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LNUX - (recommended
to subscribers
on 12/04/05)
BOUGHT
at $1.65 SOLD
at $4.00
On November
29th 2005 VA Software Corporation, a provider of software and services
for IT professionals and software developers, reported fiscal 1st
quarter 2006 revenue of $8.2 million. This was up from the $7 million
reported in the 1st fiscal quarter of 2005. On a GAAP basis the net
loss was $1.2 million or 2 cents per share which compares to a loss of
$1.6 million in the year earlier period. Gross margins were 50%, up
slightly from a year ago.
The company's 3 major segments are it's online
media segment, it's E-commerce segment and it's Sourceforge segment.
The online media segment consists of a network of websites serving the
IT professional and software development community. Revenue is
generated from online advertising. During the just completed quarter
revenue was up 40% from the prior year in this segment. In fiscal 2005
the online media segment accounted for 25% of total revenue. The
E-commerce segment consists of online sales of various retail products.
In fiscal 2005 this segment accounted for 45% of total sales. This
segment sees a substantial portion of it's annual sales during the
November - December quarter. The Sourceforge segment which consists of
enterprise web based software applications accounted for 23% of total
sales in fiscal 2005.
During fiscal 2005 no single customer
accounted for 10% or more of total revenue. Gross margins in fiscal
2005 were 50% which compares to 47% in fiscal 2004. Losses have been
shrinking and the company has transformed itself and is no longer the
hardware company it used to be. The CEO recently stated that the
company should turn profitable during the next few quarters.
LNUX has cash and investments worth $35.9
million or 58 cents per share. Book value is 50 cents per share and the
company carries no debt. At the current level the stock has a
price-to-sales ratio of 3 and a price-to-book ratio of 3.3.
Looking at the chart below LNUX has closed
above it's 200 day moving average for the first time in more than 6
months, doing so after consolidating just under the 200 day moving
average on heavy volume all last week. The recent strength also comes
after asuccessful test of the April 2005 lows.
2/23/06 - SOLD AT $4 FOR A GAIN OF 142%. DURING THE SAME TIME
PERIOD THE NASDAQ WAS
UP 0%.
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