margin calls on other stocks, the persistent short-sellers and people just trying to take some gains amidst the carnage out there.
We still think $18-$20 is in the cards for this year.
Guidance has not been updated yet for the TURBO Booster. If this market didn’t stink so bad, helping to bail the shorts out, I think we would be North of $15 (and we were for a little while at least).
Now up 31% so far. HOLD.

QAD Inc. (QADI-Recommended 6/14/2006)
Buy price $6.93, Valuation $11.27 (was $15.92, $13.69, $13.73 and $11.86)
Closed at $8.47, up $.11.
There seemed to be a fair amount of buying interest in QAD last week. Not sure why, but we will take it.
Our valuation has fallen from $15.92 to $11.27, but if they can hit their guidance for the year, the valuation would be approximately $14.60–75% above the current price. But since they seem to have trouble hitting their numbers–we will hold for now.
Earnings coming out Thursday, 8/23 after the close.
Up 22% so far. HOLD.

PDL BioPharma Inc. (PDLI-Recommended 5/21/2006)
Buy price $19.31, Valuation > $30
Closed at $21.16, even last week.
It was disclosed last week that the legendary George Soros has accumulated over 2 million shares in PDL. We like it when big money investors take a position in our companies.
Over the long haul (years) we like this stock, but right now the play is a sale of the company due to Third Points involvement.
Activist investment firm Third Point LLC, owns 11.2 million shares or 9.7% of the company and has more than $200 million invested. They continue to exert pressure on PDL to improve shareholder value.
If this reaches $30 in 2007, without a buy-out, we would sell.
Now up 10%. BUY.

DataWatch Corp. (DWCH-Recommended 2/12/2006)
Buy price $3.21 (averaged down from $3.66), Valuation $9.28 (was $9.20, $8.32, $7.50, $7.63, $9.31)
Closed at $5.02, down $.08 for the week.
DWCH is now trading at 54% of our valuation. We have been buying more in the $5 to $5.40 range. Bought some on Thursday at $5.00
Now up 56%. BUY.

Parlux Fragrances (PARL-Recommended 11/30/2006)
Buy price $6.12 (was $6.65 before double up), NEW Valuation $9.20 (Was $8.63, $13.77)
PARL closed at $3.36, up $.01 last week.
As we noted earlier in the week, PARL results last week seemed to show that maybe things are stabilizing and improving. Our valuation moved up 7% to $9.20 and PARL is trading at only 37% of our valuation.
We are adding another $10,000 increment to our investment here. This will lower our average cost to $4.78 per share.
New management needs to keep moving this company is the right direction.
The new management has 2.2 million reasons to make this stock go up. Glenn Nussdorf paid $6 for his shares.
No news.
Down 45%. BUY.

Blonder Tongue Laboratories (BDR-Recommended 3/4/2007)
Buy price $1.83, NEW Valuation $4.31 (was $4.01, $5.12, $5.88).
Closed at $1.27 down $.16 for the week.
BDR is still cheap in our opinion, but they need a decent quarter to get this stock moving up. As we mentioned above, we are looking to get back to even on this one and get out, even though the valuation is compelling.
Trading at 29% of our valuation.
Down 31%. HOLD

ILOG SA (ILOG-recommended 3/26/2007)
Buy price $12.92 (was $13.60 before double-up), Valuation $23.22 (was $20.99, $20.52)
Closed at $10.70 down $1.36 for the week.
We are adding another $10,000 to our investment here, which will lower our average cost to $12.08 per share.
For FY2008 they are projecting another 20% increase in sales and a tripling of operating income. They still have $2.95 a share in cash.
Down 17%. BUY

Celebrate Express (BDAY-recommended 4/17/2007
Buy Price $8.82, Valuation $17.85 (Was $18.18)
Down $.35 to $9.00 last week.
Stephen Roseman continues to buy BDAY. Another 8.700 shares at prices from $9.16 to $9.51 in August. Now has 627,728 shares or 7.9% of the company.
With the insider buying in the last couple of months, we like this stock alot.
Up 2%. BUY on dips below $9.00

Mediware (MEDW-Recommended 6/4/2007
Buy Price $6.98, Valuation $13.40
Down $.35 to $6.37 last week.
No news.
We are doubling up on MEDW–another $10,000 which will bring our average cost down to $6.66 per share.
Penninsula Capital owns 1.67 million shares or over 20% of MEDW. Not sure how they liguidate there stake profitably without a takeover
Down 9%. BUY

Cimatron (CIMT-Recommended 8/12/2007
Buy Price $2.12, Valuation $7.53
Down $.10 to $2.02 last week.
No news.
Bad week to recommend almost anything I think.
Down 5%. BUY

OB-abies (Bulletin Board Listed Stocks)

Nobody is liking our OB-abies lately (except maybe OPTIO). Just not their “time” yet. Patience.

ARI Networks (ARIS.ob-Recommended 8/19/2006)
Buy price $1.78 (was $2.06 before double up), Valuation $5.34 (was $5.03, $5.28, $5.28, $5.21)
Closed at $1.41, down $.26 last week.
Announced a deal with Triton last week–but sure didn’t help the stock price.
We are adding another $10,000 to our investment here, which will bring our average cost down to $1.61 per share.
Now down 21%. BUY. Still a Huge valuation gap here.

Lion Inc. (LINN.ob-Recommended 4/15/2006)
Buy price $.23 (was $.36 before double-up on investment), Valuation $.29 (was $.49, $.57, $.62, $.66 and before that $.79)
Closed at $.12, down another $.02 last week.
LINN continues to decline. Our valuation has dropped to $.29 as there business continues to deteriorate. They need to sell this thing quickly if they can.
This “stinker” has chopped over 10% off our 2007 performance all by itself.
Lion management has announced the formation of a “Strategic Review Committee” to explore the sale of the company or parts of the company. They said that they has received “preliminary” and “conditional” indications of interest from parties interested in acquiring “portions of the company”. Hopefully something will happen here.
Down 48%. Hold.

OPTIO Software Inc. (OPTO.ob-Recommended 3/22/2006)
Buy price $1.25, Valuation $2.28 (was $2.89, $2.89, $2.54 and 2.88)
Closed at $1.57, down $.05 last week.
Has cash of $.44 per share–28% of the market cap.
OPTO dropped as low as $1.35 last week. But there seems to be some decent buying interest in this OB-aby. Maybe a deal will happen soon?
In late June, OPTIO announced they had hired an investment banker to help them review the “Strategic Alternatives” related to their Healthcare software division. In other words, a “for sale” sign has gone up. Having been through their SEC filings, there appears to be no disclosure on the sales or operating results for this “division”, so there is no way for us to determine what this could mean from a valuation standpoint.
Still hoping we will see north of $2.00 this year–but may not happen now unless next quarter rebounds with some decent numbers, or they get a good deal on the Healthcare “division”.
No news.
Up 26% so far. HOLD.

Avatech Solutions Inc. (AVSO.ob-Bought November 28, 2005)
Buy price $1.19,Valuation $3.25 (was $3.29 $2.69, $3.36, $3.81)
Stock closed at $.85, down $.05 last week.
We are doubling up on AVSO (adding $10,000) which will bring our average cost down to $.99 per share.
AVSO announced a restructuring last month that is expected to save more than $2.5 million annually. They also narrowed their revenue guidance to between $50 and $51 million for 2007. They expect to lose money in Q4 (partly due to $500k in severance charges), but are projecting “significantly” better margins over recent results. They do not expect to lose money in FY 2008. We will wait to see this quarters results and any impact on our valuation.
Trading at 26% of our valuation. Just too CHEAP.
Now down 29%. BUY.

CTI Holdings (CTIG.ob-Recommended 2/25/2006)
Buy price $.27 ask, NEW Valuation $1.38 (Was $1.29, $1.42, $1.28 $1.13, $1.05, $.82)
Ask price fell $.02 last week to $.36. Closed at $.36.
As we wrote last week, CTI’s earning were pretty good and our valuation inched up to $1.38.
This is still trading at only 26% of our latest valuation, but we still have to until the VOIP business stops losing money, we are not buyers–yet.
Up 33% based on the ASK price. HOLD

All released earnings this afternoon.

Parlux cut their losses to about $100,000 for the quarter. Our valuation moved up from $8.66 to $9.20. Looking like things are stabilizing. Changing our view to a cautious BUY here at $3.31.

Lion continues to decline. Revenues fell and losses grew. Our valuation plummeted to $.29 from $.49. Our only hope here is that maybe someone will pay $10 million or so for their online assets and we can recoup our losses. HOLD.

CTI, revenues up big time (due to Ryder acquisition) and they actually made a profit,albeit a small one of $40,000. Still better than losing. Our valuation moved up again to $1.38 from $1.29. Their VOIP business continued to lose money ($500,000 or so)but their irregular IP enforcement activities made almost $300,000. Still, altough CTI is still only trading at only 28% of our valuation. We still need to see better results in the VOIP group before we will change to a buy from a HOLD.