6/06/2010

“We are looking for the horse with one in two chance of winning which pays you three to one.”

Charlie Munger


“You’re looking for a mispriced gamble that’s what investing is. And you have to know enough to now whether the gamble is mispriced. That’s value investing."

Last week’s post (http://shadowstock.blogspot.com/2010/06/building-shareholder-value-under-radar.html) TEAM gained +18% on Friday. Jacob Engineering offered to buy TechTeam unit 59 million for their government unit.

http://www.reuters.com/article/idCNSGE6530DF20100604?rpc=44


Distressed micro cap value based ideas. 

Dismal prior 3 month stock price returns

BOLT

Bolt Technology Corporation

3 month return = -26%

Price: $8.22

Market Cap = 70.96 million

EV: $ .50

Enterprise value = 35.80 million

Bolt is a casualty of offshore drilling woes and a year over year decline of revenue of -54.56%.

But this is offset by an outstanding balance sheet (A+ financial health), debt to asset reduction from 2005 and 2007 to the TTM total liabilities/assets, improving gross margins from 41% in 2006 to 50% for the TTM.

DDE

Dover Downs Gaming & Entertainment Inc

3 month return -17%

Price = $3.04

Market cap : 98 million

EV = $6.01

Enterprise value: 193 million

Short % float 6%

Current dividend yield 3.90%

Large real estate holdings

Price/NTA = .91

Average operating income from 2006 to 2009/Current EV = 19%

Current operating income /enterprise value = 9%

Potential discount to normaized earnings

YOY quarterly revenue change = -5%

Reducing total liabilities/ assets from 2007 to the TTM

SGA/Revenues for the prior year = 9%

Share count reduction from 2004 to the TTM

Shares purchased at opportunistic prices (last quarter of 2008 and first quarter of 2009)



VII

Vicon Industries

3 month return -16%

Price = $4.25

Market Cap = 14,103,000

EV = 3.13

Enterprise value = 19,130,000

Reducing total liabilities to assets from 2005 and 2007 to TTM

Shares purchased at opportunistic prices (last quarter of 2008 and first quarter of 2009)

YOY Quarterly revenue change -22%

Short % float = .2%

Consistent stable share count

Potential discount to normalized earnings; average annualized operating income over 2006 -09 / current enterprise value = 20.77% versus the current OI/EV = -3.79%

1 comment:

Anonymous said...

tech might be really interesting here...my quick take is you are creating the residual business at 2x earnings it looks like