Tuesday, April 22

Two new value ideas 04/22/14

to be completed 04/23 or 04/24, these are my finds, CIX and DWSN

CompX International Inc:  (CIX) : Price on 04/22/14 = $10.10

Dawson Geophysical Company (DWSN) : Price on 04/22/14 = $28.02

Thursday, April 17

7 value based nano cap ideas under $20M market cap, positive YOY revenue growth with strong BS

All with positive YOY revenue growth, strong BS.

This post was an initial attempt to find “cheap but good” stocks that recorded positive YOY revenue change, net asset cheap, below 20 million in market capitalization with stock price under performance versus the market.  There are more solid ideas under 20 million but the following ideas should get deep value nano cap investors something to look at or investors looking to hedge risk. I expect to more fully explore value based nano caps in future posts. Oops ... just noticed FSI does not have YOY positive revenue change.

TSR, Inc. (TSRI): provides contract computer programming services to commercial customers primarily in the New York metropolitan area, New England, and the Mid-Atlantic region. Services include technical staff on short-term or long-term basis. The company serves Fortune 1000 companies, founded in 1969.

Price per share = $3.40 , EV per share = 1.35, GP per share =  3.75, EV/GP = .36Cash Per Share:  2.13Qtrly Revenue YOY Growth:15.30%, 52-Week Change:  0.29% , % Held by Insiders: 52.85% ,% Held by Institutions: 8.30%,5 Year Average Dividend Yield: 8.60%

Clean capital structure with a long history of distrusting generous cash dividends to shareholders.1.50 per share in cash was distributed to shareholder December 2012. Nano cap value investors Zeff Capital still hold 158,965 shares

FlexibleSolutions International Inc. (FSI): environmental technology company involved in research, development and manufacturing of products that increase crop yield, improve oil and gas operations, reduce the environmental footprint in cleaning and water treatment, save water and save energy. Source Corporate Website

FSI offers HEATSAVR, a chemical product for use in swimming pools and spas that forms a thin and transparent layer on the water surface; ECOSAVR, a disposable dispenser designed for the residential pool and spa market; and WATERSAVR to reduce water evaporation in reservoirs, potable water storage tanks, livestock watering ponds, aqueducts, canals, and irrigation ditches, as well as for lawn and turf care, and potted and bedding plants. The company also offers WATERSAVR—BTI that combines evaporation control with an environmentally friendly method of killing mosquito larvae. In addition, it provides thermal polyaspartate biopolymers for oil fields to reduce scale and corrosion in various water systems; for the agricultural industry to reduce fertilizer crystallization before, during, and after application, as well as to prevent crystal formation between fertilizer and minerals present in the soil; for irrigation to prevent early plugging of drip irrigation ports, reduce maintenance costs, and lengthen the life of equipment; for detergents as a biodegradable substitute for poly-acrylic acid; and for use in personal care products, such as shampoo and cosmetic products. Flexible Solutions International Inc. was founded in 1991 and is headquartered in Victoria, Canada. Source Yahoo

Real estate owned…56,780 sq. ft. facility in Peru, Illinois used to manufacture TPA line of products as well as a building and 3.3 acres of land in Taber, Alberta, Canada.

Market Cap: 9.14M , Enterprise Value:  12.27M
Trailing P/E:5.03
Price/Sales: 0.55 , Price/Book: 0.76
Enterprise Value/Revenue 0.78 ,Enterprise Value/EBITDA: 18.90
Profit Margin (ttm):11.53% , Return on Equity (ttm): 17.15%
Qtrly Revenue Growth (yoy):    -10.80%
Gross Profit: 4.53M , Book Value Per Share: 0.87
52-Week Change:-28.45%
Shares Outstanding:13.17M , Float:  6.85M

% Held by Insiders:  47.93% , % Held by Institutions:  12.30%

April 11, 2014: "Sales were lower in Q1, 2014 than in Q1, 2013. Flexible Solutions’ top line revenue decreased from $4.50 million (Q1, ‘13) to $3.81 million (Q1, ‘14), down 15% year over year.The exceptional cold weather during the quarter reduced uptake by certain agricultural customers. We expect sales in Q2 will recover some of those missed in Q1."

Forward Industries Inc. (FORD): Forward Industries designs, markets, and distributes carry and protective solutions primarily for hand held electronic devices. The company offers carrying cases and other accessories for medical monitoring and diagnostic kits; and other portable electronic and non-electronic products, such as sporting and recreational products, bar code scanners, smartphones, GPS and location devices, tablets, and firearms. It also designs, markets, and distributes carry and protective solutions for hand held electronics devices, including soft-sided carrying cases, bags, clips, hand straps, protective plates, and other accessories made of leather, nylon, vinyl, plastic, PVC, and other synthetic materials. The company was founded in 1954 and is headquartered in West Palm Beach, Florida. Source Yahoo

Why to consider on a watch list…. Tiny profitable nano cap with strong financial position, 33% held by insiders (Yahoo source). No long term debt with cash per of share .80, GP per share .79, 52 Change -15.82%,Qtrly revenue growth (yoy): 20.70%

Data per Yahoo 04/18/14:
Market Cap: 13.52M, Enterprise Value:  7.28M
Enterprise Value/Revenue:0.23 ,Price/Sales:0.42, Price/Book: 1.38

Enterprise Value/EBITDA: 6.04 , Return on Assets: 4.76%
Qtrly Revenue Growth (yoy): 20.70% ,Gross Profit : 6.38M
EBITDA :  1.21M
Total Cash: 6.57M ,Total Cash Per Share : 0.80
Total Debt : 0.00 , Current Ratio (mrq):    3.07
Book Value Per Share:  1.19
52-Week Change: -15.82%
52-Week High: 2.14 , 52-Week Low:    1.41
Shares Outstanding: 8.20M , Float:  5.83M
% Held by Insiders:  33.08% , % Held by Institutions:  13.40%

Command Security Corp. (MOC): “provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation, and governmental customers in the United States. The company offers its security services to customers through Security division and Aviation Safeguards division. Its Security division provides armed and unarmed uniformed security personnel for access control, loss prevention, mobile patrols, traffic control, security console/system operators, and fire safety directors, as well as offers personnel for reception, concierge, and front desk/doorman operations. This division serves governmental, quasi-governmental and financial institutions, healthcare facilities, colleges and universities, residential communities, commercial real estate, industrial, distribution, logistics, and retail customers. The company’s Aviation Safeguards division provides a range of uniformed services for domestic and international air carriers, including security for airlines, aircraft, passengers, and cargo; and baggage screening, wheelchair escort services, special escort services, and skycap services. This division serves 100 domestic and international airlines, airports, airport authorities, and the general aviation community at approximately 20 international airports and 5 regional airports. It also offers administrative services, such as billing, and collection and payroll services for police departments. Command Security Corporation was founded in 1980 and is headquartered in Herndon, Virginia.” Source Yahoo Finance

Taitron Components Inc. (TAIT):

* Note Dual class ownership, negative YOY revenue change, Qtrly revenue change -34.80% 

“Taitron Components Incorporated operates as a distributor of brand name electronic components, and supplier of original designed and manufactured (ODM) electronic components. The company distributes discrete semiconductors, including transistors, diodes, rectifiers, and bridges; optoelectronic devices, such as LEDs, infrared sensors, and opto couplers; and passive components consisting of resistors, capacitors, and inductors. The company also provides ODM components, which are manufactured electronic components based on its own engineering specifications under the TCI private label brand through manufacturing partners. In addition, it offers value-added engineering and turn-key services focusing on providing contract electronic manufacturers (CEMs) and original equipment manufacturers (OEMs) with ODM services for their turn-key projects. The company serves smaller and medium-sized distributors, CEMs, and OEMs. It operates in the United States, Mexico, Brazil, Taiwan, China, Canada, and internationally. Taitron Components Incorporated has strategic alliances with Teamforce Co. Ltd.; Grand Shine Management Limited; and Zowie Technology Corporation. The company was founded in 1989 and is headquartered in Valencia, California.” Source Yahoo

Technical Communications Corporation (TCCO):“For more than 50 years, Technical Communications Corporation (NasdaqCM:TCCO) has specialized in superior-grade secure communications systems and customized solutions, supporting our CipherONE Optimized Network Encryption best-in-class criteria, to protect highly sensitive voice, data and video transmitted over a wide range of networks. Government entities, military agencies and corporate enterprises in over 115 countries have selected TCC's proven security to protect their communications.” Source corporate site

Price per share = $6.47
Market Cap: 11.90M , Enterprise Value: 6.00M
Price/Sales: 1.64 , Price/Book : 1.01
Enterprise Value/Revenue: 0.84
Qtrly Revenue Growth (yoy): 57.10%
Gross Profit:4.14M 
Total Cash (mrq): 6.19M , Total Cash Per Share:3.37
Current Ratio:16.02 ,Book Value Per Share : 6.33
52-Week Change:3.19%
52-Week High(Nov 18, 2013):9.97 ,52-Week Low(Aug 12, 2013):6.00
Shares Outstanding: 1.84M, Float:1.45M

% Held by Insiders: 20.94% , % Held by Institutions:  5.50%

Surge Components Inc. (SPRS):
* Note Dual class ownersip, although appears to have the best price versus intrinsic value of all 7 stocks. 

“Founded in November 1981, Surge Components has grown into  a world class supplier of Capacitors and Discrete Semiconductors. Surge’s capacitor  product portfolio includes Aluminum Electrolytic Capacitors, Film Capacitors, and Ceramic Capacitors.  In the Discrete Semiconductor portfolio, the company’s  strengths include General Purpose, Recovery,  Schottky, and Transient Voltage Suppressor diodes, and a full line of Bridge Rectifiers.” Corporate website

Current price = .75
Market Cap : 6.79M,Enterprise Value: 2.96M
Trailing P/E: 5.77 Price/Sales:  0.28
Price/Book:0.69 , Enterprise Value/Revenue:0.12
Enterprise Value/EBITDA: 2.05 
Profit Margin: 4.92% , Operating Margin: 5.49%
Return on Assets: 6.50% ,Return on Equity: 12.98%
Qtrly Revenue Growth (yoy):  33.60%
Gross Profit (ttm):  6.96M ,
52-Week Change: 7.14%,EBITDA (ttm):  1.44M
Total Cash (mrq):  4.29M ,Total Cash Per Share (mrq):  0.47
Current Ratio: 3.05 , Book Value Per Share:  1.13

Shares Outstanding: 9.06M ,Float:  5.66M

Monday, April 14

Cheap and Risky founded 1915: 52 Change -58.40%

Gordmans Stores, Inc. (GMAN) : operates every day value price department stores,founded in 1915 with 95 stores in 20 states.

Why consider this cheap but RISKY idea. Note the main risk is from additional 2013 long term debt.

On the positive side list would include; GMAN has value versus historical results and industry peers for the following valuation measures, sales, book, earnings yield.Recently announced retirement  CEO Jeff Gordman will bring new leadership.Average 2011 to current annual EV/EBITDA was 5.71 versus the current TTM 4.35.

Outstanding but declining ROIC from 2010 to TTM, 49.12%,36.74%,37.71%,25.98%,8.15% respectively. Share count has remained stable from 2012.Modest positive insider activity. 

Market Cap: 88.63M ,Enterprise Value:  137.06M
Trailing P/E:  11.20 ,Price/Book:   2.17
Enterprise Value/Revenue :    0.22
Revenue :  627.39M ,
Qtrly Revenue Growth (yoy):  -1.10%
Gross Profit (ttm):  261.92M ,EBITDA (ttm):  24.53M
Total Cash: 5.76M ,Total Cash Per Share :   0.30
Total Debt: 52.25M ,Total Debt/Equity :   124.99
Current Ratio :  1.55
52-Week Change:   -58.40%

% Held by Insiders:    53.83%

Saturday, April 12

Daily Value Idea 04/12/14 , Micro Cap

LeapFrog Enterprises Inc. (LF): LeapFrog Enterprises designs, develops, and markets technology-based learning products and related proprietary content for children worldwide.

It’s easy to make a case against LeapFrog, mostly cheaper alternatives. Yet, the current price could present a strong opportunity.My quick check on Amazon shows 5 and 4 star reviews for their toys.LF has many number 1 products for child learning. number 1 or highly rated products such as LeapPad learning tablet, Leapster, learning game systems, along with learning toys, and educational videos.Amazon customers gave 4 and 5 star ratings for their large line of products. 

I will rely on financial numbers to make the case to investigate further.

Why investigate: Trading at 2 years lows for price and valuation based on book or sales. The stock has attracted value institutions to recently add to their existing position, Royce and Killen group.Tangible value based evidence for LF ;Price = $6.88…. assets supporting the price are total current assets of $5.72, cash per share of $2.45 and total assets of $7.47 per share, book value $6.17

High quality company based on an annual ROIC average from 2011 to TTM  of 21.05%. In addition it’s cheap based on book value of 6.17 with 2.42 per share in cash versus the current price of 6.88. The stock is pennies away from its 52 week low of 6.10, off 44% from 52 week high. Leap Frog would qualify as a Greenblatt magic stock,"cheap" based on EV/EBIT and "good" high ROIC. EV/EBITDA is 6.78 and ROIC of 22.19%. LF is trading at a discount to intrinsic value.  Why, just based on the book value of 6.17 coupled with high earnings yield, trailing P/E of 6.78,no debt and cash per share of 2.42, total current assets of 5.71.

Market Cap: 478.11M , Enterprise Value: 321.88M
Trailing P/E: 5.78
Price/Sales:0.87 , Price/Book:1.13
Enterprise Value/Revenue: 0.58 , Enterprise Value/EBITDA: 6.78
Profit Margin:  15.18% , Operating Margin: 6.31%
Revenue:  553.61M
Qtrly Revenue Growth (yoy):-23.70%
Gross Profi: 216.05M , EBITDA:  47.45M
Total Cash: 168.05M , Total Cash Per Share:  2.42
Current Ratio:4.98 ,Book Value Per Share: 6.17
52-Week Change: -16.00%
52-Week High (Aug 1, 2013): 11.95 ,52-Week Low : 6.10
% Held by Insiders: 14.89% , Short % of Float: 24.10%

Friday, April 11

Daily Value Idea 04/10/14 , Nano Cap

(JCTCF): Jewett-Cameron Trading Company manufactures and distributes specialty metal products, wood products to home centers/retailers. Operates four segments: Industrial Wood Products; Lawn, Garden, Pet, and Other; Seed Processing and Sales; and Industrial Tools and Clamps. JCTCF was founded in 1953 based in North Palins, Oregon.

Management is shareholder friendly with a history of buying back shares. Current valuation is attractive.

Why consider this value based nano cap? Consistent high annual average ROIC of 15.43% from 2012 to TTM with an EV/EBITDA of 4.85. Consistent growing book value per share. 2011 BV per share was 4.58 to the current TTM balance of 6.58. Solid financial position with a book value of 6.68 per share, cash per share of 2.58, deep discount in valuation to its industry for price to sales and book. Share count was 4,779,778 at the end of 2010. Management reduced that count by 35% to 3,133,740 for the most recent quarter!!Operating margins inched up from a 2011 OM balance of 6.72% to the TTM OM% of 8.91%. Note YTD price performance is down -5.84% but 2013, 2012 posted returns of 54.83% and 65.22% respectfully.

“Board of Directors has authorized the implementation of a share repurchase plan to purchase for cancellation up to 300,000 common shares”. “This amount represents approximately 10.6% of the 2,821,443 common shares outstanding. Since the 4(th) quarter of Fiscal 2010, the Company repurchased 1,960,511 common shares (adjusted for a 2 for 1 stock split effective May 1, 2013) under prior formal plans of repurchase.”

Market Cap: 29.99M
Enterprise Value: 22.88M
Price/Sales:0.64,Price/Book: 1.48
Enterprise Value/Revenue: 0.48
Enterprise Value/EBITDA : 4.85
Return on Assets (ttm): 13.08%
Return on Equity (ttm): 15.35%

Qtrly Revenue Growth (yoy):     -13.90%
Gross Profit (ttm):9.83M ,EBITDA:  4.71M
Total Cash:8.10M ,Cash Per Share: 2.58
Current Ratio:  15.62 ,Book Value Per Share: 6.68
52-Week Change: 6.93%
52-Week High: 13.88  ,52-Week Low:8.49
Shares Outstanding:3.13M ,Float:  1.96M

% Held by Insiders:42.91% ,% Held by Institutions:4.80%

Wednesday, April 9

Daily Deep Value 04/09/14 , Canadian Nano Cap

Deep value with Caledonia Mining Corporation: (CALVF)

Caledonia Mining Corporation operates a gold mine and acquires, explores and develops mineral properties for the exploration of base and precious metals focused on Southern Africa. 
Caledonia’s primary assets are a 49% interest in the Blanket Mine in Zimbabwe and a 100% interest in the Nama base metals exploration project in Zambia. Caledonia Mining Corporation trades on: the TSX (Symbol : CAL), and on the AIM Market of the LSE (Symbol : CMCL), and on the NASDAQ-OTCQX (Symbol: CALVF).

This profitable high dividend deep value play has been completely ignored by mining investors. Part of the neglect is exposure to perceived politically risky investment in a Zimbabwe's blanket mine coupled with  its tiny size ,(39.09M market cap 16.78 enterprise value).CALVF trades at a deep value discount to other gold miners

Why consider: Financially strong, trailing annual dividend yield 8.30%, discount to intrinsic value using DCF model, ignored by gold mining investors, consistently profitable with generous dividend. Financially strong, discount to book value, net cash per share .34 or 47% of the current price is net cash or 66% gross cash. 

current (04/09/14) price per share of $.75 versus book value per share 1.02, 52 week change -52.14%,  TTM gross profit per share .788, revenue per share 1.18 , TTM EBITDA per share 0.495012,cash per share of .49 or 25.70M 

"Caledonia Mining remains confident it will achieve its 2014 target of 48 000 ounces of gold at 49 percent owned Blanket Mine in Gwanda despite a 7 percent fall in first quarter output.
“Targeted gold production (at Blanket Mine) for 2014 is maintained at 48 000 ounces,” Caledonia said after first quarter output came in lower at 10 607 oz from 11 429 oz in 2013.

Market: 39.09M , Enterprise Value:   16.78M
Price/Sales:   0.65 , Price/Book:       0.76
Enterprise Value/Revenue:    0.27 ,Enterprise Value/EBITDA: 0.65
Operating Margin: 36.39% , Return on Assets: 19.48%
Revenue  61.73M .
Qtrly Revenue Growth (yoy):     -31.50%
Gross Profit :   41.09M , EBITDA : 25.80M
Total Cash (mrq):  25.70M , Total Cash Per Share:     0.49
Total Debt (mrq):  1.83M ,Current Ratio (mrq):    4.80
Book Value Per Share (mrq):   1.02
Operating Cash Flow (ttm):  14.97M
52-Week Change:  -52.14%
Trailing Annual Dividend Yield:  8.30%

Tuesday, April 8

Daily Value Idea 04/08/14 , Nano Cap

Today's thought, a tiny (15M EV 25M MC) company with a solid balance sheet with outstanding ROIC.

Spindletop Oil & Gas Co. (SPND) founded 1985 explores, develops, and produces crude oil and natural gas in North America. SPND produces in 16 states with large Texas concentration.

Why consider SPND:

Consistent growth of per share book value; average annual ROIC from 2012 to most  recent TTM was 16.50%; FCF/Sales 2012 to present 16.53%; 85% held by insiders; 52 change = -5.26%, 2010 to current quarter annual top line growth was 16.43%; aggressive share count reduction; debt reduction, share count was 7,660,803 as of 2009 to current reduced balance of 6,997,952;  2009 long term debt was 3,980,000 reduced to 2,910,000.

Market Cap: 24.97M , Enterprise Value:  14.51M
Trailing P/E:   7.59 ,Price/Sales:  1.85 , Price/Book:   1.22
Enterprise Value/Revenue:  1.12 , Enterprise Value/EBITDA: 2.73
Profit Margin :  25.63% , Operating Margin: 25.56%
Return on Assets : 7.82% , Return on Equity : 17.71%
Gross Profit:  9.40M , EBITDA :  5.31M
Total Cash :   9.44M , Total Cash Per Share:  1.36
Current Ratio:   2.49 , Book Value Per Share :  2.83
52-Week Change:   -5.26%
Shares Outstanding:    6.94M , Float:  1.04M

% Held by Insiders:    85.11%

Monday, April 7

Daily Value Idea for 04/07/14

I’m looking to present ideas more often by posting one short value idea every other day. Let’s see how it goes. You may want to keep on a watch list for further analysis. 

Orbit International Corp. (ORBT): “Orbit International Corp. designs, manufactures, and sells electronic components and subsystems, and commercial and custom power units. The company was founded in 1957 and is based in Hauppauge, New York.

Why consider: Insider ownership at 45.20%, strong Insider purchase activity, 52 change -21%, extremely tiny float of 2.22M shares versus shares outstanding of 4.38M, historically cheap versus the industry and history , P/S, P/B and price near 5 year low.

Market Cap: 12.05M , Enterprise Value:  11.30M 
Qtrly Revenue Growth (yoy):  -26.50% , Gross Profit (TTM):  9.34M
Total Cash (mrq):   2.81M ,Total Cash Per Share (mrq):  0.64
Total Debt (mrq):  2.10M ,Current Ratio (mrq):    4.65
Book Value Per Share (mrq):  3.63, Price per Share $2.75

Saturday, April 5

Data Analytics, Datawatch versus Tableau : Best Stock? Best Application?

Datawatch (DWCH) has a market cap of 210.61 Million, Tableau (DATA) 4.33 Billion down from a stunning March 1st size of 6.103 Billion. 

Today (04/04/14) Datawatch published a bold informative transparent comparison between Datawatch and Tableau software. This short clip was front and center on the home page, Datawatch vs TableauAnyone who uses data to make decisions or discover new insights will benefit from watching , along with investors.

Tableau is a good company with a good product. I have no interest in bashing their product or the company. Yet data discovery, democracy and analysis is far more than who produces the prettiest graph.

The Datawatch story is quickly unfolding. A software solution created by merging two data analytic thought leaders, Datawatch (DWCH) and Panopticon. Two quarters ago by smartly using stock as currency Datawatch purchased Swedish data visualization software developer Panopticon. 2013 Panopticon received the first ever Gartner cool vendor award focused on in-memory computing. The result was creation of the only beginning to end self service BI driven by visual data discovery. Tableau (DATA), QlikTech (QLIK), Spotfire (TIBX) or Microstategy (MSTR) cannot offer such important thorough functionality without a complete architecture overhaul.

Each new DWCH post is motivated as the position of the company materially changed. My opinions formed from real world 15 years working, developing and managing business intelligence projects for several Fortune 500 companies. Yes I've used Tableau along with Qlikview and MicroStrategy. Qlikview and Tableau are good products with different strengths. Unfortunately they are far from complete in offering self service BI or as Tableau likes to say data democracy. I can say with certainty as a customer of Tableau, Qlikview, MicroStrategy and other BI related products what Datawatch is offering is a must have analytic tool. I agree with CEO Morrison Q4 comment. Datawatch has a "unique first class solution offering. That can compete with any other vendor in the space, now offering real-time against nearly any variety of data that is present in the organization. No competitor today can ever expect to win against us on these agendas without a complete architecture overhaul."
As a potential investor the following are worth noting, aggressive insider buying over the past 2 years with no sales, tiny float, significant investing opportunity with a proven solution now expanded with new technology to enter the fast growing big data or any data for visual discovery. 42.75% of Datawatch is held by insiders.Note that heavy insider selling is the norm for all other companies in this space. 

Historical reported results cant reveal the recent positive operational changes at Datawatch. As such, I expect financial results over the next 6 to 18 months to materially improve. Investors should expect a much higher stock price.

Tableau's usefulness is far less valuable without the only out-of-the- box, ready to go, everyman technology perfected over 20 years of continuous improvement for data mining unstructured or semi structured content existing in most any file source;web,xps,pdf,html,log,mdb,xls,txt,prn, and on and on. This software is from Datawatch formerly called Monarch now Modeler.Furthermore with the recent acquisition of Panopticon Datawatch now offers the only beginning to end tool for speed of thought data analysis, discovery,for any size data. Datawatch vs Tableau 

Tableau creates nice graphs with some data discovery functionality. But let's say that a marketing or operational expert needs to research,discover new knowledge and then present the findings by combining non relational data buried on several websites, external PDF files, invoices , ERP reports or an internal Access databases. You will get nowhere without Datawatch's ability to empower the functional expert ,consultant, staff or executive to quickly mash/relate then create new metrics from all this previously unrelated data. 

Additionally from my own hands on experience finding or discovery new opportunities is only possible with speed of thought functionality. Datawatch has that won with in memory speed over much slower Tableau. Additionally Datawatch offer real time and access to virtually any source structured or unstructured. Tableau does not. Datawatch has built in data discovery functions that must be scripted with Tableau.  

DWCH is not a traditional value stock. But it does present a unique high reward and high risk idea.Furthermore, relative industry value but far more importantly just entered the fast growing large market for big data, visualization with a tiny base a better product and industry solutions versus the other multibillion dollar peers, Tableau. Furthermore I believe an opportunity exists because the market does not understand/value Datawatch's recent changes and the impact to future opportunities hence creating a market discount.  

From an investing point of view market traction is inevitable over the next year. The possibility of attracting an acquisition from large software vendors is real. Datawatch is an inexpensive way to improve existing application offerings from a large software vendor or just gain access to the hottest sector in technology, data visualization. Datawatch has “first mover” advantage to analyze high volume of data in real-time any time or size. Furthermore, in-memory technology, access to static structured and unstructured sources, seasoned industry respected team now on board, current and future possibilities with machine data and predictive analytics. Splunk is working with Datawatch to offer their software visualization. There is so much more to say. 


The following deep value nano cap ideas were discovered using Datawatch Desktop. Tableau is (for me) way too slow to do discovery and have speed of thought analysis. More importantly Datwatch provides access to other decision making sources, locked in semistructured and unstrucuted, HTM, PDF, TXT. Impossible with Tableau or the other BI tools like Qlikview. 
Nano cap deep value ideas, found using a combination of scatter plots, tables, tree maps all within Datawatch desktop. 

Sunday I will post my findings

Thursday, March 20

Potential Over Looked Value: OTC listed, Foreign,

 See interactive table for all 7 stocks . Click for quotes

Bullet Point Reasons to investigate 

CVTPF (Cvtech Group): Deep discount based on historical, relative and intrinsic valuation; 52 week low ; -32% 52 week change; Price is close to 5-year low; P/B and P/S Ratio near 10-year low,
Price on 03/20/14 = $.75


SENEA (Seneca Foods): Asset rich real estate on books below FMV; attracted value institutions, Royce, Kennedy Capital,and Robotti Robert to report additional Q4 2013 purchases
Price on 03/20/14 = $30.74

IMKTA (Ingles Markets) :Large real estate holdings,68 shopping centers, 96 properties free standing Ingles stores, 19 undeveloped sites, 73 acres of land in NC, and other properties on the books below FMV; Aggressive 12 months share count reduction, ordinary shares outstanding was 24.26M on Q1 2012 reduced to Q1 2013 balance of 22.76M; Profitable now trading at discount to industry and historical valuations.

Price on 03/20/14 = $23.72

DPNEY (Daphne International Holdings):52 changes of -63.52%; Overreaction to China data; near 52 week low off high of $25.95; profitable strong financial position; trading at a deep discount to historical, industry and intrinsic value; EV/EBITDA = 3.69; Favorable view from value institutions Royce; trailing annual dividend yield of 4.30%   

Price on 03/20/14 = $8.92
Hong Kong exchange price

SRGHY   (Shoprite Holdings Ltd. ):Off 52 week high of 40.79, 52 week change – 65%, price is close to 3 year low, P/B P/S near 2 year low, highly predictive earnings and cash flow based on historical results. Great vehicle to participate in growing incomes in Africa.  Supermarket operator over reacted to due to concerns regarding the health of the South African consumer

Price on 03/20/14 = $13.70

SHP:SJ Johannesburg exchange

TVBCY  (Television Broadcasts Limited) :Strong A+ financial position with predictable earnings based on consistent 10 years of profitable results.  Annualized revenue growth 7.20%, EBITDA growth 18.30%, and book value growth 9.10% over the prior 5 year period.

Price on 03/20/14 = $12.15
Hong Kong Exchange Price

AUSDF (Ausdrill Ltd): Discount to intrinsic value based on an average EBITDA per share of .37 from 2006 to TTM, TTM EBITDA = 207.70M versus market cap of 257.66M and enterprise value of 715.47M. EV/EBITDA (TTM) = 3.44, 52 week change = -72.77%, BV = 2.72 versus price of .825, 52 week high of $3.07 versus price of .825, exposure to Australia and Africa.
Price on 03/20/14 = $.82

Australian exchange: ASL:AU

CVTech Group Inc(CVTPFcountry Canada

Per share price 03/20/14  = $.73

“CVTech Group inc. (“CVTech” or the “Company”) is a management company with subsidiaries in activities pertaining to the construction and maintenance of electrical transmission and distribution lines, power houses and substations, as well as pruning and vegetation control services around distribution and transmission power lines. CVTech has more than 1,000 employees.” Source corporate website

CVTPF CVTech Group's market price is discounted to its intrinsic value and relative valuation. Aggressive long term debt reduction, the 2009 long term debt/lease obligation balance was 26.1M versus the current balance of 1.60M. Share count reduction over the past year.

THE CANADIAN PRESS March 20, 2014 

CVTech subsidiaries U.S. and Canadian subsidiaries have been awarded several contracts valued at roughly $60 million

Canadian quote CVT.TO

Market Cap: 53.38M ,Enterprise Value:  99.14M
Price/Sales:0.21 ,Price/Book:0.66
Enterprise Value/Revenue:0.39 , Enterprise Value/EBITDA: 7.74
Revenue: 256.38M , Revenue Per Share: 3.56
Qtrly Revenue Growth:-3.40%
Total Cash: 2.18M
Total Debt: 47.58M
Current Ratio:1.08
Book Value Per Share:1.14
52-Week Change:-31.82%

52-Week High: 1.32 ,52-Week Low:0.75

Seneca Foods Corp. (SENEAcountry USA

Per share price 03/20/14  = $30.74

Seneca Foods Corp is a producer and distributor of processed fruits and vegetables founded in 1949. The company has 22 processing plants throughout the United States, two can manufacturing plants, two seed processing operations, small farming operation coupled with a limited logistical support network. Warehouses are located next to its processing plants. The Company’s food processing plants are located in major vegetable producing states and in two fruit producing states.  Fruits and vegetables are primarily obtained through supply contracts with independent growers. 

SENECA is a slow growing asset rich company. Book value per share is 35 with a substantial real estate holdings.

Per Share Values = : Price $30.74 , Cash = $1.67 , BV =$35.00 , AR = $7.71 , Inventory = $44.60 , Current Assets = $56.87 , PPE Gross = $49.84 , PPE Net = $17.52 , Enterprise Value = $61.44 , GP = $13.14

The stock has attracted value institutions, Royce, Kennedy Capital,and Robotti Robert to report additional Q4 2013 purchases

Valuation Measures

Market: 330.18M , Enterprise Value:   660.62M

Price/Sales:   0.25 , Price/Book :   0.87

Enterprise Value/Revenue:0.50 , Enterprise Value/EBITDA:13.25

Return on Assets : 1.94% , Return on Equity: 5.02%

Revenue :  1.32B , Revenue Per Share: 122.91

Qtrly Revenue Growth (yoy): 5.50%

Gross Profit: 141.31M ,EBITDA:  49.86M

Current Ratio:  3.89

Operating Cash Flow:    44.15M ,Levered Free Cash Flow:   2.21M

52-Week Change:    -5.85%

52-Week High:   36.33 , 52-Week Low :     27.46

% Held by Insiders:  18.75%

Real Estate Portfolio:

Ingles Markets, Incorporated (IMKTA)country USA

Per share price 03/20/14  = $23.72

"Ingles Markets, Inc., is a supermarket chain in the Southeast United States. It operates in three lines of business: retail grocery sales, shopping center rentals and a fluid dairy processing plant." source Morningstar

Real Estate Rich: Ingles Markets owns and operates 68 shopping centers, 57 of which contain an Ingles supermarket, and owns 96 properties that contain a free-standing Ingles store. 19 owned undeveloped sites are suitable for a store or shopping center development. In addition, Ingles owns outparcels and other acreage located next to the shopping centers and supermarkets it owns. Real estate owned is located in the same geographic regions as its supermarkets

The Company owns a 1,649,000 square foot facility. The location is strategically located between Interstate 40 and Highway 70 near Asheville, North Carolina along with 73 acres of land. The facility includes the Company’s headquarters warehouse and distribution facility. The property also includes truck servicing and fuel storage facilities.   Furthermore, owns a 139,000 square foot warehouse on 21 acres of land one mile from main warehouse and distribution facility used to store seasonal/overflow items. 

The Company’s milk processing and packaging subsidiary, Milkco, Inc., owns a 140,000 square foot manufacturing and storage facility in Asheville, North Carolina. In addition to the plant, the 20-acre property includes truck cleaning and fuel storage facilities. Ingles market incorporated in 1965.

Positives: Aggressive 12 months share count reduction, ordinary shares outstanding was 24.26M on Q1 2012 reduced to Q1 2013 balance of 22.76M. Real estate on the books for less than market value.  

Market Cap: 558.51M,Enterprise Value:1.47B
Price/Sales: 0.14  ,Price/Book:  1.30
Enterprise Value/Revenue: 0.39
Enterprise Value/EBITDA: 7.01
Financial Highlights
Qtrly Revenue Growth:1.10%
Current Ratio:1.94  ,Book Value Per Share:18.30
52-Week Change: 14.35%
S&P500 52-Week Change3: 20.29%
% Held by Insiders:3.30%  ,% Held by Institutions: 67.20%
Trailing Annual Dividend Yield:2.80% ,5 Year Average Dividend Yield: 3.70%    

Daphne International Holdings Limited (DPNEY): country China
Per share price 03/20/14  = $8.92

"Daphne International Holdings Ltd., is a manufacturer of footwear for the mass market under its proprietary brands ‘Daphne’ and ‘shoebox’ in Mainland China, through a network of both directly-managed shops and franchised stores." Morningstar

Listed on Hong Kong Exchange: Quote

Royce fund manager David A. Nadel made the following comments on its position in Daphne International in the recent 2013 Annual Report to Shareholders, “A slumping share price led us to more than triple our position in Daphne International Holdings during 2013. Daphne is a Chinese footwear maker and retailer, which sells Aerosole shoes in China. Its strong management and market position gave us confidence in the company’s long-term potential, though we recognize that this investment is likely to require patience. The overall slowdown in the Chinese economy has taken its toll on Daphne’s business as lower levels of consumer spending in particular caused sales and revenues to decline.“

Market Cap:735.52M ,Enterprise Value: 660.13M

Price/Sales: 0.54 ,Price/Book: 1.12

Enterprise Value/Revenue: 0.48

Enterprise Value/EBITDA: 3.69

Profit Margin:  7.38% ,Operating Margin: 10.29%

Return on Assets: 9.14% ,Return on Equity: 16.16%

Revenue(ttm):  1.37B ,Revenue Per Share:16.62

Qtrly Revenue Growth: 1.70%

EBITDA(ttm):  178.76M ,Net Income(ttm): 101.06M

Total Cash Per Share: 1.95

Current Ratio:    3.26

Book Value Per Share: 7.94

Cash Flow Statement

Operating Cash Flow (ttm):      63.23M

52-Week Change:  -63.88%

52-Week High: 27.54

52-Week Low:  8.06

Trailing Annual Dividend Yield:  4.30%  

Shoprite Holdings Ltd. (SRGHY) country South Africa
Per share price 03/20/14  = $13.70

South African company listed on the Johannesburg exchange SHP:SJ

Shoprite Holdings Limited "is an investment holding company with subsidiaries operating in the supermarket, produce distribution, furniture retailing, and property holding industries. Retail chains of the Group include "Shoprite", "Checkers", "OK", "Hyperama", "Freshmark", and "Sentra"." Source Bloomberg

Positives: Off 52 week high of 40.79, price is close to 3 year low, P/B P/S near 2 year low, highly predictive earnings and cash flow based on historical results. Great avenue to participate in growing incomes in Africa. 

Shoprite Holdings is one of Africa's largest retailers head quartered in South Africa. 

Television Broadcasts Limited (TVBCY) country Hong Kong
Per share price 03/20/14  = $12.15

Television Broadcast (OTCPK: TVBCY) Hong Kong

“Television Broadcasts Limited broadcasts and produces television programs. The Company also licenses and distributes satellite and subscription television programs, and provides services such as animation, videotape rental, film studio leasing, and advertising.” Source Bloomberg

Why consider: Television Broadcasts Limited, Strong A+ financial position with predictable earnings based on consistent 10 years of profitable results.  Annualized revenue growth 7.20%, EBITDA growth 18.30%, book value growth 9.10%  over the prior 5 year period.

Ausdrill Ltd. (AUSDFcountry Australia 

Per share price 03/20/14  = $.82

“Ausdrill Limited provides specialist drilling services. The Company operates drill, blast, and exploration rigs and its services include contract drilling and blasting, exploration drilling, ground support, contract open pit mining and earthmoving, mining equipment supplies, and logistics management. The Group also provides trenching, cable and pipeline rollout services.”Source Bloomberg

Why investigate further: Discount to intrinsic value based on an average EBITDA per share of .37 from 2006 to TTM, TTM EBITDA = 207.70M  versus market cap of 257.66M  and enterprise value of 715.47M. EV/EBITDA (TTM) = 3.44, 52 week change = -72.77%, BV = 2.72 versus price of .825, 52 week high of $3.07 versus price of .825, exposure to Australia and Africa.

Managing director Ron Sayers, described the situation as "the toughest business conditions for some years." This seems to have created an opportunity to buy shares at deeply depressed levels. Deutsche Bank still has a buy rating (March 2014) even with management’s lowered earnings forecasts for the 2014 financial year.

5 Year Chart on Australian Exchange

Australian Quote from Bloomberg