Did some last minute portfolio tweaking to end 2007 today
Bought some shares of TCCO,GVSS and another to be named later stock
Sold some AXLE for a tax loss and a bit more CXPO to rebalance it in my portfolio.
It has been one fantastic year overall. It appears I ended 2007 up what is a truly ridiculous 171%.
I believe that would be the best number ever for a year when my portfolio wasn't under $20,000. Quite a number of 100% plus gainers with some over 300% contributed to that including VII, ARTW, EDAC, HLXH, AYSI, DGLY, DYII, CXPO
It has been a great year in microcap land for both investing and trading. I am cautious about 2008 but I will always deploy money when there is a compelling reason for a stock to go up in value. Next year I will likely be a bit more cautious focusing more on stocks that have some resistance to recession should that happen. I am definitely avoiding stocks with negative balance sheets and weak balance sheets will need a bigger up side to get me to take a chance.
I will likely write again later this week with a short write up on a new pick
To all who read this blog I wish you a happy, healthy and prosperous new year.
Gilead
Monday, December 31, 2007
Friday, December 28, 2007
Some recent portfolio moves
Sold about 15% of my CXPO. With the stock up over 100% in a matter of a couple months I decided to take a bit of profit and rebalance my portfolio. I still think fair value is probably in the $25 range.
Added some GVSS at .90. I still think this one is attractive in this range
Don't recall if I mentioned these but I cleared out all my DWCH awhile ago at just under 7 and my AGX around 12.
Have a couple other potential purchases for next week. I will outline them when I get a moment if I decide to buy.
Added some GVSS at .90. I still think this one is attractive in this range
Don't recall if I mentioned these but I cleared out all my DWCH awhile ago at just under 7 and my AGX around 12.
Have a couple other potential purchases for next week. I will outline them when I get a moment if I decide to buy.
TCCO new position
Recently added some TCCO between 5 and 5.15. I am interested in adding some more but I am trying to be patient hoping an impatient seller can drop it back to around 5.
Here is a short write up
TCCO makes secure communications equipment used by government, military, and some private entities. Use in border control applications gives them a degree of sex appeal. They are also relatively recession resistant.
The company earned .34 in its most recent quarter which implies a forward PE under 5.
In addition there is some reason to believe these earnings will be sustainable for the intermediate term. They finished the year with a backlog of 3.7 million dollars up sequentially from 2.5 million at the end of Q3 implying they should have another strong quarter in Q1 which should be announced in the next 4-6 weeks.
In addition they have a rock solid balance sheet with a current ratio of 5, almost 2 dollars a share in cash and a book value of roughly 3 dollars a share.
The low PE, strong backlog, solid balance sheet, and recession resistant nature of their business makes this quite attractive IMO.
I could easily see it doubling on another strong quarter in the next month or so which I think is likely.
Here is a short write up
TCCO makes secure communications equipment used by government, military, and some private entities. Use in border control applications gives them a degree of sex appeal. They are also relatively recession resistant.
The company earned .34 in its most recent quarter which implies a forward PE under 5.
In addition there is some reason to believe these earnings will be sustainable for the intermediate term. They finished the year with a backlog of 3.7 million dollars up sequentially from 2.5 million at the end of Q3 implying they should have another strong quarter in Q1 which should be announced in the next 4-6 weeks.
In addition they have a rock solid balance sheet with a current ratio of 5, almost 2 dollars a share in cash and a book value of roughly 3 dollars a share.
The low PE, strong backlog, solid balance sheet, and recession resistant nature of their business makes this quite attractive IMO.
I could easily see it doubling on another strong quarter in the next month or so which I think is likely.
Thursday, December 20, 2007
Closed out position in ATRM today
Closed out this position today on repeated news items regarding a drop in capital spending
in the IC industry.
Icing on the cake is that Maxim who was their biggest customer last year (50% of sales) has reduced their capital spending. That doesn't bode well and while this quarter will likely be strong it could be ugly after that.
I'll take a small loss and move on to hopefully greener pastures.
in the IC industry.
Icing on the cake is that Maxim who was their biggest customer last year (50% of sales) has reduced their capital spending. That doesn't bode well and while this quarter will likely be strong it could be ugly after that.
I'll take a small loss and move on to hopefully greener pastures.
AYSI huge earnings for Q4
Better than I could have hoped for.
Revenues were up to 3.4 million in Q4 up almost 100% from last year and EPS was up to just over .04
The story here is still in tact with this company. They are supplying the metaphorical and almost literal picks and shovels to support the western australia mining boom. In addition they have quite a competitive advantage in an inexpensive wear plate product that lasts much longer than competing products in the same price range.
Just an FYI. This info came from their NT-10K filing. NT-10k's need to be looked at closely because they frequently contain information about how the earnings numbers were for the quarter.
This is great news though and more importantly the earnings were apparently accomplished with the addition of a second shift that was only active for part of the quarter implying Q1 will be even better.
Revenues were up to 3.4 million in Q4 up almost 100% from last year and EPS was up to just over .04
The story here is still in tact with this company. They are supplying the metaphorical and almost literal picks and shovels to support the western australia mining boom. In addition they have quite a competitive advantage in an inexpensive wear plate product that lasts much longer than competing products in the same price range.
Just an FYI. This info came from their NT-10K filing. NT-10k's need to be looked at closely because they frequently contain information about how the earnings numbers were for the quarter.
This is great news though and more importantly the earnings were apparently accomplished with the addition of a second shift that was only active for part of the quarter implying Q1 will be even better.
Monday, December 17, 2007
INX.V (INXSF) new position
This is a table pounder for me. INX.V is the canadian symbol and INXSF is the US equivilent pink sheet.
First let me put the proper disclaimers here. To me a table pounder is very simply a stock whose potential rewards outweigh the risks by a margin that is absurd. It doesn't mean I am 100% sure the stock will do what I think it will. You will never ever ever get anything more than 90% certainty from me on any investment so if that is what you want move on.
Information presented below is from mixed sources including filings general research and a conversation with their CEO.
These guys have two lines of business. The first one is renting and providing programming services for self service kiosks for surveys, lead generation etc. This is their EDC (electronic data collection)segment. The other business is a mystery shopper business or their MDC segment (manual data collection). The EDC is a better margin business. Overall margins are in the 60%ballpark and expected to improve. They have a nice blue chip client base as well. Canada Post,GM,Best buy etc.
So why is it a table pounder?
Here is the very simple story.
They earned roughly .013 last quarter (untaxed) against a share price around .20. Theyhave stated however they expect 2008 revenue growth to be roughly 40% over 2007. That would put them at 7 million for 2008.
I am projecting they will actually do about 8 million in revenue for 2 reasons. First theyhave a history of beating their projections (more on that later) and second Michael Gaffney threw out an8 million number as a hypothetical in our conversation. This may have been a slip but I believe that is the number he is really thinking.
Doing simple back of the envelope math this is what 8 million gets IMO
Revenue 8,000,000
Gross margin 4,800,000
Operating expenses 3,600,000
Net profit 1,200,000
EPS .10 give or take a penny or two depending on how much they spend on new advertising etc.
These earnings would be untaxed I believe although they could begin recognizing tax expenses towards the end of 2008. They have significant NOL's and I don'texpect them to really pay taxes until 2009.
I asked Gaffney what underlying assumptions were used for the revenue projections and he indicated it is based on existing business rather than quote activity or significant new orders. That leads me to believe actual numbers could be better and possibly quite a bit better than what I noted above. In my best case scenarios they sign some new clients. and do more like 12 million in 2008 and then project another 40% growthyear for 2009 in which case I am retiring on this one for sure.
Given the above I am targeting a conservative EOY price of 1.00 for 2008. I don't want to say what I think the price would be in my best case scenario because its ridiculous.
I think these expectations are sound for a few reasons
First this appears to be rock solid management. They took over in August of 2004 about the time the company was teetering on bankruptcy and revenues cratered down to 160,000 a quarter with huge losses. Since then they have brought the company back from the dead with revenues of 1.4 million last quarter. When they took over SGA expenses were 490k. Today they are up about 25% with revenues up over 800%. They are profitable growing quickly and almost have the balance sheet back in order.
Second management appears very confident. There have been roughly 400,000 shares purchased by insiders in the past few weeks. In addition there were PP's done to directors earlier this year at what appear to be market prices. They are speaking with their dollars that they have great confidence in the companies future.
Third going back to 2004 when current management took over I believe they have met or exceeded every forecast they have made.
Ie Q3 was guided for 1.3 to 1.45 million. They came in at 1.41
Q3 06 was projected for significantly better revs than 05 and came in almost 100% greater
Fiscal 06 was projected to increase 60% over Fiscal 05. They were actually up 115%
Tennox acquisition was projected to more than double revenue in a year. Revenues wereup roughly 170% a year later
etc etc.
Fourth Kiosks are a booming business in general. Here is one generalized article but youcan find many others.
http://www.tradingmarkets.com/.site/news/Stock%20News/731479/
If you send for the report they reference you will find one of the stronger areas seems to be interactive marketing which is a general fit for what INX does.
The warts:
There are a couple negatives as with everything.
First: this quarter coming up is their seasonally weak one. I don't expect any euphoria on this report as they will probably be around break even with some asset write downs.
Second: balance sheet is still recovering from their near death experience in 04.
Third: Their financing arrangement requires them to pay a formula of 3%-10% of their market cap when the loan is up in 5 years or when they pay it off. That implies a current hidden liability of a bit over 200k on the balance sheet.
Thats the narrative see you at $1+ this time next year (I hope)
First let me put the proper disclaimers here. To me a table pounder is very simply a stock whose potential rewards outweigh the risks by a margin that is absurd. It doesn't mean I am 100% sure the stock will do what I think it will. You will never ever ever get anything more than 90% certainty from me on any investment so if that is what you want move on.
Information presented below is from mixed sources including filings general research and a conversation with their CEO.
These guys have two lines of business. The first one is renting and providing programming services for self service kiosks for surveys, lead generation etc. This is their EDC (electronic data collection)segment. The other business is a mystery shopper business or their MDC segment (manual data collection). The EDC is a better margin business. Overall margins are in the 60%ballpark and expected to improve. They have a nice blue chip client base as well. Canada Post,GM,Best buy etc.
So why is it a table pounder?
Here is the very simple story.
They earned roughly .013 last quarter (untaxed) against a share price around .20. Theyhave stated however they expect 2008 revenue growth to be roughly 40% over 2007. That would put them at 7 million for 2008.
I am projecting they will actually do about 8 million in revenue for 2 reasons. First theyhave a history of beating their projections (more on that later) and second Michael Gaffney threw out an8 million number as a hypothetical in our conversation. This may have been a slip but I believe that is the number he is really thinking.
Doing simple back of the envelope math this is what 8 million gets IMO
Revenue 8,000,000
Gross margin 4,800,000
Operating expenses 3,600,000
Net profit 1,200,000
EPS .10 give or take a penny or two depending on how much they spend on new advertising etc.
These earnings would be untaxed I believe although they could begin recognizing tax expenses towards the end of 2008. They have significant NOL's and I don'texpect them to really pay taxes until 2009.
I asked Gaffney what underlying assumptions were used for the revenue projections and he indicated it is based on existing business rather than quote activity or significant new orders. That leads me to believe actual numbers could be better and possibly quite a bit better than what I noted above. In my best case scenarios they sign some new clients. and do more like 12 million in 2008 and then project another 40% growthyear for 2009 in which case I am retiring on this one for sure.
Given the above I am targeting a conservative EOY price of 1.00 for 2008. I don't want to say what I think the price would be in my best case scenario because its ridiculous.
I think these expectations are sound for a few reasons
First this appears to be rock solid management. They took over in August of 2004 about the time the company was teetering on bankruptcy and revenues cratered down to 160,000 a quarter with huge losses. Since then they have brought the company back from the dead with revenues of 1.4 million last quarter. When they took over SGA expenses were 490k. Today they are up about 25% with revenues up over 800%. They are profitable growing quickly and almost have the balance sheet back in order.
Second management appears very confident. There have been roughly 400,000 shares purchased by insiders in the past few weeks. In addition there were PP's done to directors earlier this year at what appear to be market prices. They are speaking with their dollars that they have great confidence in the companies future.
Third going back to 2004 when current management took over I believe they have met or exceeded every forecast they have made.
Ie Q3 was guided for 1.3 to 1.45 million. They came in at 1.41
Q3 06 was projected for significantly better revs than 05 and came in almost 100% greater
Fiscal 06 was projected to increase 60% over Fiscal 05. They were actually up 115%
Tennox acquisition was projected to more than double revenue in a year. Revenues wereup roughly 170% a year later
etc etc.
Fourth Kiosks are a booming business in general. Here is one generalized article but youcan find many others.
http://www.tradingmarkets.com/.site/news/Stock%20News/731479/
If you send for the report they reference you will find one of the stronger areas seems to be interactive marketing which is a general fit for what INX does.
The warts:
There are a couple negatives as with everything.
First: this quarter coming up is their seasonally weak one. I don't expect any euphoria on this report as they will probably be around break even with some asset write downs.
Second: balance sheet is still recovering from their near death experience in 04.
Third: Their financing arrangement requires them to pay a formula of 3%-10% of their market cap when the loan is up in 5 years or when they pay it off. That implies a current hidden liability of a bit over 200k on the balance sheet.
Thats the narrative see you at $1+ this time next year (I hope)
Sunday, December 9, 2007
CIMT new position
My research is very thin here largely due to a dearth of information on this israeli company.
CIMT is a provider of CAD software based in Israel. This pick comes from HWEB a poster on investorshub I have a good deal of respect for. His basic thesis is this
CIMT is trading around 2.60/share. They earned .06 last quarter but that is generally a very seasonally weak quarter. Given their recent acquisition and the stronger quarter coming up its not hard to envision EPS numbers in the .15 range next quarter. If that happens the stock could run significantly given its low float.
As I said the thesis makes sense so I bought a small position. I don't think I have gotten much of a feel for their business but given recent trends a good quarter resulting in significant appreciation seems more likely than not so I felt it was worth a small shot in the dark due to a high amount of reward relative to risk.
I have spent a good amount of time this weekend digging for attractive stocks to take positions in. I did find one that looks very promising that I plan to buy tomorrow. There should be a post here on it by tomorrow evening. This is a canadian trading only stock so unless you can pick it up via something like e-trades international trading or interactive brokers you would not be able to buy it.
CIMT is a provider of CAD software based in Israel. This pick comes from HWEB a poster on investorshub I have a good deal of respect for. His basic thesis is this
CIMT is trading around 2.60/share. They earned .06 last quarter but that is generally a very seasonally weak quarter. Given their recent acquisition and the stronger quarter coming up its not hard to envision EPS numbers in the .15 range next quarter. If that happens the stock could run significantly given its low float.
As I said the thesis makes sense so I bought a small position. I don't think I have gotten much of a feel for their business but given recent trends a good quarter resulting in significant appreciation seems more likely than not so I felt it was worth a small shot in the dark due to a high amount of reward relative to risk.
I have spent a good amount of time this weekend digging for attractive stocks to take positions in. I did find one that looks very promising that I plan to buy tomorrow. There should be a post here on it by tomorrow evening. This is a canadian trading only stock so unless you can pick it up via something like e-trades international trading or interactive brokers you would not be able to buy it.
Saturday, December 1, 2007
more holdings news
AWI.V / AVDWF annonced earnings.
Numbers were excellent and in line with what I guessed.
EPS of .035
year over year earnings growth of 24%
.39 cash on the books.
trailing 12 month EPS of .12
I had been buying at around .50. Ask is currently around .70. I believe it is currently a bargain even at that price. With their strong quarter coming up I think it is an excellent value even at .70
ISFIF announced they are selling their learning division for 800K. I haven't evaluated the move from a business perspective yet but they do continue to raise cash for what I expect is going to be a buyout or complete liquidation of assets to shareholders.
Numbers were excellent and in line with what I guessed.
EPS of .035
year over year earnings growth of 24%
.39 cash on the books.
trailing 12 month EPS of .12
I had been buying at around .50. Ask is currently around .70. I believe it is currently a bargain even at that price. With their strong quarter coming up I think it is an excellent value even at .70
ISFIF announced they are selling their learning division for 800K. I haven't evaluated the move from a business perspective yet but they do continue to raise cash for what I expect is going to be a buyout or complete liquidation of assets to shareholders.
GVSS large insider purchase
Form 4 was filed by the board chairman. Over a 2 day period he purchased 250,000 shares at prices up to .93
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5575135&Type=HTML
This is a big confidence booster for me especially considering the guy has 2 million + shares. The stock has had a nice little pop since my buy ins at .73-.75 but at this point my previous review plus this kind of insider confidence has me willing to pay a bit more. I think I might add a few shares at .80 if they become available. If .93 is good enough for an insider .80 should be good enough for me.
http://yahoo.brand.edgar-online.com/fetchFilingFrameset.aspx?FilingID=5575135&Type=HTML
This is a big confidence booster for me especially considering the guy has 2 million + shares. The stock has had a nice little pop since my buy ins at .73-.75 but at this point my previous review plus this kind of insider confidence has me willing to pay a bit more. I think I might add a few shares at .80 if they become available. If .93 is good enough for an insider .80 should be good enough for me.
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