Hopefully this data proves useful. I looked for direct inside purchases in 2009 for an average price greater than current quote on 03/13/09. My universe was 4,520 companies. Many were smaller companies.
The screen also included
EV/Price <1.50
Shorts as a percentage of float <10
Price > Average price paid by insiders
Direct open mareket purchases
Average 3 years shares outstanding / TTM shares outstanding > .94
Their will be a link providing fundamental data. But in my opinion the information needs further analysis.
Only the top results ranked by 2009 Inside Purchases/EV
Click to view
Crosstab view
Down load data analysis to Excel
Quotes on the symbols found
Value institution holding shares in the above stocks with insider buying greater than current market price.
Symbol Insitution Percentage
APSG HEARTLAND ADVISORS INC. 8.07
APSG ROYCE & ASSOCIATES, INC. 7.73
APSG ROYCE OPPORTUNITY FUND 5.59
BBSI HEARTLAND ADVISORS INC. 4.41
BBSI ROYCE & ASSOCIATES, INC. 12.81
BBSI ROYCE CAPITAL FUND-MICRO-CAP PORTFOLIO 0.76
BBSI ROYCE CAPITAL FUND-SMALL CAP PORTFOLIO 1.67
BBSI ROYCE MICRO-CAP FUND 1.14
BBSI ROYCE TOTAL RETURN FUND 3.51
DRAD HEARTLAND ADVISORS INC. 5.28
DRAD ROYCE & ASSOCIATES, INC. 7.41
DRAD ROYCE OPPORTUNITY FUND 5.42
ECOL DWS Dreman Small Cap Value Fd 2.22
FARM ROYCE & ASSOCIATES, INC. 3.64
FARM ROYCE TOTAL RETURN FUND 3.37
ISSI ROYCE & ASSOCIATES, INC. 2.76
ISSI ROYCE CAPITAL FUND-MICRO-CAP PORTFOLIO 1.03
ISSI ROYCE MICRO-CAP FUND 1.67
ITI MARXE, AUSTIN W. & GREENHOUSE, DAVID M. 12.7
MTOX FIDELITY LOW-PRICED STOCK FUND 3.35
MTOX WHITEBOX ADVISORS, LLC 1.8
MTRX DWS Dreman Small Cap Value Fd 0.97
MTRX ROYCE OPPORTUNITY FUND 2.04
NOOF FIDELITY LOW-PRICED STOCK FUND 0.57
NOOF ROYCE & ASSOCIATES, INC. 9.81
NOOF ROYCE CAPITAL FUND-MICRO-CAP PORTFOLIO 2.38
NOOF ROYCE LOWER PRICED STOCK FUND 3.73
NOOF ROYCE MICRO-CAP FUND 3.67
NOOF WHITEBOX ADVISORS, LLC 1.86
PLT FIDELITY LOW-PRICED STOCK FUND 9.98
PMD ROYCE SPECIAL EQUITY FUND 1.1
TIER HEARTLAND ADVISORS INC. 9.09
WSTL HEARTLAND ADVISORS INC. 4.4
WSTL ROYCE & ASSOCIATES, INC. 4.94
WSTL ROYCE OPPORTUNITY FUND 3.5
3/13/2009
Ideal Market Environment for Clarus Corp
Current Price on 03/13/09 $4.00
Current market conditions have enhanced Clarus Corp’s assets for a future combination. Clarus Corp (CLRS.PK) is a shell company with no current operating business but instead has about 86 million in cash or $4.95 per share and 223 million in NOLs. 90% of the NOLs expire 2020 or latter. The current stock price is only $4.06!
CLRS.PK is seeking to acquire a business in any industry and is being managed by the highly successful CEO Warren Kanders. Kanders has a successful track record most notably with AH (NYSE) Armor Holdings. Armor Holdings (AH) posted a ~30% compounded growth rate after he took over.
The first conference call for CLRS.PK was this past Tuesday 03/03/09.He believed given current market conditions it was important to update shareholders on the company’s status and future activities. The next conference call will only be after a new company is acquired.
Competitions for new deals have been dramatically reduced and valuations have fallen substantially. These conditions are improving opportunities for their projected 2009 asset redeployment. Clarus offers a unique opportunity. The ability to provide fresh capital with 86 million in net cash, 225 million in NOLs, immediate access to a public listing, a quick combination with no shareholder vote, and a proven talented manager with Warren Kanders.
There are many companies that would benefit from a Clarus combination. Some examples would be companies with short term liquidity issues, forced divestiture of corporate assets to generate needed liquidity, public companies selling off non core operating divisions, private entities and other situations. All of these actionable opportunities are increasing.
Clarus has stated a clear vision for the new combination and would include 25 million in EBITDA, long term favorable macro trends, an industry leading management team, a diversified customer and supplier base, predictable recurring revenue stream but would also consider acquiring ideas below the 25 million EBITDA.
I consider CLRS.PK a compelling opportunity with an excellent risk reward ratio or margin of safety.
From 8/5/2008 to 12/30/2008 Warren Kanders purchased 1,001,027 shares in the open market for an average price of $4.46 investing $4,467,208.
Additional shares were purchased before 8/05/08
CLARUS CORP --- Insider Trades
Insider Date Trans Type Form Shares Traded Price Shares Held
KANDERS WARREN B 12/30/2008 B Form 4 300,000 3.75 3,213,977
KANDERS WARREN B 11/26/2008 B Form 4 125,000 4.2 2,913,977
KANDERS WARREN B 11/21/2008 B Form 4 142,027 4.2 2,788,977
KANDERS WARREN B 8/11/2008 B Form 4 309,000 5.105 2,646,950
KANDERS WARREN B 8/5/2008 B Form 4 125,000 5.146 2,337,950
KANDERS WARREN B 11/15/2007 B Form 4 58,500 6.5 2,212,950
EHRLICH BURTT R 8/22/2007 B Form 4 25,000 7 88,000
Insider activity from Yahoo
I have a long position in CLRS.PK
Current market conditions have enhanced Clarus Corp’s assets for a future combination. Clarus Corp (CLRS.PK) is a shell company with no current operating business but instead has about 86 million in cash or $4.95 per share and 223 million in NOLs. 90% of the NOLs expire 2020 or latter. The current stock price is only $4.06!
CLRS.PK is seeking to acquire a business in any industry and is being managed by the highly successful CEO Warren Kanders. Kanders has a successful track record most notably with AH (NYSE) Armor Holdings. Armor Holdings (AH) posted a ~30% compounded growth rate after he took over.
The first conference call for CLRS.PK was this past Tuesday 03/03/09.He believed given current market conditions it was important to update shareholders on the company’s status and future activities. The next conference call will only be after a new company is acquired.
Competitions for new deals have been dramatically reduced and valuations have fallen substantially. These conditions are improving opportunities for their projected 2009 asset redeployment. Clarus offers a unique opportunity. The ability to provide fresh capital with 86 million in net cash, 225 million in NOLs, immediate access to a public listing, a quick combination with no shareholder vote, and a proven talented manager with Warren Kanders.
There are many companies that would benefit from a Clarus combination. Some examples would be companies with short term liquidity issues, forced divestiture of corporate assets to generate needed liquidity, public companies selling off non core operating divisions, private entities and other situations. All of these actionable opportunities are increasing.
Clarus has stated a clear vision for the new combination and would include 25 million in EBITDA, long term favorable macro trends, an industry leading management team, a diversified customer and supplier base, predictable recurring revenue stream but would also consider acquiring ideas below the 25 million EBITDA.
I consider CLRS.PK a compelling opportunity with an excellent risk reward ratio or margin of safety.
From 8/5/2008 to 12/30/2008 Warren Kanders purchased 1,001,027 shares in the open market for an average price of $4.46 investing $4,467,208.
Additional shares were purchased before 8/05/08
CLARUS CORP --- Insider Trades
Insider Date Trans Type Form Shares Traded Price Shares Held
KANDERS WARREN B 12/30/2008 B Form 4 300,000 3.75 3,213,977
KANDERS WARREN B 11/26/2008 B Form 4 125,000 4.2 2,913,977
KANDERS WARREN B 11/21/2008 B Form 4 142,027 4.2 2,788,977
KANDERS WARREN B 8/11/2008 B Form 4 309,000 5.105 2,646,950
KANDERS WARREN B 8/5/2008 B Form 4 125,000 5.146 2,337,950
KANDERS WARREN B 11/15/2007 B Form 4 58,500 6.5 2,212,950
EHRLICH BURTT R 8/22/2007 B Form 4 25,000 7 88,000
Insider activity from Yahoo
I have a long position in CLRS.PK
3/08/2009
Top insider buys for 2009
This will be quick and won’t provide all the needed analysis for now. But the current data will be valuable.
I’m now be able to post Excel files that can easily be downloaded and provide additional information that will help with your research.
The list was created by taking the value of total direct insider purchases for 2009 as a percentage of the total market cap and also enterprise value. I’m just presenting the top ideas based on the magnitude of insider purchases. Companies with execessive debt or dillution were eliminated. In the spread sheet that can be downloaded it contains the shares short as a percentage of float. A few were over 10%and may need to be looked at more closely.
See the ideas along with a spread sheet including other useful data. I will update and provide a more focused list once time is available.
Ideas with details
I’m now be able to post Excel files that can easily be downloaded and provide additional information that will help with your research.
The list was created by taking the value of total direct insider purchases for 2009 as a percentage of the total market cap and also enterprise value. I’m just presenting the top ideas based on the magnitude of insider purchases. Companies with execessive debt or dillution were eliminated. In the spread sheet that can be downloaded it contains the shares short as a percentage of float. A few were over 10%and may need to be looked at more closely.
See the ideas along with a spread sheet including other useful data. I will update and provide a more focused list once time is available.
Ideas with details
3/02/2009
Creating shareholder value
I was interested in searching for companies that could be exploiting this bear market in the hopes that they will increase future shareholder value. A potential overlooked financial measure not immediately obvious is actual large share buybacks at depressed prices over the past 6 months. For some companies these purchases could turn out to be the most prudent allocation of shareholder capital. Many companies will issue press about share buybacks and never buy those shares. Other companies will never make a public announcement and actually buy large amounts of shares. I began the search using the cash flow statement to get a tangible measure of how much money was expended on share repurchases by quarter.
Using the “Financing Activities” section of the cash flow statement I reviewed the line item “sale or purchase of stock”. A negative indicates the expenditure of cash on share buybacks and positives would be the receipt of cash from the exercise price of options or the issuance of new shares. This may be obvious but I believe it’s an area that can provide new ideas as part of a more complete analysis.
My initial thought was to examine the past 4 reported quarters emphasizing the most recent quarterly activity. I took the amount expended on share buybacks as a percentage of the current market capitalization, enterprise value and the float value to gauge the relative magnitude. The first stock that appeared at the top of the list was HAMP.PK. Looked interesting given the stock purchases for the 3 month period ending 09/27/08 was 11,952,000. This amount was material considering the market cap of ~ 12 million on Monday February 23. They reduced the shares outstanding from 7,860,000 on 02/07 to 6,441,000 on 2/08. I was interested and wanted to take a closer look. Unfortunately I quickly discovered that on Tuesday (02/24/09) they received an all cash offer for $5.50 or a 190% premium from Monday’s(02/23/09) close at $1.85.
Lucky find, yes but I wanted to continue with the approach to see what else I may uncover. So I applied this method to over 4,000 companies. The financial sector was excluded and added the additional criteria below along with other decision making data.
1) Year over year share count reduction
2) Enterprise value less than 140% of market cap (a margin of safety measure)
3) Positive CFFO for current reported 12 month period
4) Share price > $1.00
5) Positive insider activity
6) Shares short as a percentage of float < 5%
6) Recent one year of reported net purchases of stock / current total float value, market cap or enterprise value greater than 15% of total
Some of the ideas were as follows
New Frontier Media Inc (NOOF) $1.43
Paragon Technologies (PTG) $2.54
PLX Technology (PLXT) $2.14
Frequency Electronics (FEIM) $2.58
Quotes on the above ideas
Additional financial data for the above ideas
I have a long position in NOOF
Using the “Financing Activities” section of the cash flow statement I reviewed the line item “sale or purchase of stock”. A negative indicates the expenditure of cash on share buybacks and positives would be the receipt of cash from the exercise price of options or the issuance of new shares. This may be obvious but I believe it’s an area that can provide new ideas as part of a more complete analysis.
My initial thought was to examine the past 4 reported quarters emphasizing the most recent quarterly activity. I took the amount expended on share buybacks as a percentage of the current market capitalization, enterprise value and the float value to gauge the relative magnitude. The first stock that appeared at the top of the list was HAMP.PK. Looked interesting given the stock purchases for the 3 month period ending 09/27/08 was 11,952,000. This amount was material considering the market cap of ~ 12 million on Monday February 23. They reduced the shares outstanding from 7,860,000 on 02/07 to 6,441,000 on 2/08. I was interested and wanted to take a closer look. Unfortunately I quickly discovered that on Tuesday (02/24/09) they received an all cash offer for $5.50 or a 190% premium from Monday’s(02/23/09) close at $1.85.
Lucky find, yes but I wanted to continue with the approach to see what else I may uncover. So I applied this method to over 4,000 companies. The financial sector was excluded and added the additional criteria below along with other decision making data.
1) Year over year share count reduction
2) Enterprise value less than 140% of market cap (a margin of safety measure)
3) Positive CFFO for current reported 12 month period
4) Share price > $1.00
5) Positive insider activity
6) Shares short as a percentage of float < 5%
6) Recent one year of reported net purchases of stock / current total float value, market cap or enterprise value greater than 15% of total
Some of the ideas were as follows
New Frontier Media Inc (NOOF) $1.43
Paragon Technologies (PTG) $2.54
PLX Technology (PLXT) $2.14
Frequency Electronics (FEIM) $2.58
Quotes on the above ideas
Additional financial data for the above ideas
I have a long position in NOOF
2/17/2009
Four Net Cash Bargains
This is just a follow up on the previous posting. I selected only 4 ideas and posted on SeekingAlpha.
Four Net Cash Bargains
The liquidation of Technology Solutions (TSCC) was a strong reminder of the profit potential for stocks trading for less than net cash (cash – total liabilities). TSCC was relatively illiquid and trading between a low of $1 and a high of $1.11 this year. Some days no shares were traded. But in my article on 02/09/09 "Exploiting Market Anomalies with Neglected Illiquid Stocks" I did speak on the topic of illiquid value stocks and believe it should not deter value investors.
On Tuesday, February 10, TSCC announced they would liquidate. TSCC closed at $2.18 this past Friday (02/13/09), up from the liquidation announcement date on Tuesday 02/11/09 at $1.06 for a +105% gain. This event got me thinking I should carefully search for other net cash bargains. I screened on many quantitative and qualitative factors coupled with net cash greater than current share price. These ideas were the most appealing net cash bargains
GSI Group Inc. (GSIG) had the largest percentage net cash over market price premium at 259.05% ($2.72/$1.05), positive insider activity with purchases significantly higher than current price. Royce Associates owns 10.88% of the outstanding shares as of 09/30/08. GSIG had the lowest ratio of SGA/Revenue (.2014) over the past 12 months. This ratio (I call the management greed ratio) can be useful when comparing to others in the same industry.
Forward Industries (FORD) had the only positive YOY quarterly revenue growth but margins have continued to decelerate. Operating margins were 23.79% (2005) and dropped to negative -8.34% (2008). The cash burn has been reasonable and their current liquidity is positive with a quick ratio of 10.08 and cash ratio of 8.29. Institutional investors Dan Zeff , Trinad Management and Barclays global investors have been reducing their positions. But in this market it could be the need to raise cash for redemptions.
Paragon Technologies Inc. (PTG) inside directors purchased 10,000 shares over the past 12 months at an average price of $5.20. Based on the reported holding as of 09/30/08, value institutions Microcapital owned 100,200 shares or 5.57%, Al Frank Asset Management 76,000 or 3.84%.
FortuNet (FNET) was the only company reporting positive operating income and cash flow from operations.
Additional decision making financial data
Disclosure: I don't have a position in any of the stocks mentioned. But I will consider purchases as part of a small basket of net cash bargains
Four Net Cash Bargains
The liquidation of Technology Solutions (TSCC) was a strong reminder of the profit potential for stocks trading for less than net cash (cash – total liabilities). TSCC was relatively illiquid and trading between a low of $1 and a high of $1.11 this year. Some days no shares were traded. But in my article on 02/09/09 "Exploiting Market Anomalies with Neglected Illiquid Stocks" I did speak on the topic of illiquid value stocks and believe it should not deter value investors.
On Tuesday, February 10, TSCC announced they would liquidate. TSCC closed at $2.18 this past Friday (02/13/09), up from the liquidation announcement date on Tuesday 02/11/09 at $1.06 for a +105% gain. This event got me thinking I should carefully search for other net cash bargains. I screened on many quantitative and qualitative factors coupled with net cash greater than current share price. These ideas were the most appealing net cash bargains
GSI Group Inc. (GSIG) had the largest percentage net cash over market price premium at 259.05% ($2.72/$1.05), positive insider activity with purchases significantly higher than current price. Royce Associates owns 10.88% of the outstanding shares as of 09/30/08. GSIG had the lowest ratio of SGA/Revenue (.2014) over the past 12 months. This ratio (I call the management greed ratio) can be useful when comparing to others in the same industry.
Forward Industries (FORD) had the only positive YOY quarterly revenue growth but margins have continued to decelerate. Operating margins were 23.79% (2005) and dropped to negative -8.34% (2008). The cash burn has been reasonable and their current liquidity is positive with a quick ratio of 10.08 and cash ratio of 8.29. Institutional investors Dan Zeff , Trinad Management and Barclays global investors have been reducing their positions. But in this market it could be the need to raise cash for redemptions.
Paragon Technologies Inc. (PTG) inside directors purchased 10,000 shares over the past 12 months at an average price of $5.20. Based on the reported holding as of 09/30/08, value institutions Microcapital owned 100,200 shares or 5.57%, Al Frank Asset Management 76,000 or 3.84%.
FortuNet (FNET) was the only company reporting positive operating income and cash flow from operations.
Additional decision making financial data
Disclosure: I don't have a position in any of the stocks mentioned. But I will consider purchases as part of a small basket of net cash bargains
2/14/2009
Cash Bargains
The liquidation of TSCC was a strong reminder of the profit potential for stocks trading below cash less total liabilities. TSCC was very illiquid and trading between a low of $1 and a high of $1.11 this year. Some days no shares were traded. On Tuesday, February 10 the company announced they would liquidate. TSCC closed at $2.18 this Friday (02/13/08) up from the liquidation announcement date on Tuesday 02/11/08 at 1.06 for a +100% gain.
I was a shareholder over a year ago and grew impatient in the belief that they would burn through all the cash. This event got me thinking I should search for other cash bargains in this risky market.
I screened on the following rules coupled with other factors such as avoiding negative insider activity.
* (cash – total liabilities)>price
* current outstanding share count versus the average share count over the past 4 years. The stock screened needed a 94% of the average 4 year count.
* sga/reveune < .80 one of my measures of managment greed
important financial data on the list below
Symbol Price
GSIG $1.05
JOB $0.24
TELK $0.40
TGIS $0.65
CALL $0.72
HLYS $1.78
FNET $1.50
TRID $1.53
PTG $2.42
FORD $1.78
PRLS $1.82
ADPT $2.51
Quotes on the above symbols
GSI Group, Inc (GSIG)
PRICE = $1.05
CASH+AR-TOTAL LIAB = $4.66 PER SHARE
SGA/REV 12months = .2014
NTA = $7.65 per share
Shares Outstanding/Average 4 years = .9940
Positive Insider Activity
GSI Group Gains Appeal on Activist Action
Major Holders
FORD (Forward Industries, Inc.) is the only one in the list reporting positive revenue growth for the YOY quarterly results. Now that is not an endorsement to purchase but they do have an interesting valuation. The revenue growth was 6.40% but margins were continuing accelerate down.
Institutional investors Dan Zeff ,Trinad Management and Barclays global investors
have been reducing their positions. But in this market it could also be the result of forced liquidation or the need to raise cash for redemptions. I have no idea.
From a cash bargain point of view the stock has a net cash position of $2.21per share versus the current price of $1.78. With 7,915,522 shares outstanding the value of 2.21 -1.78 = .43 in net cash premium or 3,403,674. So investors are immediately getting .43 per share to assume the risk of holding the stock. The gross margins have declined from 35.83% in 2005 to the current 20.17%. The only question will management sell, liquidate or reduce their SGA costs to return profitability. Operating margins were 23.79% (2005) and - negative 8.34% (2008). Cash burn has been reasonable and their liquidity is positive with a quick ratio of 10.08 and cash ratio of 8.29. So if this is part of a basket of other stocks selling below net cash the company looks like a reasonable bet if the position is part of a diversified portfolio and the position is built of weakness.
I will follow up with some more information but the current list has some interesting cash bargains
I have a position in JOB but unfortunately didn’t use my “greed factor” ratio, SGA/Revenue or review the golden parchute for the CEO.
I was a shareholder over a year ago and grew impatient in the belief that they would burn through all the cash. This event got me thinking I should search for other cash bargains in this risky market.
I screened on the following rules coupled with other factors such as avoiding negative insider activity.
* (cash – total liabilities)>price
* current outstanding share count versus the average share count over the past 4 years. The stock screened needed a 94% of the average 4 year count.
* sga/reveune < .80 one of my measures of managment greed
important financial data on the list below
Symbol Price
GSIG $1.05
JOB $0.24
TELK $0.40
TGIS $0.65
CALL $0.72
HLYS $1.78
FNET $1.50
TRID $1.53
PTG $2.42
FORD $1.78
PRLS $1.82
ADPT $2.51
Quotes on the above symbols
GSI Group, Inc (GSIG)
PRICE = $1.05
CASH+AR-TOTAL LIAB = $4.66 PER SHARE
SGA/REV 12months = .2014
NTA = $7.65 per share
Shares Outstanding/Average 4 years = .9940
Positive Insider Activity
GSI Group Gains Appeal on Activist Action
Major Holders
FORD (Forward Industries, Inc.) is the only one in the list reporting positive revenue growth for the YOY quarterly results. Now that is not an endorsement to purchase but they do have an interesting valuation. The revenue growth was 6.40% but margins were continuing accelerate down.
Institutional investors Dan Zeff ,Trinad Management and Barclays global investors
have been reducing their positions. But in this market it could also be the result of forced liquidation or the need to raise cash for redemptions. I have no idea.
From a cash bargain point of view the stock has a net cash position of $2.21per share versus the current price of $1.78. With 7,915,522 shares outstanding the value of 2.21 -1.78 = .43 in net cash premium or 3,403,674. So investors are immediately getting .43 per share to assume the risk of holding the stock. The gross margins have declined from 35.83% in 2005 to the current 20.17%. The only question will management sell, liquidate or reduce their SGA costs to return profitability. Operating margins were 23.79% (2005) and - negative 8.34% (2008). Cash burn has been reasonable and their liquidity is positive with a quick ratio of 10.08 and cash ratio of 8.29. So if this is part of a basket of other stocks selling below net cash the company looks like a reasonable bet if the position is part of a diversified portfolio and the position is built of weakness.
I will follow up with some more information but the current list has some interesting cash bargains
I have a position in JOB but unfortunately didn’t use my “greed factor” ratio, SGA/Revenue or review the golden parchute for the CEO.
2/10/2009
Syms: Hidden Values Buried on Balance Sheet
http://seekingalpha.com/article/119470-syms-hidden-values-buried-on-balance-sheet?source=wl_sidebar
Current Price = $5.95
Most investors know GAAP requires real estate to be recorded at its historical cost. Given real estate purchased many years ago is likely to have a fair market value materially higher than the historical cost, I decided to search companies for this hidden asset. Furthermore, my initial search was to buy these inefficiently priced real estate assets with companies that have an optimistic future evident by a sound balance sheet, cash flow and desirable products and services. The real estate market has been in what some would say a depression and for some properties liquidity can be near nonexistent at this time. But some of these outsized real estate holdings can provide an overlooked margin of safety.
The approach is relatively straight forward, but can often be overlooked especially on companies lacking Wall Street or financial press coverage. For this article I focus on just one idea as the material became too long. But I will try to introduce the other ideas in a follow up piece.
This idea is more of a real estate play because their existing business is distressed. SYMS (Syms Corp) is an off price apparel retailer known for their catchy sales pitch and trademarked slogans, "where an educated consumer is our best customer" and "The More You Know About Clothing, the Better it is for Syms". Some of us may remember their commercials.
There are many angles and what if analysis to this Ben Graham style stock, but in an effort to keep the article a reasonable length for this venue and also lean on an interesting observation Graham made in his latter years.
"I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities"
SYMS is 57% family controlled. Their valuable real estate holdings are potentially outstanding and the reward may far out weigh the risk of being a potential value trap. The stock could easily be worth twice the current net tangible asset value currently at $12.25 per share. Their first location was purchased in 1959 in the heart of the NYC financial district and is on the balance sheet for the original cost. This one NYC property out of an additional 22 owned locations may be worth far more than 100 million. Most of their real estate holdings were purchased a long time ago.
Esopus Creek Value controls 3.7% or about 8.76% of the non-controlled portion of the company. In their 4/22/08 13D filing they sent a letter to the independent board members noting that as a large minority holder they intend to examine the board more closely for their performance as fiduciaries. The letter also addresses the need for a full independent appraisal of the company's owned real estate and asks to make their conclusions pubic. Furthermore, a request was made to review the financial performance of all stores and where necessary, sell the property, lease or close the location. Their comments get even more interesting as they focus on the specific value of the 42 Trinity NYC location.
Some of their comments were as follows:
"And just to illustrate the enormous value that has yet to be unlocked by the Company, on April 17, 2008, just four days ago, New York City property records revealed that a nearby parcel located at 8 Stone St., having approximately 100,000 buildable square feet and the same zoning characteristics as 42 Trinity, sold for over $60 million to a hotel developer. This transaction equates to $600 per buildable square foot, thus implying a valuation for 42 Trinity at $102 million."
Some activist value funds believe management has demonstrated little concern for shareholders. This belief partially stems from the company's attempt to delist from the New York Stock exchange around December 2007 to gain a listing on the pink sheets. Minority shareholders stopped their attempt from a pink sheet listing. SYMS compromised and listed on the NASDAQ where it currently trades.
Syms quietly expanded its NYC real estate holdings and if they were successful in their pink sheet listing this information would not have been disclosed. In the April 25 annual report, Syms revealed the purchase of 16,500 square feet of air rights for its NYC 42Trinity flagship location for 3.1 million. The adjacent property was also purchased for 8 million. These two transactions may have increased the value of the Trinity location greater than the 102 million estimated by Esopus. Could Syms see value in doing something other than selling off price clothing at this location? So they paid 8 million for an adjacent building and 3 million for air rights. Are the purchased air rights to put an additional 16 floors of off priced clothing merchandise, including expanding operations to the new adjacent location in this difficult retail environment, hmmm?Further evidence of the potential value of their real estate holdings was recognized in 2006 when SYMS sold 2 locations in Rochester NY and Dallas Texas reporting a gain of 10,424,000. The company also owns stores in many prime locations such as
Miami, FL
West Palm Beach, FL
Cherry Hill, NJ
Westbury, CT
Commack Long Island NY
Ft. Lauderdale, FL
Paramus, NJ
Houston TX
Buffalo, NY
Secaucus, NJ
Fairfield, CT
Ft. Lauderdale, FL
Tampa, FL
Norcross, Georgia
Marrietta, Georgia
Addison, IL
Rockville, MD
Southfield, MI
Hurst, TX
King of Prussia, PA
Monroeville, PA
I went back to the 1995 10k and found all of these properties on the books. Prior to 1995, their 10k filings were on paper according to Edgar.
In my opinion, management's financial transactions indicate they believe the stock is significantly undervalued and desire to increase their percentage ownership. There is an active share repurchase program from minority shareholders. The annual cash flow statements from 03/2004 to 03/2008 reported $17,340,000 expended on net transactions for stock buybacks offset by money received from options exercised. The shares outstanding continue to drop from 16,362,000 for the period ending 05/22/2000 to the current amount of 14,590,000.
The potential opportunity of SYMS attracted famed contrarian value investor Michael Price. He owns about .97% of the total shares outstanding although he sold some of his original position. Irving Kahn, Loeb, Barrington and Espous have also recognized SYMS as an opportunity.
SYMS basic financial data
Per Share DataPrice = $7.33
EV = $8.54
NTA (Net Tangible Assets) = $12.28
Book Value = $13.018
Ratios
EBITDA/EV = 6.07%
CFFO/EV = 9.94%
EV/Sales = .48
Market Cap = 106.9Million
EV = 119.72 Million
Disclosure: I have a long position in SYMS
Current Price = $5.95
Most investors know GAAP requires real estate to be recorded at its historical cost. Given real estate purchased many years ago is likely to have a fair market value materially higher than the historical cost, I decided to search companies for this hidden asset. Furthermore, my initial search was to buy these inefficiently priced real estate assets with companies that have an optimistic future evident by a sound balance sheet, cash flow and desirable products and services. The real estate market has been in what some would say a depression and for some properties liquidity can be near nonexistent at this time. But some of these outsized real estate holdings can provide an overlooked margin of safety.
The approach is relatively straight forward, but can often be overlooked especially on companies lacking Wall Street or financial press coverage. For this article I focus on just one idea as the material became too long. But I will try to introduce the other ideas in a follow up piece.
This idea is more of a real estate play because their existing business is distressed. SYMS (Syms Corp) is an off price apparel retailer known for their catchy sales pitch and trademarked slogans, "where an educated consumer is our best customer" and "The More You Know About Clothing, the Better it is for Syms". Some of us may remember their commercials.
There are many angles and what if analysis to this Ben Graham style stock, but in an effort to keep the article a reasonable length for this venue and also lean on an interesting observation Graham made in his latter years.
"I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities"
SYMS is 57% family controlled. Their valuable real estate holdings are potentially outstanding and the reward may far out weigh the risk of being a potential value trap. The stock could easily be worth twice the current net tangible asset value currently at $12.25 per share. Their first location was purchased in 1959 in the heart of the NYC financial district and is on the balance sheet for the original cost. This one NYC property out of an additional 22 owned locations may be worth far more than 100 million. Most of their real estate holdings were purchased a long time ago.
Esopus Creek Value controls 3.7% or about 8.76% of the non-controlled portion of the company. In their 4/22/08 13D filing they sent a letter to the independent board members noting that as a large minority holder they intend to examine the board more closely for their performance as fiduciaries. The letter also addresses the need for a full independent appraisal of the company's owned real estate and asks to make their conclusions pubic. Furthermore, a request was made to review the financial performance of all stores and where necessary, sell the property, lease or close the location. Their comments get even more interesting as they focus on the specific value of the 42 Trinity NYC location.
Some of their comments were as follows:
"And just to illustrate the enormous value that has yet to be unlocked by the Company, on April 17, 2008, just four days ago, New York City property records revealed that a nearby parcel located at 8 Stone St., having approximately 100,000 buildable square feet and the same zoning characteristics as 42 Trinity, sold for over $60 million to a hotel developer. This transaction equates to $600 per buildable square foot, thus implying a valuation for 42 Trinity at $102 million."
Some activist value funds believe management has demonstrated little concern for shareholders. This belief partially stems from the company's attempt to delist from the New York Stock exchange around December 2007 to gain a listing on the pink sheets. Minority shareholders stopped their attempt from a pink sheet listing. SYMS compromised and listed on the NASDAQ where it currently trades.
Syms quietly expanded its NYC real estate holdings and if they were successful in their pink sheet listing this information would not have been disclosed. In the April 25 annual report, Syms revealed the purchase of 16,500 square feet of air rights for its NYC 42Trinity flagship location for 3.1 million. The adjacent property was also purchased for 8 million. These two transactions may have increased the value of the Trinity location greater than the 102 million estimated by Esopus. Could Syms see value in doing something other than selling off price clothing at this location? So they paid 8 million for an adjacent building and 3 million for air rights. Are the purchased air rights to put an additional 16 floors of off priced clothing merchandise, including expanding operations to the new adjacent location in this difficult retail environment, hmmm?Further evidence of the potential value of their real estate holdings was recognized in 2006 when SYMS sold 2 locations in Rochester NY and Dallas Texas reporting a gain of 10,424,000. The company also owns stores in many prime locations such as
Miami, FL
West Palm Beach, FL
Cherry Hill, NJ
Westbury, CT
Commack Long Island NY
Ft. Lauderdale, FL
Paramus, NJ
Houston TX
Buffalo, NY
Secaucus, NJ
Fairfield, CT
Ft. Lauderdale, FL
Tampa, FL
Norcross, Georgia
Marrietta, Georgia
Addison, IL
Rockville, MD
Southfield, MI
Hurst, TX
King of Prussia, PA
Monroeville, PA
I went back to the 1995 10k and found all of these properties on the books. Prior to 1995, their 10k filings were on paper according to Edgar.
In my opinion, management's financial transactions indicate they believe the stock is significantly undervalued and desire to increase their percentage ownership. There is an active share repurchase program from minority shareholders. The annual cash flow statements from 03/2004 to 03/2008 reported $17,340,000 expended on net transactions for stock buybacks offset by money received from options exercised. The shares outstanding continue to drop from 16,362,000 for the period ending 05/22/2000 to the current amount of 14,590,000.
The potential opportunity of SYMS attracted famed contrarian value investor Michael Price. He owns about .97% of the total shares outstanding although he sold some of his original position. Irving Kahn, Loeb, Barrington and Espous have also recognized SYMS as an opportunity.
SYMS basic financial data
Per Share DataPrice = $7.33
EV = $8.54
NTA (Net Tangible Assets) = $12.28
Book Value = $13.018
Ratios
EBITDA/EV = 6.07%
CFFO/EV = 9.94%
EV/Sales = .48
Market Cap = 106.9Million
EV = 119.72 Million
Disclosure: I have a long position in SYMS
2/03/2009
Exploiting Market Anomalies with Neglected Illiquid Stocks
http://seekingalpha.com/article/117964-exploiting-market-anomalies-with-neglected-illiquid-stocks?source=wl_sidebar
The market continues to indiscriminately sell stocks. But in 2008, micro cap value took one of the biggest hits compared to other investment categories.
I occasionally like to remind myself of something Benjamin Graham said:
"It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and that he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment."
Graham’s thoughts on this topic can help build a profitable diversified portfolio of value micro cap ideas. Unfortunately, these deep value micro cap stocks can also be illiquid at times. But that should not deter serious value investors. Building or selling a position requires patience if maximum profits are to be realized. We all know millions of investors are speculating and investing billions of dollars chasing liquid stocks. Logic would conclude that the potential to find extraordinary bargains with illiquid stocks are significantly higher. Exploiting market anomalies with ignored and neglected illiquid stocks can be one of the best ways to realize outsized gains. This approach can create a significant advantage for the individual investor as most institutions can’t fully participate.
I considered many factors when compiling this list. Although some of the most attractive values were below $1 per share, I had to ignore for this article due to SeekingAlpha’s restrictions. Financial measures were compiled, considered in combination and compared to other competitors such as
Dilution as measured by TTM Shares Outstanding/ 4 year average >.99
Enterprise value/Market Cap <1.10>1
Insider activity that has avoided selling at or near the current price
ROIC, ROE in combination with other attributes
Cash and total debt per share
Capital Structure
And others including those in the below list of ideas
http://www.shadowstock.com/ss_article020309.html
Disclosure: I have a long position in PRCP, DAIO, ARKR and no position in any of the other stocks in this article
The market continues to indiscriminately sell stocks. But in 2008, micro cap value took one of the biggest hits compared to other investment categories.
I occasionally like to remind myself of something Benjamin Graham said:
"It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and that he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment."
Graham’s thoughts on this topic can help build a profitable diversified portfolio of value micro cap ideas. Unfortunately, these deep value micro cap stocks can also be illiquid at times. But that should not deter serious value investors. Building or selling a position requires patience if maximum profits are to be realized. We all know millions of investors are speculating and investing billions of dollars chasing liquid stocks. Logic would conclude that the potential to find extraordinary bargains with illiquid stocks are significantly higher. Exploiting market anomalies with ignored and neglected illiquid stocks can be one of the best ways to realize outsized gains. This approach can create a significant advantage for the individual investor as most institutions can’t fully participate.
I considered many factors when compiling this list. Although some of the most attractive values were below $1 per share, I had to ignore for this article due to SeekingAlpha’s restrictions. Financial measures were compiled, considered in combination and compared to other competitors such as
Dilution as measured by TTM Shares Outstanding/ 4 year average >.99
Enterprise value/Market Cap <1.10>1
Insider activity that has avoided selling at or near the current price
ROIC, ROE in combination with other attributes
Cash and total debt per share
Capital Structure
And others including those in the below list of ideas
http://www.shadowstock.com/ss_article020309.html
Disclosure: I have a long position in PRCP, DAIO, ARKR and no position in any of the other stocks in this article
1/28/2009
Ark Restaurants Corp: An Enviable Economic Moat
Ark Restaurants Corp (ARKR) has evolved over its 25 years toward being one of the best, if not the best, shareholder-friendly restaurants. CEO Mike Weinstein was an investment banker before creating the publicly traded Ark Restaurants. The CEO’s leadership can be credited for its successful management team and outstanding capital allocation.
The company has a wide range of restaurant styles without a single identifiable concept. CEO Mike Weinstein has stated "I don't know how to build brand equity and don't want to". ARKR currently has 20 full scale restaurants with chefs and executive chefs, 30 fast food themes, catering operations and wholesale / retail bakeries. Its upscale restaurants are stylishly designed at landmark locations, including Bryant Park Grill located behind the New York Public Library, the Grill Room with majestic views of the Hudson, 1000 seat Sequoia along the banks of Washington D.C.'s Potomac River, Gallagher’s Steakhouse located at Resort Hotel and Casino in Atlantic City, and others.
Management is not complacent and will quickly close an establishment or ask the landlord for concessions if the location is not generating positive store level operating cash flows. Based on its pristine and conservatively managed balance sheet, the company is reluctant to place large amounts of shareholders capital at risk. Mike Weinstein and team further enhance shareholder value by weighing the benefits of share buybacks, dividends, and the long term profit generating opportunities from investing in a new restaurant. Given the current economic conditions, the company continues to perform well but recently made the decision to suspend the dividend as it sees better use of the cash. The company has a good cash position and if it was complacent could easily fund the existing dividend and avoid the challenging task of optimizing the allocation of shareholder capital.
The restaurant environment is difficult now, but it’s encouraging to hear management state there “will be some wonderful opportunities”. Having cash on its balance sheet with outstanding cash flow and credit availability will help create an advantage when negotiating or finding new deals. Mike Weinstein (CEO) has stated “If something comes our way that is a fat softball coming across the plate, we will take a swing at it but nothing else.” The CEO’s insightful response to an analyst’s pressure about additional share buybacks highlights some of the reasons to align your capital with ARKR management. His response was as follows:
"The question is always if you buy back your own stock, is it creating value for shareholders? Without a question, it is creating value. Is there more value in finding something that gives you a fairly good flow of income for 10, 15 years as opposed to buying stock, buying somebody else’s operation with the cash flow is significant and recurring and reliable. That’s what we are looking for. If we can’t, we will buy more stock. And by the way, one doesn’t preclude the other. If the shares are attractive in terms of where we think they are attractive, we will buy more stock if it comes in."
ARKR fits the criteria set by several respected value investors; Joel Greenblatt (high ROIC coupled with a high earnings yield, Kenneth Fisher (low P/S), James P. O'Shaughnessy (value with growth) and others. Let’s take a closer look.
Earnings Yield and related measures; “Favorable” rankings out of 55 restaurants
EBITDA/EV = 3.69/12.29 = 30.02% (1st Favorable)
CFFO/EV = 3.25/12.29 = 30.90%
OI/EV = 3.08/12.29 = 25.06% (1st Favorable)
FCF/EV = .94/12.29 = 7.65% (4th Favorable)
CFFO/NI = 3.25/2.16 = 1.50%
Out of 55 companies I reviewed in the restaurant industry, ARKR has the highest EBITDA/EV at 30.02% with consistent high quality of reported earnings evidenced by the supporting cash flow from operations, CFFO/NI = 3.25/2.16 = 1.50%. Couple the bargain price with a high return on capital and the stock is screaming "I’m a well managed company selling for a bargain." ROA (return on assets) will help measure return on capital. ARKR is near the top or about number 6 out of 55. The four year average is consistent at 15.59%. The after tax ROIC tells the same story and averages 18.61% over the same 4 year period.
Joel Greenblatt uses a combination of earnings yield and return on capital to rank companies to filter potential investments for further research. His book “The Little Book that Beats the Market” is based on this concept. I took the earnings yield and ROIC for all 55 restaurant stocks and applied Mr Greenblatt’s ideas and ARKR was ranked number one. NATH (Nathans) made the number two position.
Kenneth Fisher is credited for emphasizing the price to sales ratio as a useful forecasting tool. ARKR ranks as number 5 out of 55 for the best EV/Sales ratio. The top 4 may have slightly better P/S measures but there balance sheets were weak. Furthermore the P/S ratio for ARKR when compared to the last 4 years has improved significantly from an average 4 year P/S over .80 to the current .30. James P. O'Shaughnessy did his own research and concluded that the strongest and best indicator of solid appreciation in stocks were low PSR's (Price-to-Sales Ratios) which was first emphasized by Ken Fisher in Super Stocks. Mr Fisher no longer believes this ratio deserves the weighting he gave in the past.
It’s not immediately evident but ARKR has an enviable economic moat and this thought is supported by their consistent high ROIC. Management has developed the ability to handle complex operations which include negotiating and attracting developers on new projects, serving thousands of high quality meals daily, and even improve existing establishments with small amounts of capital by making minor changes.
The above positive attribute is even further enhanced by the YOY quarterly 6.90% revenue growth. There are virtually no shares short or a change in shares outstanding since 2004.
Value Institutions holding shares with their balance reported as of 10/01/08:
LOEB ARBITRAGE MANAGEMENT INC. 7.99% (recently selling)
ROYCE 4.74% (recently increasing position to 5.07%)
PRIDE CAPITAL PARTNERS 10.66%
FIDELITY LOW-PRICED STOCK FUND 4.66% (recently increasing position to 5.35%)
Positive Insider Activity over past 12 months: 18,315 shares purchased directly for 248,242 at a average price of 13.55; 6,350 shares purchased indirectly at average price of 13.29.
Catalysts
Institutional recognition of the deep value and future earnings opportunities
Accretive acquisitions opportunities to fuel future growth
Additional share buybacks
Takeover target
Reinstate dividend
Mean reversion; 210% off 52 week high, -65% 52 week return
Risks
Exposure to the New York high end restaurant market that could impact overall results as the financial sector job losses are realized coupled with cancelled parties and client entertainment
Rising food prices and a reversal of reasonable gas prices
Forced institutional selling
Sharp decline in tourism from the worldwide recession and weak foreign currency exchange rates for the Pound and Euro
Reduced domestic travel and spending to casinos located in Vegas, Foxwoods, and Atlantic City where ARKR has restaurants
Conclusion
In summary, there are potential short term risks to the stock price but I believe even now the shares are attractive. I will use further weakness to add to my existing position. Mike Weinstein and his team have proven they can take a business with low barriers to entry and create an economic moat. A restaurant that can post 18.46% after tax ROIC since 2004 has proven they have an advantage that few others in the same industry can match.
The potential acquisition opportunities in this economy will play into the hands of a well capitalized and experienced management team. Even if those opportunities don’t present themselves I believe share buybacks will increase if the stock weakens. So at this time it’s the high earnings yield combined with a consistently high ROIC, quality earnings, low P/S, insider buying, top line growth, ownership held by quality value institutions at higher prices, no dilution, virtually no shares short, mean reversion and an outstanding proven shareholder friendly management that makes ARKR attractive.
Additional Valuation Measures
Price = 10.90
PER Share Values
Price = 10.90
EV = 12.04
Sales = 35.77
GP = 12.36
EBITDA = 3.69
Operating Income = 3.08
NI = 2.16
CFFO = 3.25
FCF = .94
AR = 1.19
Cash = .85
Total Liabilities = 4.64
Market Cap = 39.22 million
EV = 42.019 million
Share outstanding = 3.49 Million
No dilution as the amount is virtually unchanged from 2004.
Industry Rankings out of 55 restaurants
EV/Rev = 12.04/32.92 = 36.57% (5th Favorable)
EV/MC = 12.04/11.24 = 1.07 (4th Favorable)
OI/EV = 3.08/12.04 = 25.58% (1st Favorable)
GP/EV = 12.36/12.04 = 1.0266 (2nd Favorable)
FCF/EV = .94/12.04 = 7.81%
EBITDA/EV = 3.69/12.04 = 30.65% (1st Favorable)
NI/EV = 2.16/12.04 =17.94% (2nd Favorable)
EV/NI = 12.04/2.16 = 5.57 (2nd Favorable)
52 week change = -65.16%
52 low = 7.92
52 High = 34.59
Disclosure: I have a long position in ARKR.
The company has a wide range of restaurant styles without a single identifiable concept. CEO Mike Weinstein has stated "I don't know how to build brand equity and don't want to". ARKR currently has 20 full scale restaurants with chefs and executive chefs, 30 fast food themes, catering operations and wholesale / retail bakeries. Its upscale restaurants are stylishly designed at landmark locations, including Bryant Park Grill located behind the New York Public Library, the Grill Room with majestic views of the Hudson, 1000 seat Sequoia along the banks of Washington D.C.'s Potomac River, Gallagher’s Steakhouse located at Resort Hotel and Casino in Atlantic City, and others.
Management is not complacent and will quickly close an establishment or ask the landlord for concessions if the location is not generating positive store level operating cash flows. Based on its pristine and conservatively managed balance sheet, the company is reluctant to place large amounts of shareholders capital at risk. Mike Weinstein and team further enhance shareholder value by weighing the benefits of share buybacks, dividends, and the long term profit generating opportunities from investing in a new restaurant. Given the current economic conditions, the company continues to perform well but recently made the decision to suspend the dividend as it sees better use of the cash. The company has a good cash position and if it was complacent could easily fund the existing dividend and avoid the challenging task of optimizing the allocation of shareholder capital.
The restaurant environment is difficult now, but it’s encouraging to hear management state there “will be some wonderful opportunities”. Having cash on its balance sheet with outstanding cash flow and credit availability will help create an advantage when negotiating or finding new deals. Mike Weinstein (CEO) has stated “If something comes our way that is a fat softball coming across the plate, we will take a swing at it but nothing else.” The CEO’s insightful response to an analyst’s pressure about additional share buybacks highlights some of the reasons to align your capital with ARKR management. His response was as follows:
"The question is always if you buy back your own stock, is it creating value for shareholders? Without a question, it is creating value. Is there more value in finding something that gives you a fairly good flow of income for 10, 15 years as opposed to buying stock, buying somebody else’s operation with the cash flow is significant and recurring and reliable. That’s what we are looking for. If we can’t, we will buy more stock. And by the way, one doesn’t preclude the other. If the shares are attractive in terms of where we think they are attractive, we will buy more stock if it comes in."
ARKR fits the criteria set by several respected value investors; Joel Greenblatt (high ROIC coupled with a high earnings yield, Kenneth Fisher (low P/S), James P. O'Shaughnessy (value with growth) and others. Let’s take a closer look.
Earnings Yield and related measures; “Favorable” rankings out of 55 restaurants
EBITDA/EV = 3.69/12.29 = 30.02% (1st Favorable)
CFFO/EV = 3.25/12.29 = 30.90%
OI/EV = 3.08/12.29 = 25.06% (1st Favorable)
FCF/EV = .94/12.29 = 7.65% (4th Favorable)
CFFO/NI = 3.25/2.16 = 1.50%
Out of 55 companies I reviewed in the restaurant industry, ARKR has the highest EBITDA/EV at 30.02% with consistent high quality of reported earnings evidenced by the supporting cash flow from operations, CFFO/NI = 3.25/2.16 = 1.50%. Couple the bargain price with a high return on capital and the stock is screaming "I’m a well managed company selling for a bargain." ROA (return on assets) will help measure return on capital. ARKR is near the top or about number 6 out of 55. The four year average is consistent at 15.59%. The after tax ROIC tells the same story and averages 18.61% over the same 4 year period.
Joel Greenblatt uses a combination of earnings yield and return on capital to rank companies to filter potential investments for further research. His book “The Little Book that Beats the Market” is based on this concept. I took the earnings yield and ROIC for all 55 restaurant stocks and applied Mr Greenblatt’s ideas and ARKR was ranked number one. NATH (Nathans) made the number two position.
Kenneth Fisher is credited for emphasizing the price to sales ratio as a useful forecasting tool. ARKR ranks as number 5 out of 55 for the best EV/Sales ratio. The top 4 may have slightly better P/S measures but there balance sheets were weak. Furthermore the P/S ratio for ARKR when compared to the last 4 years has improved significantly from an average 4 year P/S over .80 to the current .30. James P. O'Shaughnessy did his own research and concluded that the strongest and best indicator of solid appreciation in stocks were low PSR's (Price-to-Sales Ratios) which was first emphasized by Ken Fisher in Super Stocks. Mr Fisher no longer believes this ratio deserves the weighting he gave in the past.
It’s not immediately evident but ARKR has an enviable economic moat and this thought is supported by their consistent high ROIC. Management has developed the ability to handle complex operations which include negotiating and attracting developers on new projects, serving thousands of high quality meals daily, and even improve existing establishments with small amounts of capital by making minor changes.
The above positive attribute is even further enhanced by the YOY quarterly 6.90% revenue growth. There are virtually no shares short or a change in shares outstanding since 2004.
Value Institutions holding shares with their balance reported as of 10/01/08:
LOEB ARBITRAGE MANAGEMENT INC. 7.99% (recently selling)
ROYCE 4.74% (recently increasing position to 5.07%)
PRIDE CAPITAL PARTNERS 10.66%
FIDELITY LOW-PRICED STOCK FUND 4.66% (recently increasing position to 5.35%)
Positive Insider Activity over past 12 months: 18,315 shares purchased directly for 248,242 at a average price of 13.55; 6,350 shares purchased indirectly at average price of 13.29.
Catalysts
Institutional recognition of the deep value and future earnings opportunities
Accretive acquisitions opportunities to fuel future growth
Additional share buybacks
Takeover target
Reinstate dividend
Mean reversion; 210% off 52 week high, -65% 52 week return
Risks
Exposure to the New York high end restaurant market that could impact overall results as the financial sector job losses are realized coupled with cancelled parties and client entertainment
Rising food prices and a reversal of reasonable gas prices
Forced institutional selling
Sharp decline in tourism from the worldwide recession and weak foreign currency exchange rates for the Pound and Euro
Reduced domestic travel and spending to casinos located in Vegas, Foxwoods, and Atlantic City where ARKR has restaurants
Conclusion
In summary, there are potential short term risks to the stock price but I believe even now the shares are attractive. I will use further weakness to add to my existing position. Mike Weinstein and his team have proven they can take a business with low barriers to entry and create an economic moat. A restaurant that can post 18.46% after tax ROIC since 2004 has proven they have an advantage that few others in the same industry can match.
The potential acquisition opportunities in this economy will play into the hands of a well capitalized and experienced management team. Even if those opportunities don’t present themselves I believe share buybacks will increase if the stock weakens. So at this time it’s the high earnings yield combined with a consistently high ROIC, quality earnings, low P/S, insider buying, top line growth, ownership held by quality value institutions at higher prices, no dilution, virtually no shares short, mean reversion and an outstanding proven shareholder friendly management that makes ARKR attractive.
Additional Valuation Measures
Price = 10.90
PER Share Values
Price = 10.90
EV = 12.04
Sales = 35.77
GP = 12.36
EBITDA = 3.69
Operating Income = 3.08
NI = 2.16
CFFO = 3.25
FCF = .94
AR = 1.19
Cash = .85
Total Liabilities = 4.64
Market Cap = 39.22 million
EV = 42.019 million
Share outstanding = 3.49 Million
No dilution as the amount is virtually unchanged from 2004.
Industry Rankings out of 55 restaurants
EV/Rev = 12.04/32.92 = 36.57% (5th Favorable)
EV/MC = 12.04/11.24 = 1.07 (4th Favorable)
OI/EV = 3.08/12.04 = 25.58% (1st Favorable)
GP/EV = 12.36/12.04 = 1.0266 (2nd Favorable)
FCF/EV = .94/12.04 = 7.81%
EBITDA/EV = 3.69/12.04 = 30.65% (1st Favorable)
NI/EV = 2.16/12.04 =17.94% (2nd Favorable)
EV/NI = 12.04/2.16 = 5.57 (2nd Favorable)
52 week change = -65.16%
52 low = 7.92
52 High = 34.59
Disclosure: I have a long position in ARKR.
Recession resistant: U.S. Physical Therapy (USPH)
http://seekingalpha.com/article/115252-u-s-physical-therapy-recession-resistant
Okay, not recession proof but USPH is a recession resistant health care service provider. USPH has an outstanding financial position with 35 million of an unused credit line, consistent stable free cash flow, and a proven management team that will enable it to continue expanding market share by exploiting the current lower multiples on overlooked smaller accretive competitors. U.S. Physical Therapy, Inc operates 349 outpatient physical and/or occupational therapy clinics in 42 states representing about 7% of this highly fragmented industry. From a macro point of view the long term economics of physical/occupational therapy can only improve with aging baby boomers and a country in less than perfect physical health.
The consistently high ROE currently at 14.10% screams out well managed company and the high earnings yield of 17.50% (EBITDA/EV) is proof of a bargain stock price. A sound capital structure is also contributing to the high and consistent ROE. Shares outstanding are basically flat over the past 4years at 11.96 million shares and proof of a shareholder friendly management. The recent quarter reported significant top and bottom line improvements. Comparative third quarter 2008 results versus Q3 2007 improved with revenues +26% to 47.20 million, net income +19%, same store revenues + 3.40%, same store visits +2.80% offset with a .01 EPS negative impact from Hurricane Ike.
Additional indications of value
Proven value institutions holding USPH; % of TSO (total shares outstanding) with Royce & Associates 12.71%, FMR LLC 4.48%,O’Shaughnessy Asset Management 4.71%, shares acquired at higher than current prices.
Key insider buys with CFO purchasing 2000 shares on the open market (11/10/08) for $13.60 and 1000 for $9.61 on 11/21/08.
EBITDA/EV =2.50/14.28 = 17.50%
CFFO/EV = 2.29/14.28 = 16.03%
CFFO/MC =2.29/12.38 =18.49%
EV/NI = 14.28/.857 =16.66%
FCF/EV = 1.93/14.28 = 13.51%
FCF/MC = 1.93/12.38 =15.58 %
CFFO/NI = 2.29/.857 = 2.67%
The above indicates the high quality of earnings yieldROA TTM = 14.31 ;ROA 4 yr average = 11.25
Consistent productive use of assets as measured by ROAUSPH ranks near the top for this measure in the specialized health care industry
Share count average past 4 years = 11.60 millionShare count TTM = 11.96 million
No dilution indicating a priority for shareholder value
P/S (Price/Sales) average over the past 4 years = 1.28
P/S TTM = .76
P/B (Price/Book) average over the past 4 years = 3
P/B TTM = 1.87
Both price to sales and price to book are selling at historical discounts
Per share data
Current Price $12.38
EV = $14.28
52 low = $9.00
52 high = $21.00
CFFO = $2.29
FCF = $.1.93
EBITDA = $2.50
NI = $.857
Cash = $.765
A/R = $2.33
To summarize, as I stated above U.S. Physical Therapy is well managed and selling at a discount. I believe this opinion is further supported by significant ownership held by proven value institutions, recent key insider open market buys, quality of reported earnings indicated by the strong free cash flow, low capital requirements to run and grow the business , potential customer demographics growing , an economic moat evidenced by a high and consistent ROE, high earnings yield supported by ample free cash flow, discounted valuations based on P/S and P/B compared to historical measures, A+ balance sheet , selling significantly off historical highs ,very few shares sold short and double digit growth.
Risks
Long lasting deep recession
Reduced insurance coverage driven by companies implementing cost savings
Government changes in covered health care procedures
DisclosureI own shares of USPH
Okay, not recession proof but USPH is a recession resistant health care service provider. USPH has an outstanding financial position with 35 million of an unused credit line, consistent stable free cash flow, and a proven management team that will enable it to continue expanding market share by exploiting the current lower multiples on overlooked smaller accretive competitors. U.S. Physical Therapy, Inc operates 349 outpatient physical and/or occupational therapy clinics in 42 states representing about 7% of this highly fragmented industry. From a macro point of view the long term economics of physical/occupational therapy can only improve with aging baby boomers and a country in less than perfect physical health.
The consistently high ROE currently at 14.10% screams out well managed company and the high earnings yield of 17.50% (EBITDA/EV) is proof of a bargain stock price. A sound capital structure is also contributing to the high and consistent ROE. Shares outstanding are basically flat over the past 4years at 11.96 million shares and proof of a shareholder friendly management. The recent quarter reported significant top and bottom line improvements. Comparative third quarter 2008 results versus Q3 2007 improved with revenues +26% to 47.20 million, net income +19%, same store revenues + 3.40%, same store visits +2.80% offset with a .01 EPS negative impact from Hurricane Ike.
Additional indications of value
Proven value institutions holding USPH; % of TSO (total shares outstanding) with Royce & Associates 12.71%, FMR LLC 4.48%,O’Shaughnessy Asset Management 4.71%, shares acquired at higher than current prices.
Key insider buys with CFO purchasing 2000 shares on the open market (11/10/08) for $13.60 and 1000 for $9.61 on 11/21/08.
EBITDA/EV =2.50/14.28 = 17.50%
CFFO/EV = 2.29/14.28 = 16.03%
CFFO/MC =2.29/12.38 =18.49%
EV/NI = 14.28/.857 =16.66%
FCF/EV = 1.93/14.28 = 13.51%
FCF/MC = 1.93/12.38 =15.58 %
CFFO/NI = 2.29/.857 = 2.67%
The above indicates the high quality of earnings yieldROA TTM = 14.31 ;ROA 4 yr average = 11.25
Consistent productive use of assets as measured by ROAUSPH ranks near the top for this measure in the specialized health care industry
Share count average past 4 years = 11.60 millionShare count TTM = 11.96 million
No dilution indicating a priority for shareholder value
P/S (Price/Sales) average over the past 4 years = 1.28
P/S TTM = .76
P/B (Price/Book) average over the past 4 years = 3
P/B TTM = 1.87
Both price to sales and price to book are selling at historical discounts
Per share data
Current Price $12.38
EV = $14.28
52 low = $9.00
52 high = $21.00
CFFO = $2.29
FCF = $.1.93
EBITDA = $2.50
NI = $.857
Cash = $.765
A/R = $2.33
To summarize, as I stated above U.S. Physical Therapy is well managed and selling at a discount. I believe this opinion is further supported by significant ownership held by proven value institutions, recent key insider open market buys, quality of reported earnings indicated by the strong free cash flow, low capital requirements to run and grow the business , potential customer demographics growing , an economic moat evidenced by a high and consistent ROE, high earnings yield supported by ample free cash flow, discounted valuations based on P/S and P/B compared to historical measures, A+ balance sheet , selling significantly off historical highs ,very few shares sold short and double digit growth.
Risks
Long lasting deep recession
Reduced insurance coverage driven by companies implementing cost savings
Government changes in covered health care procedures
DisclosureI own shares of USPH
1/10/2009
Neglected and Ignored; DWCH
http://seekingalpha.com/article/113168-datawatch-a-microcap-value-stock
Datawatch is a micro cap (7.10 million market cap) that provides business intelligence software solutions for the desktop and enterprise. More than 20,000 companies and government agencies worldwide including most of the Fortune 100 benefit from their various software solutions. The firm is best recognized for Monarch software which has sold in excess of 400,000 registered copies. Their software is available in multiple languages including German, French, and Spanish. At this time approximately 38% of the company’s revenues are derived overseas.
Over the past few years the company has reinvested with the support of their solid cash flow to expand and strengthen their existing presence in other higher ticket enterprise data analytic solutions. The company has already completed a successful strategic shift to focus on more profitable enterprise solutions using their internationally popular Monarch technology as the engine.
Per share data
Price = $1.20
Cash = $.83
Total Liabilities= $1.38
Revenue = $4.16
Operating Income = $.18
Gross Profit = $3.02
CFFO(12months) = $.50
FCF(12 months) = $.46
Ratios
P/S = .30The P/S ratio is selling at a discount compared to prior years
OI/EV = .10
EBITDA/MC = 19.21%
CFFO/NI = 2.35
EV/NI = 15.39
P/NI=10
FCF/MC = 22.14%
CFFO/MC = 25.90%
Comparable company valuations
Several years ago the only comparable product that has most directly competed with DWCH’s Monarch software was from a company called Data Junction. Data Junction sold Cambio to replicate some of the functionality of Monarch to mine data from disparte text data sources. To make a long story short Monarch is far more capable, popular and functionally rich with the ability to mine data from PDF,XPS, HTML, MDB,XLS and other popular sources of data. I’ve used both of the company’s products a can testify to the superiority of Datawatch’s Monarch.
April 2003, Pervasive software saw the potential of Data Junctions report mining software and purchased Data Junction for 22.1 million in cash and 5 million shares of PVSW (Pervasive) stock . The transaction was valued at a total of approximately $51.7 million, based upon Pervasive's closing price per share of $5.91 on August 8, 2003. At the time of the purchase Data Junction had “more than 25,000 customers”. Datawatch’s desktop Monarch currently has over 400,000 growing license users worldwide. The Datawatch story with their other rapidly growing BI solutions make the current and future valuation significantly greater than the grossly undervalued price of 1.20 or 7.10 million market cap.
Another important valuation comparison is with Mobius (MOBI ) . Back on April 11, 2007, MOBI accepted an offer from the privately held Allen Systems Group for $10.05 cash per share. The total value of the offer was about 195 million. Mobius resells the Datawatch data analytics product, Monarch, under the Mobius product name DocuAnalyzer. Datawatch now competes with Mobius on larger BI enterprise solutions. Based on just a price to sales basis DWCH would be valued at a multiple times the current price when compared to the MOBI all cash deal for $10.05. MOBI was sold for about 2.0 time sales. When compared to Datawach’s current .3 price to sales. I strongly believe DWCH is temporarily selling at depressed prices with a loyal evangelical like customer base.
The major risks for DWCH are the world wide recession coupled with lack of Wall Street coverage. But there are several catalysts that may move the stock higher.
Catalyst:
- Older versions of Monarch will not be compatible with Vista. Some of their 400,000 customers will be forced to upgrade to version 9 or 10 if their company or personal computer is using Vista coupled with the significantly improved functionality.
- A new CEO was put in place about a year ago with a proven track record selling large enterprise solutions with higher margins and recurring revenue steams from their new proven enterprise BI solutions.
- Investment community recognizing the value based on sustainable high FCF and depth and bright prospects of product offerings.
- New product upgrade Monarch version 10 just released in this current quarter.
- International recognition of the significant cost benefit of using Datawatch technologies with no comparative value solution. Furthermore, Datatwatch recently embarked on a re-branding effort communicating their new focus on more profitable enterprise solutions.
I own a small amount of DWCH as part of well diversified portfolio
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Datawatch is a micro cap (7.10 million market cap) that provides business intelligence software solutions for the desktop and enterprise. More than 20,000 companies and government agencies worldwide including most of the Fortune 100 benefit from their various software solutions. The firm is best recognized for Monarch software which has sold in excess of 400,000 registered copies. Their software is available in multiple languages including German, French, and Spanish. At this time approximately 38% of the company’s revenues are derived overseas.
Over the past few years the company has reinvested with the support of their solid cash flow to expand and strengthen their existing presence in other higher ticket enterprise data analytic solutions. The company has already completed a successful strategic shift to focus on more profitable enterprise solutions using their internationally popular Monarch technology as the engine.
Per share data
Price = $1.20
Cash = $.83
Total Liabilities= $1.38
Revenue = $4.16
Operating Income = $.18
Gross Profit = $3.02
CFFO(12months) = $.50
FCF(12 months) = $.46
Ratios
P/S = .30The P/S ratio is selling at a discount compared to prior years
OI/EV = .10
EBITDA/MC = 19.21%
CFFO/NI = 2.35
EV/NI = 15.39
P/NI=10
FCF/MC = 22.14%
CFFO/MC = 25.90%
Comparable company valuations
Several years ago the only comparable product that has most directly competed with DWCH’s Monarch software was from a company called Data Junction. Data Junction sold Cambio to replicate some of the functionality of Monarch to mine data from disparte text data sources. To make a long story short Monarch is far more capable, popular and functionally rich with the ability to mine data from PDF,XPS, HTML, MDB,XLS and other popular sources of data. I’ve used both of the company’s products a can testify to the superiority of Datawatch’s Monarch.
April 2003, Pervasive software saw the potential of Data Junctions report mining software and purchased Data Junction for 22.1 million in cash and 5 million shares of PVSW (Pervasive) stock . The transaction was valued at a total of approximately $51.7 million, based upon Pervasive's closing price per share of $5.91 on August 8, 2003. At the time of the purchase Data Junction had “more than 25,000 customers”. Datawatch’s desktop Monarch currently has over 400,000 growing license users worldwide. The Datawatch story with their other rapidly growing BI solutions make the current and future valuation significantly greater than the grossly undervalued price of 1.20 or 7.10 million market cap.
Another important valuation comparison is with Mobius (MOBI ) . Back on April 11, 2007, MOBI accepted an offer from the privately held Allen Systems Group for $10.05 cash per share. The total value of the offer was about 195 million. Mobius resells the Datawatch data analytics product, Monarch, under the Mobius product name DocuAnalyzer. Datawatch now competes with Mobius on larger BI enterprise solutions. Based on just a price to sales basis DWCH would be valued at a multiple times the current price when compared to the MOBI all cash deal for $10.05. MOBI was sold for about 2.0 time sales. When compared to Datawach’s current .3 price to sales. I strongly believe DWCH is temporarily selling at depressed prices with a loyal evangelical like customer base.
The major risks for DWCH are the world wide recession coupled with lack of Wall Street coverage. But there are several catalysts that may move the stock higher.
Catalyst:
- Older versions of Monarch will not be compatible with Vista. Some of their 400,000 customers will be forced to upgrade to version 9 or 10 if their company or personal computer is using Vista coupled with the significantly improved functionality.
- A new CEO was put in place about a year ago with a proven track record selling large enterprise solutions with higher margins and recurring revenue steams from their new proven enterprise BI solutions.
- Investment community recognizing the value based on sustainable high FCF and depth and bright prospects of product offerings.
- New product upgrade Monarch version 10 just released in this current quarter.
- International recognition of the significant cost benefit of using Datawatch technologies with no comparative value solution. Furthermore, Datatwatch recently embarked on a re-branding effort communicating their new focus on more profitable enterprise solutions.
I own a small amount of DWCH as part of well diversified portfolio
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http://feeds2.feedburner.com/ShadowstockDeepValueMicroCapStocks
12/27/2008
Value Creation
For a company to increase intrinsic value the formula is simple.
Value creation formula = (ROIC – WACC)*Growth (Return on invested capital – weighted average cost of capital) multiplied by growth.
ROIC = ((after tax operating profits)/(sum working capital + fixed assets))
Many companies pursue growth at all cost. CEO’s and executives get seduced by the institutional imperative. Many feel corporate activity such as acquisitions help confirm their value instead of improving ROIC.
Growth alone will not increase value and but instead destroy value if the return on capital is less than the cost of capital. Furthermore a company can have amazing growth but if the return on capital is equal to the cost of capital the firm will not realize any value. There may be a short term pop in the stock price but this will not hold unless capital returns are improved relative to cost of the capital.
Free cash flow or owners earnings is positively impacted by increasing ROIC, or lowering WACC or increasing growth only when ROIC is greater than WACC. Managers must control these “levers” that drive ROIC. Management must understand how ROIC, WACC and growth will increase the value of their company.
Hence its plain and simple the value of any business is the sum of all cash you receive from the business now and in the future. An important point to realize is a company with great management will have a high ROIC relative to industry peers indicating an efficient use of corporate assets. So finding companies with high ROIC and a high earnings yield clearly indicates bargin/value. In essence you’re buying a great company evident by a high ROIC for a cheap price (high earnings yield).
ROIC = ((after tax operating profits)/(sum working capital + fixed assets))
ARKR has some important attributes that is not common with most stocks.
Quote ARKR
-)Outstanding ROIC for the restaurant industry indicating effective management coupled with little or no dilution
Period Ending: 9/2008 9/2007 9/2006 10/2005 10/2004
Gross Margin 43.27% 43.80% 42.40% 43.60% 30.78%
Operating Margin 7.81% 9.13% 6.65% 7.14% 8.31%
Pre-Tax Margin 8.72% 10.06% 7.34% 7.79% 8.78%
Profit Margin 5.57% 10.48% 4.50% 5.69% 5.75%
Pre-Tax ROE 28.93% 32.80% 21.41% 24.05% 29.71%
After Tax ROE 18.46% 34.16% 13.13% 17.58% 19.46%
Pre-Tax ROA 20.60% 23.96% 17.14% 19.55% 22.95%
After Tax ROA 13.14% 24.95% 10.52% 14.29% 15.04%
Pre-Tax ROIC 24.28% 28.96% 19.23% 23.27% 28.39%
After Tax ROIC 15.49% 30.17% 11.79% 17.02% 18.60%
I own a small amount of ARKR shares in a well diversified portfolio.
Value creation formula = (ROIC – WACC)*Growth (Return on invested capital – weighted average cost of capital) multiplied by growth.
ROIC = ((after tax operating profits)/(sum working capital + fixed assets))
Many companies pursue growth at all cost. CEO’s and executives get seduced by the institutional imperative. Many feel corporate activity such as acquisitions help confirm their value instead of improving ROIC.
Growth alone will not increase value and but instead destroy value if the return on capital is less than the cost of capital. Furthermore a company can have amazing growth but if the return on capital is equal to the cost of capital the firm will not realize any value. There may be a short term pop in the stock price but this will not hold unless capital returns are improved relative to cost of the capital.
Free cash flow or owners earnings is positively impacted by increasing ROIC, or lowering WACC or increasing growth only when ROIC is greater than WACC. Managers must control these “levers” that drive ROIC. Management must understand how ROIC, WACC and growth will increase the value of their company.
Hence its plain and simple the value of any business is the sum of all cash you receive from the business now and in the future. An important point to realize is a company with great management will have a high ROIC relative to industry peers indicating an efficient use of corporate assets. So finding companies with high ROIC and a high earnings yield clearly indicates bargin/value. In essence you’re buying a great company evident by a high ROIC for a cheap price (high earnings yield).
ROIC = ((after tax operating profits)/(sum working capital + fixed assets))
ARKR has some important attributes that is not common with most stocks.
Quote ARKR
-)Outstanding ROIC for the restaurant industry indicating effective management coupled with little or no dilution
Period Ending: 9/2008 9/2007 9/2006 10/2005 10/2004
Gross Margin 43.27% 43.80% 42.40% 43.60% 30.78%
Operating Margin 7.81% 9.13% 6.65% 7.14% 8.31%
Pre-Tax Margin 8.72% 10.06% 7.34% 7.79% 8.78%
Profit Margin 5.57% 10.48% 4.50% 5.69% 5.75%
Pre-Tax ROE 28.93% 32.80% 21.41% 24.05% 29.71%
After Tax ROE 18.46% 34.16% 13.13% 17.58% 19.46%
Pre-Tax ROA 20.60% 23.96% 17.14% 19.55% 22.95%
After Tax ROA 13.14% 24.95% 10.52% 14.29% 15.04%
Pre-Tax ROIC 24.28% 28.96% 19.23% 23.27% 28.39%
After Tax ROIC 15.49% 30.17% 11.79% 17.02% 18.60%
At this time ARKR meets some of the important factors for value as we discussed.
I own a small amount of ARKR shares in a well diversified portfolio.
12/21/2008
New Micro Cap Value Ideas 12/21/08
New Micro Cap Value Ideas 12/21/08
http://www.shadowstock.com/ss_portfolio.html
These stocks have passed several important investment criteria hurdles but I will have to give you the important details latter. PRCP, ARKR, MSC, USPH and BITI
http://www.shadowstock.com/ss_portfolio.html
These stocks have passed several important investment criteria hurdles but I will have to give you the important details latter. PRCP, ARKR, MSC, USPH and BITI
12/05/2008
Opti Inc (OPTI.OB), Logility, Inc (LGTY), Actuate Corp (ACTU)
OPTI.OB
Friday December 5, 2:33 pm ET
OPTi Receives Ruling in Markman Hearing in Patent Infringement Action Against Apple Inc
http://biz.yahoo.com/bw/081205/20081205005622.html?.v=1
Price = 2.20
Cash/MC = .42
Insider buying = Positive
Per share cash – total liabilities = .95
OPTI.OB is a cash rich company winning major patent infringement lawsuits. Friday 12/5/08 OPTI received a positive ruling for patent infringement against Apple inc. Total amount has yet to be determined. High probability there will be other positive patent infringement suits in favor for OPTI.
LGTY
Company Reports 14th Consecutive Quarter of Profitability
http://biz.yahoo.com/prnews/081204/clth069.html?.v=101
Revenue declines 6% over the second quarter of fiscal 2008;
-- Software license fees for the quarter ended October 31, 2008 were $3.3 million, a decrease of 4% over the second quarter of fiscal 2008;
-- Services and other revenues for the quarter ended October 31, 2008 were $1.4 million, a decrease of 32% over the second quarter of fiscal 2008;
“The overall financial condition of the Company remains strong, with cash and investments of approximately $45.2 million as of October 31, 2008. This is approximately an $814,000 sequential increase in cash and investments compared to July 31, 2008 and approximately a $5.6 million increase compared to October 31, 2007. During the quarter, the Company repurchased 27,122 shares of its common shares for approximately $181,000 under its authorized stock repurchase program.”
Stock at $4.24 is attractive
ACTU Actuate Corporation
Actuate boosts tender offer price after buyout bid
Thursday December 4
http://biz.yahoo.com/ap/081204/actuate_tender_offer.html?.v=1
Stock is attractive at the current price of $2.95
GP per share $1.84
Cash + AR – Total Liabilities = $.52
I own a small position in all the above stocks as part of a highly diversified portfolio.
Friday December 5, 2:33 pm ET
OPTi Receives Ruling in Markman Hearing in Patent Infringement Action Against Apple Inc
http://biz.yahoo.com/bw/081205/20081205005622.html?.v=1
Price = 2.20
Cash/MC = .42
Insider buying = Positive
Per share cash – total liabilities = .95
OPTI.OB is a cash rich company winning major patent infringement lawsuits. Friday 12/5/08 OPTI received a positive ruling for patent infringement against Apple inc. Total amount has yet to be determined. High probability there will be other positive patent infringement suits in favor for OPTI.
LGTY
Company Reports 14th Consecutive Quarter of Profitability
http://biz.yahoo.com/prnews/081204/clth069.html?.v=101
Revenue declines 6% over the second quarter of fiscal 2008;
-- Software license fees for the quarter ended October 31, 2008 were $3.3 million, a decrease of 4% over the second quarter of fiscal 2008;
-- Services and other revenues for the quarter ended October 31, 2008 were $1.4 million, a decrease of 32% over the second quarter of fiscal 2008;
“The overall financial condition of the Company remains strong, with cash and investments of approximately $45.2 million as of October 31, 2008. This is approximately an $814,000 sequential increase in cash and investments compared to July 31, 2008 and approximately a $5.6 million increase compared to October 31, 2007. During the quarter, the Company repurchased 27,122 shares of its common shares for approximately $181,000 under its authorized stock repurchase program.”
Stock at $4.24 is attractive
ACTU Actuate Corporation
Actuate boosts tender offer price after buyout bid
Thursday December 4
http://biz.yahoo.com/ap/081204/actuate_tender_offer.html?.v=1
Stock is attractive at the current price of $2.95
GP per share $1.84
Cash + AR – Total Liabilities = $.52
I own a small position in all the above stocks as part of a highly diversified portfolio.
11/24/2008
One of the great thinkers on investing: Jim Grant
This lecture on October 15th 2008 is very informative and thought provoking!
http://www.moaf.org/resources/media/video/20081015
http://www.moaf.org/resources/media/video/20081015
11/15/2008
Reporting postive results this past week; No real positive price change for these ShadowStocks??
SYTE.OB $.055 : 11/14/08 Opening Price
SYTE.OB
http://biz.yahoo.com/iw/081114/0452798.html
“The Company continued to deliver on its growth strategy, eclipsing Fiscal Year 2007 net income for the nine months ended September 30, 2008 and acquiring Velocity West, a Texas-based Internet Service Provider (ISP) and wholesale managed modem solution provider. Financial highlights for the quarter include:”
-- Total Revenue for the three (3) months ended September 30, 2008 was $2,485,294, an increase of $1,003,408 or 67.7% from $1,481,886 for the same period in 2007. -- Net Income for the three (3) months ended September 30, 2008 was $392,060, an increase of $207,316 or 112.2% from $184,744 for the same period in 2007.
-- Total Revenue for the nine (9) months ended September 30, 2008 was $7,644,538, an increase of $3,193,938 or 71.8% from $4,450,600 for the same period in 2007.
-- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the nine (9) months ended September 30, 2008 was $3,461,515, an increase of $1,748,708 or 102.1% from $1,712,807 for the same period in 2007.
-- Net Income for the nine (9) months ended September 30, 2008 was $1,092,939, an increase of $510,107 or 87.5% from $582,832 for the same period in 2007.
Regarding the Company's future outlook, Mr. Erhartic commented, "Strong companies make bold strides during economic downturns. We believe that good, but monetarily weakened, ISPs will be increasingly more receptive to being acquired by Sitestar in this market. Similarly, we think that our high profit margin dial-up customers may be less likely to switch to more expensive but lower margin broadband service offerings in an economy where households seek to curtail discretionary monthly expenses. Being in a healthy financial position amidst weakened market conditions, we are confident about the future of Sitestar."
based on earnings SYTE.OB is CHEAP but the balance sheet in the past raised concern although improved results has taken most of this concern off the table at this point
RLOG $4.24 : 11/14/08 Opening Price
http://biz.yahoo.com/bw/081113/20081113005586.html?.v=1
Rand Logistics Reports Record EBITDA of $13.2 Million for the Second Quarter of Fiscal 2009, up 347 PercentThursday November 13, 7:32 am ET
RLOG Posted Record EPS of $0.38 for the Quarter, $0.58 YTD
NEW YORK--(BUSINESS WIRE)--Rand Logistics Inc. (Nasdaq: RLOG - News) (“Rand”) today announced financial and operational results for the second quarter of fiscal 2009 ended September 30, 2008.
Second Quarter Fiscal 2009 Business Highlights
Marine freight revenue (excluding fuel surcharges, outside charter and other surcharges) increased by 45.9% to $32.3 million, from $22.2 million in the prior year quarter
Vessel margins1 increased by 176.9%, to $16.1 million, from $5.8 million in the prior year quarter due to increased operating leverage
EBITDA1 increased by 347.2% to $13.2 million from $3.0 million in the second quarter of fiscal 2009
Fiscal 2009 EBITDA projected to meet or exceed the high end of management’s EBITDA guidance provided last quarter of $18.0 million to $19.5 million
Year To Date Fiscal 2009 Financial Results
For the six months ended September 30, 2008, marine freight revenue (excluding fuel surcharges, outside charter and other surcharges) increased 42.8% to $59.6 million, compared to $41.8 million for the same period last year. EBITDA was $21.5 million for the six months ended September 30, 2008, compared to $5.9 million in the same period last year. The $15.6 million increase in EBITDA was due to ongoing operational improvements, the successful integration of strategic acquisitions, vessel upgrades and infrastructure investments.
Management Comments
Scott Bravener, President and CEO of Lower Lakes, stated, “Our second quarter results illustrate the underlying strength of our business. We achieved record EBITDA this quarter of $13.2 million, versus $3.0 million in the prior year quarter, fueled by increased freight rates, better vessel utilization and continued operating improvements. Demand for our services in our second quarter was strong in the Great Lakes region where we operate, and we employed all twelve vessels this quarter. For the quarter ended September 30, 2008, vessel margin per day (before SG&A) equaled $14,069 versus $6,772 for the same quarter last year, an increase of 107.8%. We believe these strong operating trends will continue, as we further improve the performance of our fleet.”
Outlook
Laurence S. Levy, Chairman and CEO of Rand, added, “Our results this quarter are indicative of the normalized earnings capability of our assets, as we continue to realize their full potential. We believe that our business remains well protected as a result of the diversity of the end markets and customers that we serve, our low cost operating position and long-term contractual nature of our revenues. Although end market demand has softened somewhat, we are 100% contractually committed for the balance of this sailing season and based on our existing contracts and our knowledge of customer demand, we expect that our vessels will be fully utilized for the 2009 sailing season. Year-to-date, we have generated EBITDA of $21.5 million, exceeding our internal expectations, and we believe that we will meet or exceed the high end of our previously stated EBITDA guidance of $18.0 million to $19.5 million. The fundamentals of our business remain solid, and we continue to extract operating efficiencies from our fleet.”
http://biz.yahoo.com/bw/081113/20081113005586.html?.v=1
It my opinion RLOG still has dilution to work off. The business is profitable with a strong moat.
DCU $.83 : 11/14/08 Opening Price
Friday November 14, 10:33 am ET
For the first three months of fiscal 2009, revenues increased 42.5% to $6,750,817 from $4,736,644 for the same period of last year. Net earnings increased 84.9% to $209,001 or $.03 per diluted share from $113,044 or $.02 per diluted share in the first quarter of fiscal 2008.
http://biz.yahoo.com/bw/081114/20081114005554.html?.v=1
This tiny stock is still attractive at these prices
My original introduction
STMF.PK $0.77 : 11/14/08 Opening Price
Company website
http://www.stamfordig.com/
Recent Conference Call
http://www.stamfordig.com/content/sound/StamfordIndustrialGroup,Inc_11.10.08.mp3
*3rd quarter revenues were up 47.20% from 2007
*Full year revenue guidance increased to $135 - $145 million
*Full year EPS before non-cash items guidance increased to $0.29 - $0.32
“The increase in revenue is primarily due to increased demand for our products from existing customers resulting in higher sales volume, increased spending in commercial and industrial construction and infrastructure building end markets, price increases to customers and an increase in average scrap selling prices.
Net income for the third quarter ended September 30, 2008 was $4.4 million or $0.09 per diluted share versus $0.6 million or $0.01 per diluted share in the third quarter last year. Diluted earnings per share before non-cash benefits and expenses for the third quarter ended September 30, 2008 was $0.12 per share.
Cash provided by operating activities was $3.7 million for the third quarter ended September 30, 2008 compared to a cash usage of $0.1 million in the same quarter of the previous year.
Total debt was reduced $3.5 million in the quarter to $26.3 million compared to $29.8 million as of the prior quarter.
http://biz.yahoo.com/prnews/081110/nym029.html?.v=101
At .75 coupled with a talented management team backed by Warren Kanders large stake; STMF.PK should warrant further investigation.
Great management with a promise to list on a major exchange
ELST.OB $.31 : 11/14/08 Opening Price
ELST.OB reported 3rd quarter results.
Net Income for the third quarter of 2008 was $25,449, or $0.01 per share, compared with net income of $42,838, or $0.01 per share, for the third quarter of 2007
http://biz.yahoo.com/bw/081114/20081114005124.html?.v=1
For .31 you purchae Cash + AR – Total Liab = .44 per share, and sales per share of .56.
EV = Price per share (.31) – Cash (.40) + Total Liab(.049) = -.0439
http://shadowstock.blogspot.com/2008/08/electronic-systems-technology.html
I own a position in all of the above stocks as part of a highly diversified portfolio
SYTE.OB
http://biz.yahoo.com/iw/081114/0452798.html
“The Company continued to deliver on its growth strategy, eclipsing Fiscal Year 2007 net income for the nine months ended September 30, 2008 and acquiring Velocity West, a Texas-based Internet Service Provider (ISP) and wholesale managed modem solution provider. Financial highlights for the quarter include:”
-- Total Revenue for the three (3) months ended September 30, 2008 was $2,485,294, an increase of $1,003,408 or 67.7% from $1,481,886 for the same period in 2007. -- Net Income for the three (3) months ended September 30, 2008 was $392,060, an increase of $207,316 or 112.2% from $184,744 for the same period in 2007.
-- Total Revenue for the nine (9) months ended September 30, 2008 was $7,644,538, an increase of $3,193,938 or 71.8% from $4,450,600 for the same period in 2007.
-- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the nine (9) months ended September 30, 2008 was $3,461,515, an increase of $1,748,708 or 102.1% from $1,712,807 for the same period in 2007.
-- Net Income for the nine (9) months ended September 30, 2008 was $1,092,939, an increase of $510,107 or 87.5% from $582,832 for the same period in 2007.
Regarding the Company's future outlook, Mr. Erhartic commented, "Strong companies make bold strides during economic downturns. We believe that good, but monetarily weakened, ISPs will be increasingly more receptive to being acquired by Sitestar in this market. Similarly, we think that our high profit margin dial-up customers may be less likely to switch to more expensive but lower margin broadband service offerings in an economy where households seek to curtail discretionary monthly expenses. Being in a healthy financial position amidst weakened market conditions, we are confident about the future of Sitestar."
based on earnings SYTE.OB is CHEAP but the balance sheet in the past raised concern although improved results has taken most of this concern off the table at this point
RLOG $4.24 : 11/14/08 Opening Price
http://biz.yahoo.com/bw/081113/20081113005586.html?.v=1
Rand Logistics Reports Record EBITDA of $13.2 Million for the Second Quarter of Fiscal 2009, up 347 PercentThursday November 13, 7:32 am ET
RLOG Posted Record EPS of $0.38 for the Quarter, $0.58 YTD
NEW YORK--(BUSINESS WIRE)--Rand Logistics Inc. (Nasdaq: RLOG - News) (“Rand”) today announced financial and operational results for the second quarter of fiscal 2009 ended September 30, 2008.
Second Quarter Fiscal 2009 Business Highlights
Marine freight revenue (excluding fuel surcharges, outside charter and other surcharges) increased by 45.9% to $32.3 million, from $22.2 million in the prior year quarter
Vessel margins1 increased by 176.9%, to $16.1 million, from $5.8 million in the prior year quarter due to increased operating leverage
EBITDA1 increased by 347.2% to $13.2 million from $3.0 million in the second quarter of fiscal 2009
Fiscal 2009 EBITDA projected to meet or exceed the high end of management’s EBITDA guidance provided last quarter of $18.0 million to $19.5 million
Year To Date Fiscal 2009 Financial Results
For the six months ended September 30, 2008, marine freight revenue (excluding fuel surcharges, outside charter and other surcharges) increased 42.8% to $59.6 million, compared to $41.8 million for the same period last year. EBITDA was $21.5 million for the six months ended September 30, 2008, compared to $5.9 million in the same period last year. The $15.6 million increase in EBITDA was due to ongoing operational improvements, the successful integration of strategic acquisitions, vessel upgrades and infrastructure investments.
Management Comments
Scott Bravener, President and CEO of Lower Lakes, stated, “Our second quarter results illustrate the underlying strength of our business. We achieved record EBITDA this quarter of $13.2 million, versus $3.0 million in the prior year quarter, fueled by increased freight rates, better vessel utilization and continued operating improvements. Demand for our services in our second quarter was strong in the Great Lakes region where we operate, and we employed all twelve vessels this quarter. For the quarter ended September 30, 2008, vessel margin per day (before SG&A) equaled $14,069 versus $6,772 for the same quarter last year, an increase of 107.8%. We believe these strong operating trends will continue, as we further improve the performance of our fleet.”
Outlook
Laurence S. Levy, Chairman and CEO of Rand, added, “Our results this quarter are indicative of the normalized earnings capability of our assets, as we continue to realize their full potential. We believe that our business remains well protected as a result of the diversity of the end markets and customers that we serve, our low cost operating position and long-term contractual nature of our revenues. Although end market demand has softened somewhat, we are 100% contractually committed for the balance of this sailing season and based on our existing contracts and our knowledge of customer demand, we expect that our vessels will be fully utilized for the 2009 sailing season. Year-to-date, we have generated EBITDA of $21.5 million, exceeding our internal expectations, and we believe that we will meet or exceed the high end of our previously stated EBITDA guidance of $18.0 million to $19.5 million. The fundamentals of our business remain solid, and we continue to extract operating efficiencies from our fleet.”
http://biz.yahoo.com/bw/081113/20081113005586.html?.v=1
It my opinion RLOG still has dilution to work off. The business is profitable with a strong moat.
DCU $.83 : 11/14/08 Opening Price
Friday November 14, 10:33 am ET
For the first three months of fiscal 2009, revenues increased 42.5% to $6,750,817 from $4,736,644 for the same period of last year. Net earnings increased 84.9% to $209,001 or $.03 per diluted share from $113,044 or $.02 per diluted share in the first quarter of fiscal 2008.
http://biz.yahoo.com/bw/081114/20081114005554.html?.v=1
This tiny stock is still attractive at these prices
My original introduction
STMF.PK $0.77 : 11/14/08 Opening Price
Company website
http://www.stamfordig.com/
Recent Conference Call
http://www.stamfordig.com/content/sound/StamfordIndustrialGroup,Inc_11.10.08.mp3
*3rd quarter revenues were up 47.20% from 2007
*Full year revenue guidance increased to $135 - $145 million
*Full year EPS before non-cash items guidance increased to $0.29 - $0.32
“The increase in revenue is primarily due to increased demand for our products from existing customers resulting in higher sales volume, increased spending in commercial and industrial construction and infrastructure building end markets, price increases to customers and an increase in average scrap selling prices.
Net income for the third quarter ended September 30, 2008 was $4.4 million or $0.09 per diluted share versus $0.6 million or $0.01 per diluted share in the third quarter last year. Diluted earnings per share before non-cash benefits and expenses for the third quarter ended September 30, 2008 was $0.12 per share.
Cash provided by operating activities was $3.7 million for the third quarter ended September 30, 2008 compared to a cash usage of $0.1 million in the same quarter of the previous year.
Total debt was reduced $3.5 million in the quarter to $26.3 million compared to $29.8 million as of the prior quarter.
http://biz.yahoo.com/prnews/081110/nym029.html?.v=101
At .75 coupled with a talented management team backed by Warren Kanders large stake; STMF.PK should warrant further investigation.
Great management with a promise to list on a major exchange
ELST.OB $.31 : 11/14/08 Opening Price
ELST.OB reported 3rd quarter results.
Net Income for the third quarter of 2008 was $25,449, or $0.01 per share, compared with net income of $42,838, or $0.01 per share, for the third quarter of 2007
http://biz.yahoo.com/bw/081114/20081114005124.html?.v=1
For .31 you purchae Cash + AR – Total Liab = .44 per share, and sales per share of .56.
EV = Price per share (.31) – Cash (.40) + Total Liab(.049) = -.0439
http://shadowstock.blogspot.com/2008/08/electronic-systems-technology.html
I own a position in all of the above stocks as part of a highly diversified portfolio
11/11/2008
Bruce Greenwald on Value Investing: Also STMF.PK Stanford Industrial Group
Greenwald advises not getting lured by stocks selling at low P/Es based on peak earning such as steel companies. He suggests looking more closely at assets or an economic moat.
http://biz.yahoo.com/usnews/081107/07_bruce_greenwald_on_value_investing.html?.v=1
Why STMF.PK
This is not a traditional Graham and Dodd value stock with a strong balance sheet. In fact the balance sheet is horrible. But attributes that makes the stock a risky but high return investment would be as follows in my opinion.
I've purchased shares of STMF.PK as part of a highly diversified portfolio. They posted another quarter of spectacular results with double digit growth for the top and bottom line .
http://biz.yahoo.com/prnews/081110/nym029.html?.v=101
http://biz.yahoo.com/usnews/081107/07_bruce_greenwald_on_value_investing.html?.v=1
Why STMF.PK
This is not a traditional Graham and Dodd value stock with a strong balance sheet. In fact the balance sheet is horrible. But attributes that makes the stock a risky but high return investment would be as follows in my opinion.
I've purchased shares of STMF.PK as part of a highly diversified portfolio. They posted another quarter of spectacular results with double digit growth for the top and bottom line .
http://biz.yahoo.com/prnews/081110/nym029.html?.v=101
10/31/2008
Digirad Corporation: DRAD
Thought Provoking Videos Worth Watching
http://www.digirad.com/
“Digirad designs and sells nuclear technology for mobile cardiovascular imaging to doctors' offices and hospitals across the United States. The company commercialized the first nuclear gamma camera and offers its products through both sale and leasing options through its digital imaging solutions subsidiary. The company's gamma cameras range from single- to triple-head configuration, with imaging procedures topping 100,000 in 2007.”
The story by numbers
Current Price = $.84 and the stock has moved from $.71 per share the other day after we introduced helped by the strong market over the past few days.
Shares outstanding are 18,930,000 * .84 Price Per Share = $15,901,200 – Cash = 23,251,000 or 1.228 per share + 12,671,000 for total liabilities or .67 per share. EV = .28 =.84 -1.228 +.67 = .28
Per Share Data
Price = .84
Cash = .54
Short Term Investments = .68
Net Receivables = .53
Long Term Investments = .12
Total Liabilities = .67
EV (Enterprise Value) = .84-.54 -.68+.67 = .28
Add back Net Receivables, Long Term Investments and the valuation looks more enticing .28 EV - .12 (long term investments) – AR .53 = a negative -.37
With this superficial look DRAD appears to be selling below break up value.
Annual revenues were 77.19 million and GP of 20.52 million which compares very favorable to 5.300 million total enterprise value. One major negative is the heavy reliance on capital expenditures. DRAD reported a -4.443 million negative free cash flow over the prior 12 months. This stock is risky due to negative free cash flow; economic head winds, commodity nature of their product, potential for product obsolesce and further margin compression.
I purchased a few shares on Friday as part of a highly diversified portfolio.
http://www.digirad.com/
“Digirad designs and sells nuclear technology for mobile cardiovascular imaging to doctors' offices and hospitals across the United States. The company commercialized the first nuclear gamma camera and offers its products through both sale and leasing options through its digital imaging solutions subsidiary. The company's gamma cameras range from single- to triple-head configuration, with imaging procedures topping 100,000 in 2007.”
The story by numbers
Current Price = $.84 and the stock has moved from $.71 per share the other day after we introduced helped by the strong market over the past few days.
Shares outstanding are 18,930,000 * .84 Price Per Share = $15,901,200 – Cash = 23,251,000 or 1.228 per share + 12,671,000 for total liabilities or .67 per share. EV = .28 =.84 -1.228 +.67 = .28
Per Share Data
Price = .84
Cash = .54
Short Term Investments = .68
Net Receivables = .53
Long Term Investments = .12
Total Liabilities = .67
EV (Enterprise Value) = .84-.54 -.68+.67 = .28
Add back Net Receivables, Long Term Investments and the valuation looks more enticing .28 EV - .12 (long term investments) – AR .53 = a negative -.37
With this superficial look DRAD appears to be selling below break up value.
Annual revenues were 77.19 million and GP of 20.52 million which compares very favorable to 5.300 million total enterprise value. One major negative is the heavy reliance on capital expenditures. DRAD reported a -4.443 million negative free cash flow over the prior 12 months. This stock is risky due to negative free cash flow; economic head winds, commodity nature of their product, potential for product obsolesce and further margin compression.
I purchased a few shares on Friday as part of a highly diversified portfolio.
10/27/2008
Margin of Safety Deep Value Micro Cap
Quotes on the stocks DRAD, AMCS,PTIX,VIRL
DRAD $0.73 10/27/08 Digirad Corporation
AMCS $1.72 10/27/08 AMICAS Inc
PTIX $3.17 10/27/08 Performance Technologies
VIRL $3.80 10/27/08 Virage Logic Corporation
This is not a deep value stock but risk takers looking for a pink sheet stock with solid mangement, growth aspirations and current profitalble operations may consider STMF.PK (Stamford Industrial Group, Inc) $.70 on 10/27/08
Currnet stellar financial reports
Important 8k with business plan
DRAD $0.73 10/27/08 Digirad Corporation
AMCS $1.72 10/27/08 AMICAS Inc
PTIX $3.17 10/27/08 Performance Technologies
VIRL $3.80 10/27/08 Virage Logic Corporation
This is not a deep value stock but risk takers looking for a pink sheet stock with solid mangement, growth aspirations and current profitalble operations may consider STMF.PK (Stamford Industrial Group, Inc) $.70 on 10/27/08
Currnet stellar financial reports
Important 8k with business plan
10/19/2008
Nassim Nicholas; TUES Tuesday Morning Corporation
Nassim Nicholas; always entertaining and provides useful insight
http://www.youtube.com/watch?v=ABXPICWjFIo
Discount Variety Stores
How does TUES (Tuesday Morning Corp) compare to some other publicly held discount variety stores?
TUES was below 2 the other day so I bought a few shares and will hold back until there is further weakness in the stock price that last traded at $2.42. In the past the investment would have been a high probability event to revert back to its historical valuation. But the future profitability is too uncertain for me to bet heavy.
EV/Sales = .25
YOY Qtry Rev Growth = 75%
P/S or EV/Sale is selling at a discount to the historical valuation
GP/EV = 112%
EBITDA/EV = 18.68%
OI-Taxes/EV = 8.66%
FCF/EV = 12.168%
CFFO/EV = 129.92%
Share outstanding have remained steady for many years at 41.82 million shares outstanding.
The stock is down 62% over the prior 52 weeks and the stock price has declined more dramatically than the other more expensive discount variety retailers.
6.20% of the float is short; this is in the negative territory but compares favorably to their peers.
Per Share Data for Tuesday
Current price 2.45
EV/MC = 224%
OI = .72
Cash + AR – Ttl Liab = 3.44
GP = 6.09
TUES is cheap and currently trading at a huge discount to its historcial valuation
http://www.youtube.com/watch?v=ABXPICWjFIo
Discount Variety Stores
How does TUES (Tuesday Morning Corp) compare to some other publicly held discount variety stores?
TUES was below 2 the other day so I bought a few shares and will hold back until there is further weakness in the stock price that last traded at $2.42. In the past the investment would have been a high probability event to revert back to its historical valuation. But the future profitability is too uncertain for me to bet heavy.
EV/Sales = .25
YOY Qtry Rev Growth = 75%
P/S or EV/Sale is selling at a discount to the historical valuation
GP/EV = 112%
EBITDA/EV = 18.68%
OI-Taxes/EV = 8.66%
FCF/EV = 12.168%
CFFO/EV = 129.92%
Share outstanding have remained steady for many years at 41.82 million shares outstanding.
The stock is down 62% over the prior 52 weeks and the stock price has declined more dramatically than the other more expensive discount variety retailers.
6.20% of the float is short; this is in the negative territory but compares favorably to their peers.
Per Share Data for Tuesday
Current price 2.45
EV/MC = 224%
OI = .72
Cash + AR – Ttl Liab = 3.44
GP = 6.09
TUES is cheap and currently trading at a huge discount to its historcial valuation
10/09/2008
Two new ideas
These stocks have short and long term value at these prices; my positions are alway built slowly. I have not made any purchases at this time.
MCGC TUES Quotes
Troubled stocks in trouble times but the value is signficant, IMO
MCG Capital Corporation
MCGC $.70
Tuesday Morning Corp.
TUES $2.96
MCGC TUES Quotes
Troubled stocks in trouble times but the value is signficant, IMO
MCG Capital Corporation
MCGC $.70
Tuesday Morning Corp.
TUES $2.96
10/04/2008
Avalon Holdings Corp AWX: Real Estate Play?
Company website
http://www.avalonholdings.com/
Not quite the bargain at 2.70 per share or a EV of 16,259,700 million that I first thought the other night. This is far from a slam dunk and could turn into a value trap by going dark with deregistration of shares.
The original attraction was primarily the real estate holdings as follows; The PPE of 35 million was significantly higher than the EV of 16.259 million coupled with their profitable waste management business made the idea an interesting investment at first glance.
Taken from the recent 10k
PROPERTIES
<
TBG, Inc. leases and operates the Avalon Golf and Country Club at Squaw Creek in Vienna, Ohio, which includes an 18-hole golf course and practice facility on approximately 224 acres, an outdoor swimming pool, four tennis courts and a 67,000 square foot clubhouse that includes a pro shop, fitness center, restaurants and banquet facilities.
Avalon Country Club at Sharon, Inc. owns an 18-hole golf course on approximately 130 acres. The clubhouse is currently being renovated and additional banquet and recreational facilities are being constructed. When completed, the renovated clubhouse and recreational facility will be approximately 80,000 square feet and will include a pro shop, dining and banquet facilities, an outdoor swimming pool, a spa and fitness center.
The captive landfill management operations use approximately six pieces of equipment (such as bulldozers, excavators and backhoes) all of which are owned or leased by ALMI.
Generally, Avalon’s fixed assets are in good condition and are satisfactory for the purposes for which they are intended. >>
Avalon Holdings Corp AWX derives most of its revenue from the waste management industry. Over the last 4 quarters they reported revenues of 44.66 million.
Important financial data;
EV/Rev = .33
OI-Taxes/EV = 3.36%
CFFO/EV = 28.77%
FCF/EV = -58.37%
The negative FCF was significantly impacted by additional improvements made to their Golf properties over the past 12 months
EBITDA = $1,840,000
Per Share Data
Cash+AR-Ttl Liab = .82
Cash – Ttl Liab = -1.08
CFFO/NI = 2.32
52WkChng = - 58.87%
Cash%Price = 32.07%
No Shorts
Financial Health = C
Growth = C
Profitability = F
PPE/EV = 233.54%
Qtrly Rev Growth % = 1.60%
P/S of .33 is trading a slight discount compared to the prior 3 years.
EV/MC = 1.37
EBITDA/EV = 12.18%
3,803,000 shares outstanding
MC at a price of 2.90 = 11,028,700
Cash = $3,552,000
AR = $8,148,000
FA = $35,633,000
CL = $8,552,000
TL = $8,783,000
EV = 11,028.70 (MC) – 3,552 (Cash)+ 8,783(TL) = 16,259,700
For $16,259,700 EV you are getting $44,662,000 in annual historical revenue and PPE recorded at a historical cost of 35,600,000 million.
http://www.avalonholdings.com/
Not quite the bargain at 2.70 per share or a EV of 16,259,700 million that I first thought the other night. This is far from a slam dunk and could turn into a value trap by going dark with deregistration of shares.
The original attraction was primarily the real estate holdings as follows; The PPE of 35 million was significantly higher than the EV of 16.259 million coupled with their profitable waste management business made the idea an interesting investment at first glance.
Taken from the recent 10k
PROPERTIES
<
TBG, Inc. leases and operates the Avalon Golf and Country Club at Squaw Creek in Vienna, Ohio, which includes an 18-hole golf course and practice facility on approximately 224 acres, an outdoor swimming pool, four tennis courts and a 67,000 square foot clubhouse that includes a pro shop, fitness center, restaurants and banquet facilities.
Avalon Country Club at Sharon, Inc. owns an 18-hole golf course on approximately 130 acres. The clubhouse is currently being renovated and additional banquet and recreational facilities are being constructed. When completed, the renovated clubhouse and recreational facility will be approximately 80,000 square feet and will include a pro shop, dining and banquet facilities, an outdoor swimming pool, a spa and fitness center.
The captive landfill management operations use approximately six pieces of equipment (such as bulldozers, excavators and backhoes) all of which are owned or leased by ALMI.
Generally, Avalon’s fixed assets are in good condition and are satisfactory for the purposes for which they are intended. >>
Avalon Holdings Corp AWX derives most of its revenue from the waste management industry. Over the last 4 quarters they reported revenues of 44.66 million.
Important financial data;
EV/Rev = .33
OI-Taxes/EV = 3.36%
CFFO/EV = 28.77%
FCF/EV = -58.37%
The negative FCF was significantly impacted by additional improvements made to their Golf properties over the past 12 months
EBITDA = $1,840,000
Per Share Data
Cash+AR-Ttl Liab = .82
Cash – Ttl Liab = -1.08
CFFO/NI = 2.32
52WkChng = - 58.87%
Cash%Price = 32.07%
No Shorts
Financial Health = C
Growth = C
Profitability = F
PPE/EV = 233.54%
Qtrly Rev Growth % = 1.60%
P/S of .33 is trading a slight discount compared to the prior 3 years.
EV/MC = 1.37
EBITDA/EV = 12.18%
3,803,000 shares outstanding
MC at a price of 2.90 = 11,028,700
Cash = $3,552,000
AR = $8,148,000
FA = $35,633,000
CL = $8,552,000
TL = $8,783,000
EV = 11,028.70 (MC) – 3,552 (Cash)+ 8,783(TL) = 16,259,700
For $16,259,700 EV you are getting $44,662,000 in annual historical revenue and PPE recorded at a historical cost of 35,600,000 million.
10/02/2008
Value Micro Caps 10/02/08
Stocks I was buying today; LOAN (Cash), AWX (Real Estate), USOO.OB (Over Sold Value),SPRO (Niche with High Earnings Yield), and KRSL (Growing Profitable Manufacturing Nano Cap)
More details in next post
LOAN,AWX,USOO.OB,SPRO,KRSL
http://www.shadowstock.com/index.html
More details in next post
LOAN,AWX,USOO.OB,SPRO,KRSL
http://www.shadowstock.com/index.html
9/22/2008
DCU: Oversold, Neglected, Ignored, Unloved and Illiquid but still has DeepValue
DCU Dryclean USA
Short on time tonight so I will give only a few pieces of financial data. I expect to add more.
September 14, 2008 I posted a few thoughts on DCU when it traded around .75. I believed it was a bargain so I was making purchases around this price.
Here are a few reasons why;
Top line:
They have EV/Sales of only .27; this compares very favorably to P/S of .91 (2004),1.1 (2005),.90(2006),.60 (2007),.30 TTM
GP/EV = 1.05% or we can say the company’s enterprise value is selling for the LESS than annual gross profit. The Annual gross profit is 5.80 million and the EV is ~ 5.283 million = Market Cap 5.84 Mil – Cash 4.149 Mil + Total Liabilities of 3.592 Mil = 5.283 Mil enterprise value.
Subtract A/R of 1.759 million and it brings the cost of buying the company down to 3.24 million. Annual sales were 20.39 million for the prior 12 months.
CFFO was strong at 1.342 million for the last 12 months and FCF was 1.28. CFFO/EV = 25% and FCF/EV = 24%. EBITDA/EV = 16.09%, EBITDA = 885.91k
OI-Taxes/EV = 8%, OI/EV = 14%,
Float total value based on EV = 1.436 million
Profit Magin 2.92%, Operating Margin = 3.71%
Tax/OI = 45%
-9.40% = Qtrly Rev Growth
ROA = 4.98%
Earning Quality represented by CFFO/NI was positive with CFFO of 1.342 million over the last 12 months compared to reported NI of 596.13k
EV/MC = 5.84/5.283 = .902
Short on time tonight so I will give only a few pieces of financial data. I expect to add more.
September 14, 2008 I posted a few thoughts on DCU when it traded around .75. I believed it was a bargain so I was making purchases around this price.
Here are a few reasons why;
Top line:
They have EV/Sales of only .27; this compares very favorably to P/S of .91 (2004),1.1 (2005),.90(2006),.60 (2007),.30 TTM
GP/EV = 1.05% or we can say the company’s enterprise value is selling for the LESS than annual gross profit. The Annual gross profit is 5.80 million and the EV is ~ 5.283 million = Market Cap 5.84 Mil – Cash 4.149 Mil + Total Liabilities of 3.592 Mil = 5.283 Mil enterprise value.
Subtract A/R of 1.759 million and it brings the cost of buying the company down to 3.24 million. Annual sales were 20.39 million for the prior 12 months.
CFFO was strong at 1.342 million for the last 12 months and FCF was 1.28. CFFO/EV = 25% and FCF/EV = 24%. EBITDA/EV = 16.09%, EBITDA = 885.91k
OI-Taxes/EV = 8%, OI/EV = 14%,
Float total value based on EV = 1.436 million
Profit Magin 2.92%, Operating Margin = 3.71%
Tax/OI = 45%
-9.40% = Qtrly Rev Growth
ROA = 4.98%
Earning Quality represented by CFFO/NI was positive with CFFO of 1.342 million over the last 12 months compared to reported NI of 596.13k
EV/MC = 5.84/5.283 = .902
9/11/2008
Bowlin Travel Centers(BWTL.OB) is the company now up for sale?
09/11/08
LOAN, again had modest insider buying.
BWTL.OB
Bowlin Travel Centers
http://biz.yahoo.com/prnews/080910/law039.html?.v=101
Management was reading my mind. On Wednesday September 10, BWTL.OB the company retained Miller Capital Markets, LLC, and investment banking firm and FINRA member, to assist the Board of Directors in assessing a number of strategic and business options. Looks like they may consider a sale of the company.
Furthermore they reported “net sales from continuing operations of $7.645 million, a decrease of 7.5% compared to net sales from continuing operations of $8.268 million for the prior year second quarter period. The Company reported net income for the three-month period ended July 31, 2008, of $118,000 or $0.03 per basic and diluted share, compared to net income of $711,000, or $0.15 per basic and diluted share for the prior year period ended July 31, 2007 that includes income of $549,000 (net of income tax expense) from the sale of one location.”
LOAN, again had modest insider buying.
BWTL.OB
Bowlin Travel Centers
http://biz.yahoo.com/prnews/080910/law039.html?.v=101
Management was reading my mind. On Wednesday September 10, BWTL.OB the company retained Miller Capital Markets, LLC, and investment banking firm and FINRA member, to assist the Board of Directors in assessing a number of strategic and business options. Looks like they may consider a sale of the company.
Furthermore they reported “net sales from continuing operations of $7.645 million, a decrease of 7.5% compared to net sales from continuing operations of $8.268 million for the prior year second quarter period. The Company reported net income for the three-month period ended July 31, 2008, of $118,000 or $0.03 per basic and diluted share, compared to net income of $711,000, or $0.15 per basic and diluted share for the prior year period ended July 31, 2007 that includes income of $549,000 (net of income tax expense) from the sale of one location.”
9/06/2008
BWTL.OB selling at discount to liquidation value??
BWTL.OB dropped Friday and reached a low of .76. It bounced back to .95 to close the day down 17.39%. The contrarian in me couldn’t resist this tiny 4.35 million unknown OTCBB retail stock. Warning 41.7% of the Company’s net sales are derived from the sale of retail gasoline.
But with a $2.83 healthy book value that is comprised of cash and real estate.
I purchased shares on Friday with a long term outlook willing to wait for the potential company sale, share buybacks, a going private transaction or the sale of company owned real estate to unlock value. Note shares were available at the .95 close price this Friday 09/05/08.
Lets break down the book value of 2.83 per share. Cash is .87 , current assets 1.77, long term investments of .13, fixed assets 2.37 and this includes real estate at 5 locations. As of January 31, 2008, the Company operated ten travel centers, seven of which are in New Mexico and three of which are in Arizona. The Company owns the real estate and improvements where five of its travel centers are located, all of which are subject to mortgages. Total liabilities are 1.43 per share and cash – current liabilities = .56, retained earnings are .70 per share. Current assets (1.46) - Current Liabilities (.31) =$1.15. A $1.15 NCAV versus a stock price of .95 or lower on Friday is a clear Graham’s NCAV strategy.
P/S is at .16 and is sits at a historical low going back to 2002. Price to book is also at historical low .95(price)/2.83(Book value) = .33
But with a $2.83 healthy book value that is comprised of cash and real estate.
I purchased shares on Friday with a long term outlook willing to wait for the potential company sale, share buybacks, a going private transaction or the sale of company owned real estate to unlock value. Note shares were available at the .95 close price this Friday 09/05/08.
Lets break down the book value of 2.83 per share. Cash is .87 , current assets 1.77, long term investments of .13, fixed assets 2.37 and this includes real estate at 5 locations. As of January 31, 2008, the Company operated ten travel centers, seven of which are in New Mexico and three of which are in Arizona. The Company owns the real estate and improvements where five of its travel centers are located, all of which are subject to mortgages. Total liabilities are 1.43 per share and cash – current liabilities = .56, retained earnings are .70 per share. Current assets (1.46) - Current Liabilities (.31) =$1.15. A $1.15 NCAV versus a stock price of .95 or lower on Friday is a clear Graham’s NCAV strategy.
P/S is at .16 and is sits at a historical low going back to 2002. Price to book is also at historical low .95(price)/2.83(Book value) = .33
8/31/2008
“the Midas touch”
Important MDS information
The Midas Story:
Midas, (MDS)
Many of us remember the commercial “the Midas touch”. We believe the brand name has value not represented in the current price. But this is not the main reason the stock may be selling at a discount to intrinsic value.
MDS was trading around $12 5 years ago and the current price of 14 looks cheap.
Although we don’t give macro analysis much weight but the obvious should be pointed out. The cut back in the purchase of new cars could be a push for repair shops such as Midas.
EV/Sales are a modest 2.09 with year over year quarterly sales growth of 8.70%. The price to sales ratio of 1.20 is trading at a discount to the prior 4 years. P/S was 2.1 in 2006, 1.6 in 05 and 04. The return to the mean factor is a real possibility, YTD ~-6.00%, and since 2005 has is down 6.80%. PPE/EV = .24
“Midas owned 223 retail locations, leased 500 locations and used other forms of real estate control over an additional 694 locations.” This was taken from the recent 10k.
Short position over the past month dropped about 11.35% from 1,410,000 in the prior month to 1,250,000 in the current month or 9.6% of outstanding float.
ROA = 9.06%, CFFO/NI over the past 12 months is a very healthy 2.76 indicating the high quality of reported earnings.
The dilution story is outstanding, there are few companies can say they have reduced the shares outstanding form prior years. 13.90 million Shares outstanding in the most recent quarter versus 16.10 million for 2004. This will have a powerful impact in increasing future EPS.
CFFO/EV = 27%, FCCF/EV = 7.06% this generous cash flow has allowed the company to regularly buy back shares. EBITDA/EV = 7.97%.
MDS has a solid list of value institutions buying at higher prices. This is a list of ownership filed in the 04/28/08 proxy.
Mario Gabelli and affiliates own 17.3%, Silverstone Capital 9.56%, Keeley Asset Management 9.56%, RGM Capital 6.68%,
The Midas Story:
Midas, (MDS)
Many of us remember the commercial “the Midas touch”. We believe the brand name has value not represented in the current price. But this is not the main reason the stock may be selling at a discount to intrinsic value.
MDS was trading around $12 5 years ago and the current price of 14 looks cheap.
Although we don’t give macro analysis much weight but the obvious should be pointed out. The cut back in the purchase of new cars could be a push for repair shops such as Midas.
EV/Sales are a modest 2.09 with year over year quarterly sales growth of 8.70%. The price to sales ratio of 1.20 is trading at a discount to the prior 4 years. P/S was 2.1 in 2006, 1.6 in 05 and 04. The return to the mean factor is a real possibility, YTD ~-6.00%, and since 2005 has is down 6.80%. PPE/EV = .24
“Midas owned 223 retail locations, leased 500 locations and used other forms of real estate control over an additional 694 locations.” This was taken from the recent 10k.
Short position over the past month dropped about 11.35% from 1,410,000 in the prior month to 1,250,000 in the current month or 9.6% of outstanding float.
ROA = 9.06%, CFFO/NI over the past 12 months is a very healthy 2.76 indicating the high quality of reported earnings.
The dilution story is outstanding, there are few companies can say they have reduced the shares outstanding form prior years. 13.90 million Shares outstanding in the most recent quarter versus 16.10 million for 2004. This will have a powerful impact in increasing future EPS.
CFFO/EV = 27%, FCCF/EV = 7.06% this generous cash flow has allowed the company to regularly buy back shares. EBITDA/EV = 7.97%.
MDS has a solid list of value institutions buying at higher prices. This is a list of ownership filed in the 04/28/08 proxy.
Mario Gabelli and affiliates own 17.3%, Silverstone Capital 9.56%, Keeley Asset Management 9.56%, RGM Capital 6.68%,
8/27/2008
Electronic Systems Technology
ELST.OB
We picked up the stock today at .41 to average down shares recently purchased.
Talk about unloved, ignored and neglected, ELST.OB has and enterprise value of less than a few hundred thousand. EV/Sales <.~20, no dilution, with no debt and a solid balance sheet
Ben Graham stated
“It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and that he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment."
ELST in our opinion meets these criteria and if your investment horizon is over 12 months this stock looks attractive to us at these prices.
We picked up the stock today at .41 to average down shares recently purchased.
Talk about unloved, ignored and neglected, ELST.OB has and enterprise value of less than a few hundred thousand. EV/Sales <.~20, no dilution, with no debt and a solid balance sheet
Ben Graham stated
“It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and that he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment."
ELST in our opinion meets these criteria and if your investment horizon is over 12 months this stock looks attractive to us at these prices.
8/25/2008
Important Value News
Glenn Greenberg Says Concentrate
http://www.valueinvestingnews.com/glenn-greenberg-says-concentrate
Value Stock Losers Buffett, Miller Poised as Winners
http://www.bloomberg.com/apps/news?pid=20601213&sid=aGM0dW8Mjc44&refer=home
When Cheap Stocks Become Cheaper
http://www.gurufocus.com/news.php?id=33931
More Important Than Margin of Safety?
http://www.gurufocus.com/news.php?id=33722
http://www.valueinvestingnews.com/glenn-greenberg-says-concentrate
Value Stock Losers Buffett, Miller Poised as Winners
http://www.bloomberg.com/apps/news?pid=20601213&sid=aGM0dW8Mjc44&refer=home
When Cheap Stocks Become Cheaper
http://www.gurufocus.com/news.php?id=33931
More Important Than Margin of Safety?
http://www.gurufocus.com/news.php?id=33722
8/22/2008
Selling below Cash less Liabilities, Profitable
Several weeks ago the stock symbol was DAGM, The new symbol is LOAN (Manhattan Bridge Capital)
The business shift prompted a name change to LOAN (Manhattan Bridge Capital)
http://finance.yahoo.com/q?s=loan
LOAN was introduced at .94 back on July 2008 using a nano cap deep value filter.
http://shadowstock.blogspot.com/2008/07/nano-cap-value-filter.html
The stock still deserves a closer look at these deep value prices selling far below the net cash value.
Loan has only 3.24 million shares outstanding and couple this with 6.651 million in cash less total liabilities of only $103,000. The stock clearly has a huge margin of safety. We’ve initiated a position.
The most recent news on business activity for LOAN can be found in the link http://biz.yahoo.com/pz/080812/148378.html
The 07/06/08 Selection Criteria for the original nano cap filter was as follows
1) Float * EV < 15,000,000Stocks with an Enterprise Value based on the outstanding float less than 15 million
2)EV/Sales <1.50Enterprise value/Sales < 1.50
3) Enterprise Value/Market Cap < 1.50Looking for stocks with little debt
4)[DiluAvg/TTM]>.96 Shares outstanding over the past 4 years/ TTM(trailing 12 months) > .96This indicates a tight control on dilution
5)Year over Year quarterly revenue growth greater than negative 15%[RevGrowthQtrly]>-15
6)Exclude stocks in the financial industry
7)Shares short as a percentage of float less than 5%
8)[AveragePS-TTMps/AveragePS]>0
P/S price to sales ratio improving based on Average P/S over the last 4 years versus TTM P/S. We use a ratio; Average PS – TTM PS/Average PSIf the PS over TTM is improving compared to the average of the past 4 years we select
9)Positive Operating income – Taxes / Enterprise Value
ttp://www.shadowstock.com/ss_portfolio.html
The business shift prompted a name change to LOAN (Manhattan Bridge Capital)
http://finance.yahoo.com/q?s=loan
LOAN was introduced at .94 back on July 2008 using a nano cap deep value filter.
http://shadowstock.blogspot.com/2008/07/nano-cap-value-filter.html
The stock still deserves a closer look at these deep value prices selling far below the net cash value.
Loan has only 3.24 million shares outstanding and couple this with 6.651 million in cash less total liabilities of only $103,000. The stock clearly has a huge margin of safety. We’ve initiated a position.
The most recent news on business activity for LOAN can be found in the link http://biz.yahoo.com/pz/080812/148378.html
The 07/06/08 Selection Criteria for the original nano cap filter was as follows
1) Float * EV < 15,000,000Stocks with an Enterprise Value based on the outstanding float less than 15 million
2)EV/Sales <1.50Enterprise value/Sales < 1.50
3) Enterprise Value/Market Cap < 1.50Looking for stocks with little debt
4)[DiluAvg/TTM]>.96 Shares outstanding over the past 4 years/ TTM(trailing 12 months) > .96This indicates a tight control on dilution
5)Year over Year quarterly revenue growth greater than negative 15%[RevGrowthQtrly]>-15
6)Exclude stocks in the financial industry
7)Shares short as a percentage of float less than 5%
8)[AveragePS-TTMps/AveragePS]>0
P/S price to sales ratio improving based on Average P/S over the last 4 years versus TTM P/S. We use a ratio; Average PS – TTM PS/Average PSIf the PS over TTM is improving compared to the average of the past 4 years we select
9)Positive Operating income – Taxes / Enterprise Value
ttp://www.shadowstock.com/ss_portfolio.html
8/18/2008
ShadowStock Ideas
View some of our ideas since December 2007. The most recent micro caps are MLR, ARTL, and others. The list will be updated with the most recent closing prices tomorrow, sorry.
http://www.shadowstock.com/ss_portfolio.html
http://www.shadowstock.com/ss_portfolio.html
8/01/2008
TCCO.OB still has value
Below is my post on TCCO.OB on 02/07/08 when the stock was ~3.0. The margin of safety still fits and earnings were enviable today.
Margin of Safety 1-Feb-07 08:32 pm
My reasons for holding this stock are several and these initial comments will focus on certain aspects of the balance sheet. TCCO has an impressive and improving balance sheet offering investors a significant margin of safety. NTA (net tangible assets) have grown slightly over the last 4 quarters even without reported earnings. The market cap and enterprise value (EV) are approximately 4.50 and 3.15 million respectively. Additionally, market cap – current assets - long term investments+ total liabilities are only 32% of the stocks price or calculates to 1.44 million versus the market cap of 4.50 million. Cash is 41.34% of the share price. Cash less all liabilities for the current period was 1.344 million versus reported 4 quarters ago .368 million. The balance sheet continues to quietly improve but reported earnings have been weak potentially offering us an opportunity to invest before positive net income is reported and the stock price quickly increases.
Sentiment : Strong Buy
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_T/threadview?m=tm&bn=36608&tid=1&mid=1&tof=22&frt=1
Margin of Safety 1-Feb-07 08:32 pm
My reasons for holding this stock are several and these initial comments will focus on certain aspects of the balance sheet. TCCO has an impressive and improving balance sheet offering investors a significant margin of safety. NTA (net tangible assets) have grown slightly over the last 4 quarters even without reported earnings. The market cap and enterprise value (EV) are approximately 4.50 and 3.15 million respectively. Additionally, market cap – current assets - long term investments+ total liabilities are only 32% of the stocks price or calculates to 1.44 million versus the market cap of 4.50 million. Cash is 41.34% of the share price. Cash less all liabilities for the current period was 1.344 million versus reported 4 quarters ago .368 million. The balance sheet continues to quietly improve but reported earnings have been weak potentially offering us an opportunity to invest before positive net income is reported and the stock price quickly increases.
Sentiment : Strong Buy
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_T/threadview?m=tm&bn=36608&tid=1&mid=1&tof=22&frt=1
7/26/2008
Value News and Specific Stock News 07/26/08
Evaluating Ambac: Intrinsic Value Withstanding Market Volatility
Steak n Shake needs healing
Another personal interview with investing guru, Bruce Berkowitz
Bruce Berkowitz video interview on Fox and CNBC
Even the Legends Are Losing in Today's Markets
Value Investing vs. Business Investing
Security Analysis: Introduction (Part 1)
Where to Find the Market's Bargains
Francis Chou: The Best Bargain-Hunting Value Investor from Canada?
David Dreman Quotes
The smallest of the small value stock filter
Stocks of interest
MAIL
MAIL: Stocks has been crushed after a business disagreement with Google that seems to have been resolved
http://biz.yahoo.com/bw/080723/20080723005485.html?.v=1
IPAS
13D filing by Foxhill Capital Partners, LLC
3,572,04 shares owned or 5.8% of the shares
http://finance.yahoo.com/q?s=IPAS
CLRS.PK
Significant recent insider buying at CLRS.PK
Warren Kanders
7/18/2008 P 13900 A $5.15
7/15/2008 P 100000 A $4.80
Sokolow Nicolas
7/17/2008 P 37500 A $5.15
7/18/2008 P 13900 A $5.15
Steak n Shake needs healing
Another personal interview with investing guru, Bruce Berkowitz
Bruce Berkowitz video interview on Fox and CNBC
Even the Legends Are Losing in Today's Markets
Value Investing vs. Business Investing
Security Analysis: Introduction (Part 1)
Where to Find the Market's Bargains
Francis Chou: The Best Bargain-Hunting Value Investor from Canada?
David Dreman Quotes
The smallest of the small value stock filter
Stocks of interest
MAIL: Stocks has been crushed after a business disagreement with Google that seems to have been resolved
http://biz.yahoo.com/bw/080723/20080723005485.html?.v=1
IPAS
13D filing by Foxhill Capital Partners, LLC
3,572,04 shares owned or 5.8% of the shares
http://finance.yahoo.com/q?s=IPAS
CLRS.PK
Significant recent insider buying at CLRS.PK
Warren Kanders
7/18/2008 P 13900 A $5.15
7/15/2008 P 100000 A $4.80
Sokolow Nicolas
7/17/2008 P 37500 A $5.15
7/18/2008 P 13900 A $5.15
7/17/2008
CATS introduced on 02/05/08 for $3.60
CATS was introduced on 02/05/08 for $3.60 http://www.shadowstock.com/ss_portfolio.html
on ShadowStock.com http://www.shadowstock.com/index.html
This ShadowStock received a take over today from ON Semiconductor and will pay 0.706 of its own shares, worth $8.84 each at Wednesday's close, for each share of Santa Clara-based Catalyst stock. The price represents a 53 percent premium to Catalyst's closing price of $4.06. CATS closed today at $6.45.
"Phoenix-based ON (Nasdaq:ONNN) plans to add Catalyst's analog and mixed-signal chips to its own similar product line. ON Semiconductor will pay 0.706 of its own shares, worth $8.84 each at Wednesday's close, for each share of Santa Clara-based Catalyst stock. The price represents a 53 percent premium to Catalyst's closing price of $4.06.
Catalyst shares soared $2.20, or 54.2 percent, to $6.26 in Thursday morning trading. ON Semiconductor shares rose 28 cents, or 3.2 percent, to $9.12. "
http://phoenix.bizjournals.com/phoenix/stories/2008/07/14/daily51.html?ana=yfcpc
on ShadowStock.com http://www.shadowstock.com/index.html
This ShadowStock received a take over today from ON Semiconductor and will pay 0.706 of its own shares, worth $8.84 each at Wednesday's close, for each share of Santa Clara-based Catalyst stock. The price represents a 53 percent premium to Catalyst's closing price of $4.06. CATS closed today at $6.45.
"Phoenix-based ON (Nasdaq:ONNN) plans to add Catalyst's analog and mixed-signal chips to its own similar product line. ON Semiconductor will pay 0.706 of its own shares, worth $8.84 each at Wednesday's close, for each share of Santa Clara-based Catalyst stock. The price represents a 53 percent premium to Catalyst's closing price of $4.06.
Catalyst shares soared $2.20, or 54.2 percent, to $6.26 in Thursday morning trading. ON Semiconductor shares rose 28 cents, or 3.2 percent, to $9.12. "
http://phoenix.bizjournals.com/phoenix/stories/2008/07/14/daily51.html?ana=yfcpc
7/15/2008
Wisdom from Benjamin Graham for a tough market
“It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and that he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment."
The employment industry may be the last place most investors would look for a new investment opportunity. But JOB listed on the AMEX may interest some adventuress investors.
Let’s start with a very brief introduction and some negatives. The CEO total compensation for 2007 was ~543,041. But with only 5.17 million shares outstanding the CEO costs approximately .11 per share or 3% of the last 12 months of revenues. This payment is significantly higher than their staffing industry group.
The current quarterly revenue compared to the prior year’s quarter dropped 21.60%. But the enterprise to revenue is the lowest in the industry near .07. With cash per share at .91 and only .37 in total liabilities these amounts compare very favorably to a closing price of only .69.
Management has recognized conditions have been challenging and recently announced proactive measures to turn the company around. Their recent press release stated “The Company closed three of its unprofitable offices this year, and we will not rule out closing other underperforming branches."
"Right now, reducing our overall general and administrative expenses is a top priority. We are maintaining tight controls over spending, and continue to critically review our cost-cutting options. We are prepared to implement some of those options if a turnaround is slow in coming."
The full story
http://biz.yahoo.com/prnews/080707/aqm079.html?.v=54
The employment industry may be the last place most investors would look for a new investment opportunity. But JOB listed on the AMEX may interest some adventuress investors.
Let’s start with a very brief introduction and some negatives. The CEO total compensation for 2007 was ~543,041. But with only 5.17 million shares outstanding the CEO costs approximately .11 per share or 3% of the last 12 months of revenues. This payment is significantly higher than their staffing industry group.
The current quarterly revenue compared to the prior year’s quarter dropped 21.60%. But the enterprise to revenue is the lowest in the industry near .07. With cash per share at .91 and only .37 in total liabilities these amounts compare very favorably to a closing price of only .69.
Management has recognized conditions have been challenging and recently announced proactive measures to turn the company around. Their recent press release stated “The Company closed three of its unprofitable offices this year, and we will not rule out closing other underperforming branches."
"Right now, reducing our overall general and administrative expenses is a top priority. We are maintaining tight controls over spending, and continue to critically review our cost-cutting options. We are prepared to implement some of those options if a turnaround is slow in coming."
The full story
http://biz.yahoo.com/prnews/080707/aqm079.html?.v=54
7/13/2008
Quality Value Investing Articles
Free Cash Flow vs Unlevered Free Cash Flow
Equity Isn't Free
Competitor Comparison Spreadsheet
Mosaic Chapter 17: Yes, But I Like to Punt!
Mosaic Chapter 15: On Avoiding Enron-itis!
The Twenty Best Financial Blogs
Characteristics of Successful Investors
Psychology and The Markets
A S
Equity Isn't Free
Competitor Comparison Spreadsheet
Mosaic Chapter 17: Yes, But I Like to Punt!
Mosaic Chapter 15: On Avoiding Enron-itis!
The Twenty Best Financial Blogs
Characteristics of Successful Investors
Psychology and The Markets
A S
7/08/2008
SmartPros Acquires Loscalzo Associates
SPRO was first mentioned on the Nano Cap Value Filter 07/03/ See post below
http://shadowstock.blogspot.com/2008_07_06_archive.html
http://biz.yahoo.com/pz/080707/145838.html
<<“HAWTHORNE, N.Y., July 7, 2008 (PRIME NEWSWIRE) -- SmartPros Ltd. (NasdaqCM:SPRO - News), a leader in the field of accredited professional education and corporate training, today announced that it has acquired Loscalzo Associates. Loscalzo is a leading provider of live accounting- and auditing-related CPE programs, conferences and seminars. They deliver numerous seminars each year through co-sponsorship with state CPA societies, accounting firms, and associations of accounting firms. “
``Loscalzo Associates is a perfect addition to the SmartPros portfolio of companies, and will greatly enhance our service offerings in the accounting and finance markets,'' said Allen Greene, SmartPros Chairman and CEO. ``SmartPros core products have been focused on self-study and online learning, while Loscalzo Associates has developed an incredible channel program to deliver CPE programs via live conferences and seminars. With Loscalzo Associates offerings in the mix, SmartPros now offers a complete blended learning environment for accounting- and finance-related organizations on a national level. Loscalzo Associates' clients have been asking for more technology, while SmartPros clients have been looking to augment their programs with more live training. It is our largest acquisition to date, and meets our criteria of being accretive within one year.''
Loscalzo Associates (http://www.loscalzo.com/), formed in 1981 by Margaret Loscalzo, will operate as a wholly owned subsidiary of SmartPros Ltd., and will continue its operations from its current Red Bank, N.J., headquarters. Ms. Loscalzo, who has built this distinguished company, will remain President and head the subsidiary with the current staff.
``SmartPros' strength in the self-study and eLearning markets is a great complement to our existing live seminar programs,'' said Margaret Loscalzo, Founder and President of Loscalzo Associates. ``Through this transaction we will continue to offer our clients our existing programs, but can also leverage SmartPros' technology to enhance our curriculum.''
SmartPros will host a teleconference today beginning at 9:30 a.m. ET to discuss some details of the purchase, and invites all interested parties to join management in a discussion regarding this meaningful development. The conference call can be accessed via telephone by dialing 1-800-240-8658.
About SmartPros Ltd.
Founded in 1981, SmartPros Ltd. is an industry leader in the field of accredited professional education and corporate training. Its products and services are primarily focused in the accredited professional areas of corporate accounting, financial management, public accounting, governmental and not-for-profit accounting, financial services, banking, engineering, legal, ethics and compliance, and information technology. SmartPros is a leading provider of professional education products to Fortune 500 companies, as well as the major firms and associations in each of its professional markets. SmartPros provides education and content publishing and development services in a variety of media including Web, CD-ROM and video. Our subscription libraries feature hundreds of course titles and 2,300+ hours of accredited education. SmartPros' proprietary Professional Education Center (PEC) Learning Management System (LMS) offers enterprise distribution and administration of education content and information. In addition, SmartPros produces a popular news and information portal for accounting and finance professionals serving more than one million ads and distributing more than 200,000 subscriber email newsletters each month. SmartPros' network of sites averages more than 450,000 monthly visits, serving a user base of 500,000+ profiled members. Visit: http://www.smartpros.com/>>
http://shadowstock.blogspot.com/2008_07_06_archive.html
http://biz.yahoo.com/pz/080707/145838.html
<<“HAWTHORNE, N.Y., July 7, 2008 (PRIME NEWSWIRE) -- SmartPros Ltd. (NasdaqCM:SPRO - News), a leader in the field of accredited professional education and corporate training, today announced that it has acquired Loscalzo Associates. Loscalzo is a leading provider of live accounting- and auditing-related CPE programs, conferences and seminars. They deliver numerous seminars each year through co-sponsorship with state CPA societies, accounting firms, and associations of accounting firms. “
``Loscalzo Associates is a perfect addition to the SmartPros portfolio of companies, and will greatly enhance our service offerings in the accounting and finance markets,'' said Allen Greene, SmartPros Chairman and CEO. ``SmartPros core products have been focused on self-study and online learning, while Loscalzo Associates has developed an incredible channel program to deliver CPE programs via live conferences and seminars. With Loscalzo Associates offerings in the mix, SmartPros now offers a complete blended learning environment for accounting- and finance-related organizations on a national level. Loscalzo Associates' clients have been asking for more technology, while SmartPros clients have been looking to augment their programs with more live training. It is our largest acquisition to date, and meets our criteria of being accretive within one year.''
Loscalzo Associates (http://www.loscalzo.com/), formed in 1981 by Margaret Loscalzo, will operate as a wholly owned subsidiary of SmartPros Ltd., and will continue its operations from its current Red Bank, N.J., headquarters. Ms. Loscalzo, who has built this distinguished company, will remain President and head the subsidiary with the current staff.
``SmartPros' strength in the self-study and eLearning markets is a great complement to our existing live seminar programs,'' said Margaret Loscalzo, Founder and President of Loscalzo Associates. ``Through this transaction we will continue to offer our clients our existing programs, but can also leverage SmartPros' technology to enhance our curriculum.''
SmartPros will host a teleconference today beginning at 9:30 a.m. ET to discuss some details of the purchase, and invites all interested parties to join management in a discussion regarding this meaningful development. The conference call can be accessed via telephone by dialing 1-800-240-8658.
About SmartPros Ltd.
Founded in 1981, SmartPros Ltd. is an industry leader in the field of accredited professional education and corporate training. Its products and services are primarily focused in the accredited professional areas of corporate accounting, financial management, public accounting, governmental and not-for-profit accounting, financial services, banking, engineering, legal, ethics and compliance, and information technology. SmartPros is a leading provider of professional education products to Fortune 500 companies, as well as the major firms and associations in each of its professional markets. SmartPros provides education and content publishing and development services in a variety of media including Web, CD-ROM and video. Our subscription libraries feature hundreds of course titles and 2,300+ hours of accredited education. SmartPros' proprietary Professional Education Center (PEC) Learning Management System (LMS) offers enterprise distribution and administration of education content and information. In addition, SmartPros produces a popular news and information portal for accounting and finance professionals serving more than one million ads and distributing more than 200,000 subscriber email newsletters each month. SmartPros' network of sites averages more than 450,000 monthly visits, serving a user base of 500,000+ profiled members. Visit: http://www.smartpros.com/>>
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