Value anomalies reporting news for the week ending 08/13/10 Part 1

Click to get yahoo quotes and news on the 6 stocks below: ADGF, DVLN.OB,PRXI,CLRO,AWX,FIGI.PK

Tuesday (08/10/10)
ADGF( Adams Golf) :$4.16... Blowout quarter reported “net sales of $31.6 million for the three months ended June 30, 2010, as compared to $23.3 million for the three months ended June 30, 2009, an increase of 36% year-over-year. Adams Golf had a net profit of $4.9 million, or $0.63 per fully diluted share, for the three months ended June 30, 2010, as compared to a loss of $5.2 million, or $0.78 per fully diluted share, for the comparable period of 2009.”



Wednesday (08/13/10)
DVLN.OB (DVL Inc) $.12


This value anomaly continues and is difficult to justify. DVLN.OB is a 12 cent stock price with a .57 book value and recent reported quarter profit of 1,036,000 along with positive cash flow.

10q released on 10/13/10



Friday (08/13/10)
CLRO:(ClearOne Communications Inc) $3.51


Strong insider buying coupled with outstanding financial results.



FIGI.PK (Fortress International Group) : $1.59

Second Quarter 2010 Financial Highlights ;

•Revenue of $22.7 million, an increase of 88% over the second quarter 2009

•Gross profit of $3.2 million, an increase of 129% over the second quarter of 2009

•Gross profit margin of 14.1%, compared with 12.0%, in the second quarter of 2009

•Net income from continuing operations of $0.4 million, or $0.03 per share compared with a net loss from continuing operations of $(13.6) million or $(1.07) per share for the second quarter of 2009

•Adjusted EBITDA from continuing operations of $0.8 million, compared with and adjusted EBITDA loss from continuing operations of $(1.3) million for the second quarter of 2009

•Backlog of $51.5 million at June 30, 2010

•Cash and cash equivalents totaling $9.5 million at June 30, 2010

"With our healthy backlog of $51.5 million, combined with the business we expect to close during the second half of the year, we expect to continue our positive trend as we move into the balance of 2010. Our confidence is strengthened by the high level of RFP and RFQ activity coming from new and existing customers, both domestically and internationally. Additionally, two major market initiatives currently underway are creating a significant need for new data center space. The federal government initiative aimed at consolidating thousands of legacy-built data centers into state of the art, energy efficient spaces following a thorough evaluation of all existing facilities and upgrade work on select centers. Secondly, our industry is experiencing tremendous growth from cloud computing, which is creating continued demand for data centers developers to expand their available raised floor space to house their own and their customers' clouds. Our company is ideally positioned to help customers deal with these

demands and strategically develop their sites to meet this new paradigm shift. As we work to develop new customers impacted by these dynamic market factors, we also remain focused on pursuing opportunities to cross sell our facilities management services, where appropriate, as we continue to see significant growth potential for the sale of high-margin, recurring revenue facilities management contracts."

Chief Financial Officer Timothy C. Dec added, "We continued to achieve our growth targets for the first half of the year as the beneficiaries of pent-up market demand, as well as customers' continuing recognition of Fortress' superior solutions. Our ability to deliver significant revenue growth while maintaining gross margins within our targeted range of 14-18% is indicative of the efficiency with which Fortress is currently operating and the effectiveness of our overall operational structure. In addition, we continued to strengthen the Company's financial position, finishing the second quarter with approximately $9.5 million in cash on our balance sheet, compared to $2.3 million at the end of 2009. We are pleased with our strong first half, and confident that this momentum will continue during the remainder of 2010."

press release



Tuesday (08/12/10)

AWX (Avalon Holdings); $2.84

“Revenues increased by 44% compared with the second quarter of 2009. This increase was driven primarily by our waste management services segment whose revenues increased by 65%. We are pleased with our financial progress in the quarter and look forward to building on this momentum and remain committed to identifying opportunities for the creation of future shareholder value."


Long AWX
Friday (08/13/10)

PRXI (Premier Exhibitions); $1.55 “has been awarded 100% of the fair market value of the artifacts, which the Court set at approximately one hundred ten million dollars. The Court has reserved the right to determine the manner in which to pay the award. It will determine by August 15, 2011, whether to pay the Company a cash award from proceeds derived from a judicial sale, or in the alternative, to issue the Company an award of title the artifacts with certain covenants and conditions which would govern their maintenance and future disposition.”

My question; with the closing price of $1.55 , per share data of cash .27, AR .13, GP .39, total liabilities .26 with relatively no shorts I have yet to reconcile this data with the additional salvage award of “ approximately one hundred ten million dollars” announced Friday. The per share value of the awards adds 2.49 per share (110,000,000 award/41,000,000 shares outstanding)= 2.49.

This needs more work.


Hope this data  is useful


Anonymous said...

thanks, love the blog and have been a long time reader. There seems to be be so much more value in the micro and small cap space. Much more fun digging for mispricing here than trying to analyze GE or IBM.

as an attempt to give back thought I'd send you this short writeup I did on an investment I find very compelling. Essentially the company is being forced to liquidate by their bank. Even if the bank seizes the assets and conducts a firesale liquidation I see 40%+ upside and 200%+ upside in an orderly sale. Would be interesting to get your thoughts.


-Shaun Noll, CFA

ShadowStock said...


I sincerely appreciate the complements from a professional.

It’s a struggle to work + full time and post useful information. Sorry to whine but the crushing fatigue and related problems with Multiple Sclerosis makes it that much more difficult. But having said that, it’s great to realize that experienced investors can run with the quick posts and complete the analysis to determine if it’s useful to their goals.

I will take a look at CFW as the book value, reserves do help with the ominous bank related issues.


Floris said...

Hey John,

Sorry to hear about that! I would just like to add that as a reader I also really appreciate your work!

I agree wholeheartedly with your analysis of ADGF (also long). Its a rare net net with a strong brand and long term earnings potential. They just make great clubs (As an avid golfer).

Whats the idea behind DVL? I skimmend through their 10K a while back but were you able to analyze their business? Is it at all transparant how they make their money? (I havent had a close look at it).

ShadowStock said...

Floris, thanks!

My approach with DVLN.OB is different from other holdings. The stock is very illiquid but hopefully this adds a nice alpha premium to the stock price. I was able to buy a few shares at ~.10 a few months ago but have no delusions that management is looking to increase shareholder value. But with the real estate holdings potentially below market value and a ~ .56 per share book value along with positive cash flow and net income I see the stock as a worthwhile small holding.For now, I will just forget about the stock. Hopefully over time it will provide a nice market beating return.

ShadowStock said...


Its looks like you covered all the possible scenarios with CFW. Thanks for the work! Debt always scares me especially given their in violation of several bank covenants.

BUT, the value of their energy assets are not going anywhere and investors should have faith that some reasonable price will be met in the future. Hopefully there are no loopholes for someone to steal assets at a huge discount due to some technical contract law.

I have nothing new to add.

Good luck

Anonymous said...

awesome John, I think once the results from their strategic review process comes out they will find offers for their assets that will leave multiples of the current implied value for the equity holders. If you want to talk more about it feel free to contact me via email from my q&a and we can talk in more depth.

Even if the bank seizes the assets I think there is at least $1 in value left for equity per share. I doubt anyone will 'steal' the assets though, both Canaccord and Global Hunter are quite good and are their advisers.