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These are our
Value Picks from the August - October
2002 period.
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| MFLO
- (10/31/02 -
$5.51) - On
October
24th Moldflow Corporation, a provider of software solutions for the
design
and manufacture of plastic products, reported 1st quarter revenue
of $8.3 million which was up 2% over the prior year quarter. Net income
was $15,000 or 0 cents a share. Pro forma net income was $174,000 or 2
cents a share, which excluded non cash charges related to the
amortization
of acquired intangible assets. The results were ahead of expectations.
Moldflow expects second quarter revenue of $8.4-8.6 million and pro
forma
earnings, which would exclude non-cash amortization expenses, to be
between
0 and 1 cent per share. MFLO trades at 1.6x sales. Tangible book value
is $4.67 per share. The company has $49.2 million in cash and
securities
which comes out to $4.82 a share, and they carry no debt. |
| SOLD AT $9.35 - GAIN
OF 70% |
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| WITS
- (10/23/02 -
$2.48) - Witness
Systems, a software provider, reported 3rd quarter revenue of $15.1
million
compared to $15.4 million reported for the same quarter in 2001. Net
loss
was $1.2 million or 5 cents per share. For the 9 months ended September
30th 2002, net income was $100,000 or 0 cents per share. Book value
stands
at $2.96 per share and the company has $61 million in cash and
investments
which comes out to $2.70 per share. Wits trades at less than 1x sales,
below book, and the company carries no debt. On October 15th 2002
Witness
Systems increased their buyback plan from 2 million shares to 10
million
dollars. |
| SOLD AT $4.55
- GAIN OF 83% |
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| PLUM - (09/26/02
- $2.74) - On the July 15, 2002 Plumtree
Software
reported 2nd quarter revenue of $22.6 million compared to $19.4 million
for the same quarter of the prior year. Net income was $1.3 million or
4 cents a share. Pro forma net income was $2.1 million or 7 cents per
share.
Plumtree has $62.8 million in cash and investments which comes out to
$2.14
per share. Tangible book value is $1.88 per share. The stock trades
just
under 1x sales and the company carries no debt. |
| SOLD AT $5.50
- GAIN OF 101% |
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| CATS-
(09/17/02- $2.46)
- On August 28th Catalyst Semiconductor, a provider of
semiconductor
memory products, reported 1st quarter revenue of $12.5 million which
was
up from the $10.5 million reported in the same quarter of the prior
year.
Net income was $1.2 million or 6 cents a share. In the earnings report
the company said that product pricing, while not rebounding, appears to
be no longer deteriorating as their customer inventories appear to be
stabilizing.
The company has a book value of $2.13 per share. They have cash and
equivalents
of $26.8 million or $1.60 a share. The stock has a market cap that is
less
than 1x sales. Catalyst Semiconductor is profitable and debt free. |
| SOLD AT $4.17
- GAIN OF 70% |
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| SCMM
- (09/05/02 - $6.23) - On
July 25th 2002 SCM Microsystems, a provider of hardware and software to
the security and digital media markets, reported revenue of $45 million
down 3% from the same quarter in 2001. Net income was $286,000 or 2
cents
a share. Pro forma net income was $1.6 million or 10 cents a share.
They
expect full year 2002 revenues of $183 - 197 million. At the
current
price SCMM trades at .5x sales. The company has $60.2 million in
cash and investments which comes out to $3.83 per share. Book value is
$8.06 a share and they have no debt. SCM Microsystems plans on
separating
their digital video business from their security business in the hope
of
increasing shareholder value. |
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| CHMD
- (08/25/02 - $4.84)- On
August 12, 2002 Chronimed, Inc., a distributor of prescription drugs,
reported
4th quarter revenue of $101 million (up 15% from the 2001 fourth
quarter)
with pro forma earnings of 8 cents per share. Net income was 21
cents
a share. CHMD sees fiscal 2003 revenues of $430 - 437 million and
pro forma earnings of 37- 39 cents. Increasing revenues and
earnings
should be the catalyst for higher prices. With a market cap of
just
61 million, CHMD is clearly undervalued. Tangible book value is
$4.00
per share. |
| SOLD AT $8.69 - GAIN
OF 80% |
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DATM - (08/18/02
- $7.60) - Datum,
Inc. trades at less than 1x sales and is being acquired by Symmetricon,
Inc.(SYMM). Symm is offering 2.76 shares for each datm
share.
Symm closed at $3.24 which should put DATM at $8.94. We therefore
get a 15% discount right away. DATM has a tangible book value of
approximately $9.00 and SYMM approximately $4.20. SYMM has $54
million
in cash and equivalents and about $7.3 million in debt. SYMM
insiders
have been buying. Even if the acquisition is blocked DATM remains
an undervalued tech stock and trades under book value. A combined
company would also trade under book value and at approximately 1x sales.
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11/01/02
update: Merger is completed. We now hold SYMM
shares at a cost of $2.75.
SOLD
SYMM AT $4.75 - GAIN OF 73%
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These picks were our actual
picks on the dates given.
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They should give you insight
into our stock picking
style
and strategy.
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