ShadowStock ... Deep Value Investing

Reported 05/23/13 Insider Value Based Insider Buys

noreply@blogger.com (ShadowStock) — Fri, 24 May 2013 05:00:00 +0000

Symbol	Co Name
WLDN	Willdan Group, Inc.
BSQR	BSQUARE CORP /WA
DRAD	DIGIRAD CORP
SANW	S&W Seed Co
HTCH	HUTCHINSON TECHNOLOGY INC
LIOX	LIONBRIDGE TECHNOLOGIES INC /D
MERC	MERCER INTERNATIONAL INC.
KAMN	KAMAN CORP
HL	HECLA MINING CO/DE/

Click for quoteson all stocks above

Building Value Before it’s Reported on the Financial Statements

noreply@blogger.com (ShadowStock) — Fri, 24 May 2013 01:42:00 +0000

Datawatch (DWCH) is a stock I’ve owned for some time. In fact I did a query on the blog, click to view.

Over time the company has continued to improve with the stock market recognizing some of their achievements. But more importantly the real story begins over the past ~ 1.5 years. Material improvements in operations have been aggressively achieved that have yet to be fully realized on the financials.

Taken from my SeekingAlpha post, Datawatch: Deeper ValueFor A Lower Price.

As an investor, ask yourself why successful executive leaders, management and staff would leave respected roles at leading secure technology/BI employers to risk it all at a tiny company. These moves over the past year or so demonstrate the underlying potential future value of Datawatch. These new executive recruits have years of knowledge in this analytic space to make an informed decision.

Let's take a brief look at some the recent recruits. Recruitment talent is far more relevant to Datawatch's future value than any other historical financial metric. It started with Vice chairman Dave Mahoney, former CEO of Applix and other technology successes. Mahoney joined the board, then months later now CEO Michael Morrison left IBM/Cognos. Morrison was the former COO of Applix. Note Applix was acquired by Cognos then quickly by IBM, where both Morrison (COO) and Mahoney (CEO) were executives.

Some other new executivemanagement that have recently joined Datawatch after CEO Morrison include Ben Plummer, Mike Carroll, Jon Pilkington and others, including new CFO (James Eliason) announced over the past few weeks. Eliason has deep industry corporate finance along with mergers and acquisitions experience. Ben Plummer joined Datawatch from "IBM Cognos where he was vice president, data discovery and analytics". Mike Carroll "led one of the highest performing of the five commercial teams within the IBM Business Analytics group", before joining Datawatch. Jon Pilkington, brings 18 years in the business intelligence industry including 13 years at various executive roles with Cognos. Also critical there is an entire new sales and marketing team with proven BI talent closing large deals.

The impact of these human capital changes is jaw dropping. Proven talent recruitment is near impossible for a tiny company that was in a slow yearly decline. I emphasize the recruitment success because it should provide investors additional confidence in DWCH 's technology and future continued growing market potential.

Continued .. on “Datawatch… Deeper value for alower price”

Let’s not forget over 40,000 organizations worldwide are using Datawatch’s products and services, including 99 of the Fortune 100. Also, new “Blueprint” solutions to address specific operational needs such as the new machine data accelerator. This new blueprint has many of the same exact log and activity analysis as Splunk (SPLK).

Another blueprint used in Healthcare is 835 analytics. . “Datawatch’s solutions have helped over 1000 healthcare organizations reduce costs, improve decision making, support strategic objectives, increase ROI, and ultimately improve the care provided.”

05/21/13 Insider Value Based Nano Cap Insider Purchases

noreply@blogger.com (ShadowStock) — Wed, 22 May 2013 03:56:00 +0000

Symbol	Co Name
ORBT	ORBIT INTERNATIONAL CORP
LIOX	LIONBRIDGE TECHNOLOGIES INC
SANW	S&W Seed Co

Click for quotes on stocks above

Click for quoteson yesterday’s Post for Insider Buys

Insider Buys Reported 05/20/13: Micro Cap Value

noreply@blogger.com (ShadowStock) — Tue, 21 May 2013 04:55:00 +0000

Symbol	Co Name
LGL	LGL GROUP INC
DRAD	DIGIRAD CORP
HA	HAWAIIAN HOLDINGS INC
CCC	CALGON CARBON CORPORATION
ERA	ERA GROUP INC.

05/16/13 Positive Insider Activity

noreply@blogger.com (ShadowStock) — Fri, 17 May 2013 05:00:00 +0000

VIDE: VIDEO DISPLAY Insider Purch 8,000 Shares for $29,600 at $ 3.70

Shares Owned after Purch 2,950,238: Industry = Computer Peripherals 52 Wk Return = -6.14 Inside Ownership 70.72%

PDEX: PRO DEX INC Insider Purch 3,425 Shares for $6,508 at $ 1.90

Shares Owned after Purch 272,255: Industry = Medical Instruments & Supplies 52 Wk Return = -4.52 Inside Ownership 33.52%

HAMP: HAMPSHIRE Insider Purch 7,200 Shares for $20,448 at $ 2.84

Shares Owned after Purch 50,000:Industry = N/A 52 Wk Return = 27.56% Inside Ownership 71.35%

CSV: CARRIAGE SER Insider Purch 3,000 Shares for $51,810 at $17.27

Shares Owned after Purch 15,825:Industry = Personal Services 52 Wk Return = 140.36 Inside Ownership 25.53

CKEC: CARMIKE CINE Insider Purch 324 Shares for $5,398 at $16.66

Shares Owned after Purch 293,595:Industry = Movie Production, Theaters 52 Wk Return = 15.52 Inside Ownership 13.92

DRAD: DIGIRAD CORP Insider Purch 5,000 Shares for $12,000 at $ 2.40

Shares Owned after Purch 526,985:Industry = Medical Appliances & Equipment 52 Wk Return = 5.70 Inside Ownership 11.36

MYE: MYERS INDUST Insider Purch 2,000 Shares for $30,100 at $15.05

Shares Owned after Purch 11000:Industry = Rubber & Plastics 52 Wk Return = -6.98% Inside Ownership 20.74%

SPRT: Support.com, Insider Purch 1,200 Shares for $5,160 at $ 4.30

Shares Owned after Purch 7,577,535:Industry = Internet Software & Services 52 Wk Return = 70.19 Inside Ownership 0.18%

DYAX: DYAX CORP Insider Purch 5,000 Shares for $12,500 at $ 2.50

Shares Owned after Purch 22971:Industry = Biotechnology 52 Wk Return = 54.66% Inside Ownership 3.36%

SPA: SPARTON CORP Insider Purch 1,695 Shares for $24,917 at $14.70

Shares Owned after Purch 48,030:Industry = Diversified Electronics 52 Wk Return = 71.73 Inside Ownership 16.17

WINA: WINMARK CORP Insider Purch 2,000 Shares for $121,780 at $60.89

Shares Owned after Purch 1,685,278:Industry = Specialty Retail, Other 52 Wk Return = 15.40% Inside Ownership 54.86%

Click to view quotes on all the stocks above

Cash Rich Oversold Negative Enterprise Value

noreply@blogger.com (ShadowStock) — Tue, 14 May 2013 04:25:00 +0000

Amtech Systems Inc. (ASYS) founded in 1981 engages in the "design, assembly, sale, and installation of capital equipment and related consumables used in the manufacture of wafers, primarily for the solar/photovoltaic, semiconductor, silicon wafer, and micro electromechanical systems industries."

52 week change of -16.70%.

Price = 3.99, Per share values … EV = -.20. ; BV = 8.09; Cash = 4.07 ; GP = .96 ; EBITDA -2.64 ; FCF = .85

Industry = Semiconductor Equipment & Material

Market Cap = 38,060,000 ; EV = -1,890,000 ; Revenue = 52,720,000

YOY Revenue Change =-62.40%

Electronic Systems Technology Inc. (ELST) "engages in the research and development, manufacture, and marketing of wireless modem products and accessories primarily in the United States, Mexico, Brazil, Peru, and Canada. The company was founded in 1982 and is based in Kennewick, Washington."

52 week change of 6.06%.

Price = .35, Per share values … EV = -.07. ; BV = .57; Cash = .42 ; GP = .23 ; Rev = .41 ; EBITDA .01 ; FCF = -.02

Industry = Communication Equipment

Market Cap = 1,810,000 ; EV = -379,960 ; Revenue = 2,110,000

YOY Revenue Change =+42.20%

Maxygen, Inc. (MAXY) Maxygen, Inc., a “biopharmaceutical company, focuses on the discovery and development of protein pharmaceuticals for the treatment of disease and serious medical conditions in the United States. The company was founded in 1996 and is headquartered in San Mateo, California.”

52 week change of -60.60%.

Price = 2.37, Per share values … EV = -.53. ; BV = 2.85; Cash = 2.92 ; GP = 1.08 ; Rev = 1.10 ; EBITDA .76 ; FCF = .65

Industry = Research Services
Market Cap = 65,870,000 ; EV = -14,710,000 ; Revenue = 30,010,000

YOY Revenue Change =-50.00%

Westell Technologies, Inc. (WSTL)was founded in 1980. WSTL "designs, manufactures, and distributes telecommunications products to telephone companies and other telecommunications service providers."

52 week change of -7.98%.

Price = 1.96, Per share values … EV = -.03. ; BV = 2.91; Cash = 1.98 ; GP = .66 ; Rev = .40 ; EBITDA -.14 ; FCF = .65

Industry = Communication Equipment

Market Cap = 113,990,000 ; EV = -1,640,000 ; Revenue = 40,710,000

YOY Revenue Change = -38.00%

CLICK FOR QUOTES ON ALL 4 STOCKS

Canadian Pink Sheet Listed.. Aggressive Cannibals (company share buybacks over several years)

noreply@blogger.com (ShadowStock) — Thu, 09 May 2013 18:09:00 +0000

Note that most of the share count reduction was over the trailing 12 months. Some of the stocks listed showed a slight increase in share count from 2008 or 2007.

ABSSF: (BOS:Toronto)

Airboss of America Corp” develops, manufactures, and sells rubber compounds and specialty rubber-based products for the transportation, defense, military, and industrial markets primarily in North America. It offers rubber compounds, including mixed rubber for use in industrial products for mining, transportation, military, automotive, and conveyor belting; defense products, such as protective wear for military and other first response applications; and industrial products, including vulcanized and non-vulcanized rubber based products, as well as mixing, calendaring, and extrusion. AirBoss of America Corp. was founded in 1989 and is based in Newmarket, Canada.”

AGFMF: AGF Management Limited AGF/B:Toronto Stock Exchange

“AGF Management Limited is a publicly owned investment manager. The firm primarily provides its services to institutional and private clients. It manages separate client-focused equity, fixed income, and balanced portfolios. The firm also launches and manages equity, fixed income, and balanced mutual funds and hedge funds for its clients. It invests in the public equity and fixed income markets across the globe. The firm primarily invests in growth and value stocks across all capitalizations. For fixed income, it invests in government and agency bonds of Canada. AGF Management Limited was founded in 1957 and is based in Toronto, Canada.”

AXANF :Axia NetMedia Corporation: (AXX:Toronto)

“provides broadband services and solutions over fibre optic communications networks.”

OLNCF: Omni-Lite Industries Canada Inc (OML:Venture)

“engages in the development, production, and marketing of specialized metal matrix composite, aluminum, carbon, and stainless steel alloy products to Fortune 500 companies. The company provides precision components utilizing advanced composite materials and other alloyed materials, and computer-controlled cold forging techniques. It offers vibration resistant stainless steel fastener components and jet engine components for the aerospace industry; transmission valves and airbag retainer rivets for the automotive industry; inventory control cups and other key components for inventory control systems for the commercial industry; links and head caps for the military sector; and ceramic track spikes for the sports and recreation industry. The company also distributes its track spikes online. It serves customers primarily in the United States, Canada, and the Barbados.”

RONAF : Rona Inc. (RON:Toronto)

RONA inc. “engages in the distribution and retail of hardware, home improvement, and gardening products in Canada. As of March 11, 2013, it operated approximately 800 corporate, franchise, and affiliate stores; and a network of 14 hardware and construction-materials distribution centers, as well as approximately 60 sales outlets and 4 distribution centers for plumbing and HVAC market. RONA inc. was founded in 1939.”

TCLAF: Transcontinental Inc. (TCL/A):Toronto Stock Exchange

“provides media and marketing activation solutions in Canada and the United States. The company creates products and services that allow businesses to attract, reach, and retain their target customers. It engages in printing activities for publishers of magazines, books, and newspapers, as well as retail customers; and publishing magazines, newspapers, books, custom content, and mass and personalized marketing materials. The company also operates a digital network of approximately 3,500 Websites and a door-to-door network for distributing advertising material that allows advertisers to reach consumers directly. In addition, it offers interactive marketing products and services that use new communication platforms supported by marketing strategy and planning services, database analytics, pre-media, e-flyers, email marketing, custom communications, and mobile solutions. Further, the company provides television content creation services that could be delivered on various communication platforms, from TV channels for general broadcasting to new media, Internet, and mobile channels. Transcontinental Inc. was founded in 1976 and is headquartered in Montreal, Canada.”

TransForce Inc. (TFIFF) : TFI:Toronto Stock Exchange

TransForce Inc., “provides freight transportation and logistics services. It operates through four segments: Package and Courier, Less-Than-Truckload, Truckload, and Specialized Services. The Package and Courier segment provides non-expedited business-to-business parcel delivery services in Canada. The Less-Than-Truckload segment provides partial-load general-freight shipment to customers in North America. The Truckload Segment engages in the full-load transport of general merchandise in North America; and provides various value-added services, including bulk material shipments, and expedited deliveries and transport by open trailers. The Specialized Services segment provides a range of logistics services, which include international freight forwarding, fleet management, and personnel placement agencies; integrated management of industrial, commercial, and residential solid waste collection and treatment; and rig relocation services, including disassembly, transportation, and reassembly of oil and gas drilling rigs to the energy industry. As of December 31, 2012, the company had 11,380 power units and 11,700 trailers. TransForce Inc. is headquartered in Saint-Laurent, Canada.”

URNAF: Urbana Corp... URB:Toronto

"Urbana Corporation is a publically owned investment manager. The firm invests in public equity markets across the globe. Its investments are managed by Caldwell Investment Management Ltd. Urbana Corporation is based in Toronto, Canada."

Click for quotes on all the stocks above

Value Based Canadian Stocks Listed on the "Pink Sheets"

noreply@blogger.com (ShadowStock) — Tue, 07 May 2013 05:29:00 +0000

I started a search for value based pink sheet listed Canadian stocks. Many attractive Canadian stocks trade on the pink sheets. Hopefully I can find useful market inefficiencies existing on the pink sheet for all countries, exchanges and market size.

A market maker must be willing to trade the stock to obtain a pink sheet listing. Some companies want to be traded on the pink sheets to gain exposure to U.S. investors. There are many benefits to the company. This dual listing on the pinks allows US investors to purchase shares without going to the Canadian exchanges. Many online brokers like Ameritrade don’t execute trades on foreign exchanges. So using the pink sheets may allow some exposure to quality Canadian, other countries or US based looking to avoid excessive regulation costs. Today I want to get my feet wet by introducing some value using the balance sheet and focusing on Canada. I believe there are so many more opportunities but this journey will take more time and effort. As you know, just remember with all transaction on the pink sheets you must use limit orders.

Once again I will have to update the post slowly. Additional input for tomorrow and likely the day after. I wanted to get started today. Nothing too exciting at first glance but I guess value looks boring. 3 stocks for tonight that will be updated tomorrow are IDGBF,DLTOF,ADFJF

IDGBF: (IDG Toronto exchange)Indigo Books & Music Inc was founded in 1940 and is headquartered in Toronto, Canada. Indigo is “an e-commerce retail destination that sells books, gifts, toys, DVDs, and music. It also operates seasonal kiosks and year-round stores in shopping malls, which sell calendars, games, and gifts. As of March 31, 2012, the company operated 97 superstores under the Chapters, Indigo, and the World?s Biggest Bookstore banners; and 143 small format stores under the Coles, Indigo, Indigospirit, SmithBooks, The Book Company, and Pistachio banners.”

Negative enterprise value and 3.96% current dividend yield.
Value was created with increase in equity, reduced debt, stable share count, from 2008 to the current period.

Market Cap:281.70M , Enterprise Value: -51.72M

Price/Sales: 0.29 Price/Book:0.73

Revenue: 920.82M , Revenue Per Share:36.46

Qtrly Revenue Growth:-4.90% ,EBITDA:19.87M

Total Cash:320.72M

Total Cash Per Share (mrq):12.68 ,Book Value Per Share (mrq):14.55

Price on 05/06/13 = 11.14 , 52-Week Change:28.19%

52-Week High (May 6, 2013):11.14 , 52-Week Low (Aug 13, 2012):7.52

ADFJF:(DRX Toronto Exchange) ADFJF was founded in 1956 and provides fabrication of complex structural steel and heavy built-up steel components for the non residential construction industry.

Equity per share continues to compound with equity per share value of 2.57 for 2008 to the most recent quarterly balance of 2.83. Annual profits have reduced total liabilities from 2009 balance of 29.59M to the MRQ 15.24M. Total share count was also reduced from 2009 balance of 36.20M shares outstanding to the MRQ balance of 32.45M.

Market Cap: 41.43M , Enterprise Value: 17.61M

Price/Sales: 0.98, Price/Book: 0.44

Enterprise Value/Revenue: 0.42 ,Enterprise Value/EBITDA: 14.15

Qtrly Revenue Growth:-1.90%

Book Value Per Share: 2.87, 52-Week High:1.38 , 52-Week Low:1.12

Total Cash:27.66M, Cash Per Share: 0.85

Total Debt:3.73M, Total Debt/Equity: 4.01

Current Ratio:3.51, Book Value Per Share: 2.87

The stock was 1.30 Canadian dollars on 12/31/2008 today the price was 1.42 Canadian dollars.

They continue to aggressively buyback shares. On December 6,2012 "the company will repurchase up to 1,552,731 subordinate voting shares, representing 8.57% of the shares outstanding and 10% of the public float”

Price 05/06/13 = 1.25USD

DLTOF: (DDL Toronto Exchange) Danier Leather designs, manufactures, distributes and retails leather apparel and accessories. Danier’s products are sold at its 89 shopping mall stores, street-front stores and large format power centers. Founded in 1972

The stock trades near its 52 week high.

They have done a good job of posting profits, reducing debt, building equity and keeping share count stable. But the stock 52 week price change is +18.46%.

2.38 CND December 31, 2008 to the current price of 12.51CND. So the stock price has moved this and prior years.

Market Cap: 48.71M, Enterprise Value: 24.77M

Price/Sales: 0.31, Price/Book: 0.81 ,Enterprise Value/Revenue: 0.16

Enterprise Value/EBITDA: 4.29, Qtrly Revenue Growth: -4.40%

Total Cash: 23.93M , Cash Per Share: 6.21

Current Ratio: 4.36 Book Value Per Share: 15.61

Additional updates tomorrow

Margin of Safety Value Driven Ideas: additional update 05/02/13

noreply@blogger.com (ShadowStock) — Fri, 03 May 2013 03:43:00 +0000

SYNC: Synacor Inc “is a provider of startpages, TV Everywhere solutions, Identity Management (IDM) and various cloud-based services across multiple devices for cable, satellite, telecom and consumer electronics companies.”

Price on post date 04/22/13 = $2.86

ROIC was 2011 = 25.00 , 2012 =14.09 , TTM =14.09

Recent insider director purchases during March 2013, 40,000 shares @ 3.02 and 33,000 shares @ 2.99

52 week change of -67.00%, YOY quarterly change in Revenue = +11.20%

Per Share Data = Cash 1.54, Revenue 5.00, GP 2.03, EBITDA =.35

Price = 3.69 EV per share = 1.45,

EV/Sales = .33

Shares moved sharply higher on Wed May 1 after they announced a deal with Verison that would expand access to television shows and movies available online to Verizon's 5 million FiOS television subscribers.

HSON: Price on 04/22/13 = $3.35

OIIM: Price on 04/22/13 = $3.17

O2Micro International Ltd: “O2Micro International, Ltd designs, develops and markets high performance integrated circuits for power management, security applications and systems security solutions”

OIIM is financially strong with an aggressive share buybacks from 2008 to the current period. Share count was reduced by 16.75% from a 2008 share count of 37,256,620 to the most recent period count of 31,043,800.

52 week price change is -36.08%.

Market Cap: 104.91M , Enterprise Value:1.29M

Price/Sales:1.02 , Price/Book: 0.66

Enterprise Value/Revenue:0.01, Qtrly Revenue Growth (yoy):-41.30%

Gross Profit:71.01M

EBITDA:-14.72M

Total Cash:97.32M , Total Cash Per Share:3.25

Current Ratio:10.86, Book Value Per Share:5.02

INTX: Price on 04/22/13 = $8.89

ELSE:Price on 04/22/13 = $4.38

Negative Enterprise Value

noreply@blogger.com (ShadowStock) — Tue, 30 Apr 2013 05:45:00 +0000

I will continue the updating tomorrow.

The stocks below were partially selected based on a negative enterprise value.

CMKG: mktg, inc. (CMKG): CMKG was founded in 1972. It’s an integrated sales promotional and marketing services agency in the United States.

Revenue per share was 15.84 or 130.46M for the TTM. TTM gross profit of 102.90M or 12.24 per share, EBITDA of 6.11M, OI of .64 per share, and a book value of 1.42 per share. Cash per share is 1.36. 2013 positive insider activity.

CDCO: CDCO: Comdisco Holding Company, Inc. “does not have significant operations. The company is a successor company to Comdisco, Inc., which emerged from bankruptcy under the plan that became effective in August 2002. Its post-bankruptcy operations are limited to an orderly run-off or sale of its remaining assets. Comdisco Holding Company, Inc. was founded in 1969 and is based in Rosemont, Illinois”

Per 10k .. Berkshire Hathaway, Inc. owns 1,538,377 of 38.18% of shares outstanding

Davidson Kempner Partners 23.50%, Horizon Kinetics LLC 6.98% ,Haphazard Investors LLC 8.47%

Price of $5.10 (20.54M), with a per share EV of -3.18 (-12.82M). Cash is 7.18 per share.

CECO: Career Education Corp.

COSN: CoSine Communications, Inc.

DGTC: DGT Holdings Corp

LOOK: LOOK: LookSmart, Ltd. founded in 1996 “LookSmart, Ltd. provides search and display advertising network solutions in the United States, Europe, the Middle East, and Africa. “
LookSmart continues to bleed cash and loose the few customers remaining. July 2012 the company received a 1.00 per share offer from Peek Investments LLC . The offer was foolishly rejected by the board.

Per share price = .71 , Cash = .92, BV = .85, Revenue = .91, GP = .32

OIIM: O2Micro International Ltd.

PRLS: Peerless Systems Corp

SCMR: Sycamore Networks Inc

Quotes on the stocks above

"Margin of Safety Value Driven Ideas" (04/22/13) Update Continued for MFLX & FMAO

noreply@blogger.com (ShadowStock) — Thu, 25 Apr 2013 02:59:00 +0000

MFLX:Multi-Fineline Electronix, Inc. “provides printed circuit and component assembly solutions to the electronics industry. The Company's services include design and application engineering, prototyping and high-volume manufacturing, and turnkey component assembly and testing”

MFLX value has been enhanced with a -45% price change over 52 weeks near a 3 year low. It now trades at a historical low valuation based on P/B. P/B is .79 near 10 year low of .80 versus 5 year average of 1.30, P/S is .40 versus 5 year average of .70. and at 3 year low of .40. Margins have been on the decline but margins mean revert in this industry

Strong financial position and with outsized industry under performance makes MFLX a micro cap value stock that is likely to mean revert. The most recently reported quarter 12/31/12 revenue increased by 21% to 289.7M.

MFLX Price on post date 04/22/13 = $14.02

Market Cap:357.87M ; Enterprise Value:256.44M

Price/Sales 0.40; Price/Book:0.77

Enterprise Value/Revenue:0.30 ; Enterprise Value/EBITDA:3.17

Qtrly Revenue Growth:21.00% ; Total Cash Per Share:3.90

52-Week Change:-44.73% ; Held by Insiders: 63.22%

FMAO: FMAO - Farmers Merchants Bancorp is a regional bank founded in 1897 and based in Archbold Ohio. This OTCBB listed bank stock provides various financial services to individual and small businesses in northwest Ohio and northeast Indiana. It has 19 offices located in the Fulton, Williams, Henry, Defiance, Lucas, and Wood counties in Ohio; and 3 offices in DeKalb and Steuben counties in Indiana.

This conservative stock has slowly moved higher but is worth a look. Recognize that it’s trading close to 3 year highs for price and price to sales. It still trades a nice discount to book value. Current dividend yield is 3.80%.

FMAO: Price on 04/22/13 = $22.25 up from the previous day close of $21.55

Market Cap:103.53M; Enterprise Value:124.93M

Trailing P/E:10.68

Price/Sales: 2.78 ; Price/Book:0.94 ; Enterprise Value/Revenue:3.35

Qtrly Revenue Growth:2.20% ; 52-Week Change:3.97%

The Bank owns all of its office locations, with the exception of Angola, Indiana. They own a total of 17 properties all on the books below fair market value. Above industry averages for ROA, Net Margins, ROE, Debt to Equity

TWOC: Trans World Corporation (OTC Listed Value)

noreply@blogger.com (ShadowStock) — Mon, 22 Apr 2013 23:56:00 +0000

Updated comment from prior post : "Random Margin of Safety Value Driven Ideas"

Industry: Resort and Casino

TWOC develops, acquires and manages casino operations in Europe. The company owns and operates three fully-owned casinos in the Czech Republic . “Its casino portfolio includes the Ceska casino consisting of 15 gaming tables and 80 slot machines in Ceska Kubice; the Route 55 casino comprising 23 gaming tables, including 12 card tables, 10 roulette tables, and 1 slingshot multi-win roulette table, as well as 124 video slot machines in Dolni Dvoriste; and the Route 59 casino with 23 gaming tables consisting of 12 card tables, 10 roulette tables, and 1 slingshot multi-win roulette table, as well as 118 video slot machines in Hate. The company also owns and operates the Hotel Savannah, a 77-room, 4-star deluxe hotel; and a full-service spa. Trans World Corporation was founded in 1993 and is headquartered in New York, New York.”

Pros: Strong pattern of insider buying by micro cap value guru Lloyd Miller and Wynnefield Partners Small Cap Value. YTD 2013 Lloyd Miller purchased 388,306 shares for a total of $917,838 or 2.36 per share. He also acquired 88,334 shares that were recorded at 0 per share bringing his average cost per share price down to $1.95 and total share activity to 471,640. Wynnefield Partners purchased 271,821 shares for 666,144. The average price paid was $2.45 during 2013.

They own real estate (casinos,land,hotel) properties in the Czech Republic. Online reviews are positive for the 4 star Hotel Savannah. Czech Republic continues to excel economically.

The stock trades at or near its historical low valuation. Also, it trades at a large discount to Resort and Casino industry peers.

Market Cap = 22.95M , Enterprise Value: 17.08M

Enterprise Value/EBITDA: 2.98 , Price/Book : 0.50 , Enterprise Value/Revenue: 0.47

52-Week Change:-25.32% , Book Value per share = 4.66

TWOC Price on 04/22/13 = $2.60 up from the previous day close of $2.33

Aggressive debt reduction, modest share buybacks, deep discount to book value, successful value institutions as large shareholders help make this mean reversion deep value candidate an interesting tiny (risky) potential opportunity.

Margin of Safety Value Driven Ideas

noreply@blogger.com (ShadowStock) — Mon, 22 Apr 2013 18:12:00 +0000

slowly updating details on the potential ideas below.

The ideas were selected based on multiple value attributes. The categories for consideration were

Insider buying; share buybacks; debt reduction ; deep value discount to industry peers; large price underperformance; real estate; dividends; consistent above average earnings; valuation discount based on enterprise value to EBIT, EBITDA,GP, and tangible assets ; growing book value and sales;, improving GM%

TWOC (see post above "TWOC: Trans World Corporation (OTC Listed Value)"

MFLX value has been enhanced with a -45% price change over 52 weeks near 3 year low. It now trades at historical low valuation based on P/B. P/B is .79 near 10 year low of .80 versus 6 year average of 1.30, P/S .40 versus 5 year average of .70. and close to 3 year low of .40. Margins have been on the decline but margins mean revert in this industry

Strong financial position and outsized industry under performance makes MFLX a micro cap value stock that is likely to mean revert. The most recently reported quarter 12/31/12 revenue increased by 21% to 289.7M.

MFLX Price on 04/22/13 = $14.02

Market Cap:357.87M ; Enterprise Value:256.44M

Price/Sales 0.40; Price/Book:0.77

Enterprise Value/Revenue:0.30 ; Enterprise Value/EBITDA:3.17

Qtrly Revenue Growth:21.00% ; Total Cash Per Share:3.90

52-Week Change:-44.73% ; Held by Insiders: 63.22%

SYNC

Price on 04/22/13 = $2.86

FMAO: FMAO - Farmers & Merchants Bancorp is a regional bank founded in 1897 and based in Archbold Ohio. This OTCBB listed bank stock provides various financial services to individual and small businesses in northwest Ohio and northeast Indiana. It has 19 offices located in the Fulton, Williams, Henry, Defiance, Lucas, and Wood counties in Ohio; and 3 offices in DeKalb and Steuben counties in Indiana.

FMAO: Price on 04/22/13 = $22.25 up from the previous day close of $21.55

Market Cap:103.53M; Enterprise Value:124.93M

Trailing P/E:10.68

Price/Sales: 2.78 ; Price/Book:0.94 ; Enterprise Value/Revenue:3.35

Qtrly Revenue Growth:2.20% ; 52-Week Change:3.97%

HSON:Price on 04/22/13 = $3.35

OIIM:Price on 04/22/13 = $3.17

INTX :Price on 04/22/13 = $8.89

ELSE:Price on 04/22/13 = $4.38

Click for quotes on the potential ideas above

Ugly Stock Returns with Deep Value Attributes

noreply@blogger.com (ShadowStock) — Tue, 16 Apr 2013 05:55:00 +0000

Click to View Quotes on all 6 Stocks: TAST GMAN COCO ABFS SPPI AGX

TAST: Carrols Restaurant Group (Price on 04/15/13 = $4.74)

Carrols Restaurant Group, Inc. is the largest Burger King franchisee in the world and have operated Burger King restaurants since 1976. As of December 30, 2012 , they operated 572 Burger King restaurants in 13 states. On May 30, 2012, they acquired 278 restaurants from BKC.

Carrols saw third quarter sales increase 87% to $169.5 million, thanks in large part to the acquisition of 278 additional Burger King restaurants. Carrol’s is a key beneficiary of Burger King’s goal to be 100% franchised. BK’s emphasis on coffee sales should also help increase the average meal cost. Carrols/BK’s coffee offering/emphasis of Seattle’s Best , a 2003 Starbuck’s acquisition, should help margins as they push coffee sales.

GMAN: Gordmans Stores (Price on 04/15/13 = $11.25)

Gordmans Stores, Inc. is an everyday value price department store retailer. As of March 25, 2013, the company operated 86 stores in 18 states. Gordmans Stores, Inc. was founded in 1915 and is headquartered in Omaha, Nebraska.

GMAN has a solid balance sheet with virtually no debt. It trades at a strong valuation discount to its industry peers but posted a -48.08% 52 week stock return.

COCO: Corinthian Colleges Inc (Price on 04/15/13 = $1.92)

Corinthian Colleges, offer short-term diploma programs and associate, bachelor's, and master's degrees. Their main program areas include health care, criminal justice, business, information technology, transportation technology and maintenance, and construction trades. In addition, they offer online degree for business, accounting, criminal justice, paralegal and information technology. As of June 30, 2012, they had approximately 91,000 students and 15,200 employees, including 5,900 faculty of which 4,170 are part-time and 1,730 are full-time.

Note the large short position at 30% of float. So caution is warranted.The stock is a mean reversion candidate with a -47.58% stock return for the prior 52 week period. The entire for profit education sector is under pressure from litigation and future government funding.

Education & Training Services

ABFS: Arkansas Best Corporation (Price on 04/15/13 = $10.14)

Arkansas Best Corporation provides freight transportation services and solutions. As of December 31, 2012, the company operated approximately 3,700 tractors and 20,000 trailers that were used in its line haul and local pickup and delivery operations. Arkansas Best Corporation was founded in 1935 and is headquartered in Fort Smith, Arkansas.

ABFS is trading at a discount to its historical valuation. Valuation also trades favorable to industry peers posting one of the worst 52 week stock returns.

Trucking Industry comparisons

SPPI: Spectrum Pharmaceuticals (Price on 04/15/13 = $7.01)

Spectrum Pharmaceuticals, Inc., a biotechnology company, engages in acquiring, developing, and commercializing prescription drug products primarily in the areas of hematology and oncology.

The company was formerly known as NeoTherapeutics, Inc. and changed its name to Spectrum Pharmaceuticals, Inc. in December 2002. Spectrum Pharmaceuticals, Inc. was founded in 1987 and is based in Henderson, Nevada.

AGX: Argan Inc (Price on 04/15/13 = $14.55)

Argan, Inc., provides development, consulting, engineering, procurement, construction, commissioning, operations, and maintenance services to the power generation and renewable energy markets for public utilities, independent power project owners, municipalities, public institutions, and private industry.

Argan, Inc. was founded in 1961 and is headquartered in Rockville, Maryland.

Insider Buys Reported Today

noreply@blogger.com (ShadowStock) — Fri, 12 Apr 2013 05:09:00 +0000

DRAD Prior Mention

TWOC Prior Mention

DGTC Prior Mention

Click to View Quotes on Stocks

Micro Cap Value Watch

noreply@blogger.com (ShadowStock) — Mon, 08 Apr 2013 16:46:00 +0000

All 3 stocks had gross margin improvements and aggressive share count reduction for the 2009 to current period.

MASC: “Material Sciences Corporation design, manufacture and markets material-based solutions for acoustical and coated applications. “

EXPO: “ Exponent, Inc. is a science and engineering consulting firm that provides solutions to complex problems. The Company’s services include analysis of products, people, property, processes and finances related to litigation, product recall, regulatory compliance, research, development and design. It operates in two segments. “

KAI: “Kadant Inc. is a supplier of equipment used in the global papermaking and paper recycling industries and a manufacturer of granules made from papermaking byproducts.”

Click for quoteson all 3 stocks

Nano Caps selling at a Discount to their Intrinsic Value

noreply@blogger.com (ShadowStock) — Fri, 05 Apr 2013 15:52:00 +0000

March 21 GLUX was mentioned on Nano Cap Value .. Bold Buybacks AtAdvantageous Prices

GLUX: Great Lakes Aviation founded in 1979 is an independent US regional airline company. In addition the company provides charter air services to private individuals, corporations, and athletic teams. As of March 20, 2013, it served 46 airports in 13 states with a fleet of 6 Embraer EMB-120 Brasilias and 28 Raytheon/Beech 1900D regional airliners.

The stock trades significantly below its intrinsic value using an average growing annual per share EBITA from 2008 to the TTM of .35. 2011 annual EBITDA per share was .71 and .58 for the TTM. Book value per share has also been steadily increasing. The current EV to EBITDA is only 2.44

Price = $1.36, Market Cap = 12.20M, EV = 37.20

EV/EBITDA = 2.44, EV/Revenue = .27

YOY Revenue Growth = 7.50%

BV = 4.48, 52 Week Price Change = 4.62%

The stock also trades at a historical cheap value based on sales and book value.

Diluted weighted average share count was reduced by 5.53 million or 38.26% from a period ending balance of 14.45M on 12/31/2010 to the most recently reported balance of 8.92M 09/30/2012.

9/30/2011 (14.38M) to 12/31/2011 (11.91M) average diluted share count was reduced by 2.47M with an average share price of .71 per share.
12/31/2011 diluted share count was 11.91M reduced to 9.03 on 3/31/2012 or 2.88M over the quarterly period with an average per share price of .90.

I purchased a few shares of GLUX as part of a larger portfolio. It will take time and selling may be difficult given the illiquidity.

Additional illiquid nano cap stocks trading below their intrinsic value based on earnings and assets; IBAL, MNDO,IEHC,ITEX,EVI to name a few.

Staffing & Outsourcing Industry .. Value Opportunities

noreply@blogger.com (ShadowStock) — Fri, 29 Mar 2013 19:33:00 +0000

I looked at 28 Staffing & outsourcing service companies. This is some of what I uncovered.

CTP: CTPartners Executive Search Inc

Current price = $3.77

Positives: CTP is just 14% off its 52 week low of 3.32 and 82% off 52 week high 6.93. The 52 price change was negative -38.51%. Strong balance sheet with an EV/MC ratio of .67, cash per share of 2.28 and EV/(NTA – Cash) of .30

Over the TTM, share count was reduced. 5.05% was the YOY share count reduction. Industry’s cheapest valuation using EV/GP at .15, EV/Revenue = .14, one year price change was negative.. = -38.51%, aggressive share count reduction over the most recently reported quarter ending September 2012, both debt and share repurchases over the TTM per cash flow statement.

Enterprise value is 17.75M with 120.71M GP for the TTM.

Market Cap:26.32M , Enterprise Value :17.75M

Price/Book:1.28

Enterprise Value/Revenue:0.13

Enterprise Value/EBITDA:6.95

Qtrly Revenue Growth: 15.60%

Gross Profit:120.71M, EBITDA:2.56M

Total Cash :15.95M

Shares Outstanding:6.98M ,Float: 4.52M

% Held by Insiders:35.30%, % Held by Institutions: 31.00%

Click to view valuation metrics on other companies in the staffing industry

Nano Cap Value .. Bold Buybacks At Advantageous Prices

noreply@blogger.com (ShadowStock) — Fri, 22 Mar 2013 03:42:00 +0000

Click for Quotes on Stocks below

Great Lakes Aviation, Ltd. (GLUX):

Price = $1.55, Market Cap = 13.83M, EV = 34.31

EV/EBITDA = 1.96, EV/Revenue = .25

YOY Revenue Growth = 13.90%

BV = 4.48, 52 Week Price Change = 35.96%

Diluted weighted average share count was reduced by 5.53 million or 38.26% from a period ending balance of 14.45M on 12/31/2010 to the most recently reported balance of 8.92M 09/30/2012.

Command Security Corp. (MOC):

Price = $1.85, Market Cap = 16.63M, EV = 23.72

EV/EBITDA = 9.34, EV/Revenue = .16

YOY Revenue Growth = 8.80%

BV = 1.92, 52 Week Price Change = 32.14%

YOY diluted share count reduction was 12.33%. 15.64% from the 2008 yearend balance

Overlooked Value with Cannibals

noreply@blogger.com (ShadowStock) — Fri, 15 Mar 2013 05:39:00 +0000

Charlie Munger advised investors to pay close attention to cannibal companies. Cannibal companies are buying back huge amounts of their stock. This has always been on my list of items to review. The reasons are obvious. These companies are shareholder friendly, create value when the stock is below intrinsic value, reduce share count that will improve all ratios and reduce the supply of stock, just to name a few.

Tonight I will quickly start a list of value based ideas that are aggressively reducing their share count. I keep putting off these posts. Tomorrow I will post supporting details. But I still want to introduce some of the most ruthless cannibals.

(ITEX): ITEX Corp is deep value idea engaged in the business of battering. For over 30 years ITEX has created a distribution channel for business to exchange services or goods with battering to preserve cash flow. Members utilize digital currency (ITEX dollars) to exchange goods and services rather than use cash.

The reported share count last year January 2012 was 3,636,000. The tender offer to purchase their stock for 4.20 per share along with share buybacks quickly and aggressively reduced the share count to 2,616,000. 28% of the share count was reduced!Then on February 26,2013 the board approved a 25% increase in the company’s quarterly dividend to a new quarterly dividend of .05 per share! If we apply that to the current price the dividend yield based on today’s closing price would be 5.41%!

Results were reported Thursday March 14.

Income from Operations increased 76% to $499,000 compared to $283,000
Earnings per share increased 17% to $0.14 compared to $0.12
Revenue decreased 6% to $3,960,000 compared to $4,229,000
SG&A expenses decreased 34% to $368,000 compared to $558,000
Cash increased 27% to $2,461,000 compared to $1,942,000 at fiscal year-end July 31
Paid a $0.04 per share cash dividend.

Thanks to the years of hard work by activist David Polonitza ITEX is moving in the right direction. Management, insiders, employees and shareholders are beginning to see the benefits of his work. I believe they are now positioned to focus on operations and the future of the company as all stakeholders should benefit.

ITEX reported quarterly operating income before depreciation of 360M,464M, 398M,564M or 1,786,000 for the TTM/ .6829 per share based recent reported share count of 2,615,000. Current EV per share is 3.50. The stock is now trading at just over 5 times operating income less depreciation.

Market Cap: 9.68M, Enterprise Value: 7.39M

Price/Sales: 0.62, Price/Book: 0.87

ITEX was listed January 16 in the post "illiquid stocks for outsized returns?"

(JAKK) JAKKS Pacific... “JAKKS Pacific, Inc. designs, produces, and sells toys and consumer products in the United States and internationally. It provides traditional toys and electronics products.”

Market Cap: 245.98M, Enterprise Value: 214.17M

Price/Sales: 0.36, Price/Book: 1.16

Enterprise Value/Revenue: 0.32, Enterprise Value/EBITDA: 13.57

52 Week Stock Return was negative, - 33. %

Aggressive share count reduction as the stock trades near or at historical lows based on sales and book to price.

Share count was 27.64M at the end of 2008. This was reduced by an impressive 21% to the current balance of 22.00M.

Note as the price dropped over the TTM from a 52 week high of 19.39 to yesterday’s opening price of 10.82, management aggressively cannibalized their own company . Share count was reduced by 15% from the prior year count of 25.94M to 22.00M.

(KSS) KSS: Kohl's

Kohls operates department stores in the USA. They have 1,146 store in 49 state along with the option to shopt in their online store. The company was founded in 1962.

KSS currently trades at attractive historical valuation based on P/B or P/S. They not only trade near their historical low on valuation but most optimistic valuation for their department store industry.

EV/EBIT is 9.68 and lowest in their industry. YOY the revenue increased by 5.5%. Enterprise / NTA less cash is at 1.35. KSS is near 52 week low and unjustly underperforming their industry peers based on the 52 week stock return excluding SHLD and JCP.

Management has wisely purchased back their stock at these cheap valuations.

October 2011 the shares outstanding were 264,000,000. February 2013 this balance was reduced by 8.5% to 241,500,000. The 2010 share count yearend balance of 305,000,000 was reduced by 15.50% to the current 241,500,000 share count.

Current dividend yield for this institutionally disliked mid cap value is 2.90%. Shorts as a percentage of the float is 7.90%.

Market Cap:11.20B, Enterprise Value:15.21B

Price/Sales:0.58 ,Price/Book:1.84
Enterprise Value/Revenue:0.79
Enterprise Value/EBITDA:5.59

Click for all 3 stock quotes

"Since when are you looking at such big cap names!? ;)"

noreply@blogger.com (ShadowStock) — Tue, 05 Mar 2013 04:59:00 +0000

This was tweeted last night in a light hearted manner by the super value blogger/investor and resident Sherlock Holmes, Jeff Moore. This PI :) has been doing deep investigative work on small value stocks and runs a must visit investing blog “Ragnar Is a Pirate”.

When Jeff is not muckraking causing severe distress for some small dishonest companies, he may be mistaken for Bob Villa (America’s Handyman) as he works to earn the title hammering one nail at a time , Donald Trump of the Midwest. Jeff sorry about my disturbing reference to "Mr. Trump" not sure where that came from :) . What is more disturbing I just called “the Don”, Mr Trump. Full disclosure, I watched parts of the celebrity apprentice last night. okay I know

Back to yesterday's post, regardless of their size these companies still may deserve a review for most value investors. Hey in my defense the blog does headline … Exploiting Market Anomalies with Data That Has Been Overlooked Underappreciated Or Ignored. : "There Are No Bad Assets Just Bad Prices". :)

CACI: CACI International Inc. (CACI)

CACI was founded in 1962 with 15,500 employees in over 120 offices worldwide. CACI provides information solutions and services in support of national security missions and government transformation for Intelligence, Defense, and Federal Civilian clients.

The short term risk or potential future depressed margins may be impacted by reliance on government contracts.

There are a few key reasons to consider this boring stock. CACI has a highly predictable business with a historical free cash flow that justifies a higher price using a DCF model. YOY revenue growth was 24.90%,12.90%,15.35%,13.61% and -4.28 for the annual periods of 2008 to the current TTM respectively. Management has smartly recognized the company’s intrinsic value and has been aggressively buying back its own shares. The diluted weighted average share count as of year end 2008 was 30.61M. This balance was reduced by 23.10% or 7.01M to the most recent share count of 23.54M. FCF as a percentage of sales has been consistent with average annual FCF margin yield of 6.5% since 2007.ROE sits at 13.50% and ROIC at 9%.

CACI trades at 51.10 off the 52 week low of 41.29. The 52 week return was -14.31% with a 52 week stock price high of 63.31.The stock may be boring but what is not to like with this shareholder friendly stock with a highly predictable and high FCF margins that has been used to aggressively buy back their own stock. Just over the prior 5 quarters the outstanding share count was reduced by 18.10%!

Market Cap:1.18B, Enterprise Value:1.84B

Price/Book:1.04, Enterprise Value/Revenue:0.49

Enterprise Value/EBITDA:5.47 ,Book Value Per Share:49.06

Shares Outstanding23.01M , Float:20.61M

Shares Short:3.54M

Short % of Float:15.70% (The short term risk or potential future depressed margins may be impacted by over reliance on government contracts. The high short as a % of float may explain this market sentiment.)

hhgregg, Inc. (HGG): The stock was downgraded today to underperform by Zacks, shorts as a percentage of the float is 34.20% and they compete in the ultra competitive retail space of Brick-and-Mortars electronic stores. Oh and insider selling over the past year. But at least for today it continue to defy all odds and was up 7.13%. This move was similar to DECK that popped 15% Friday and up slightly today. Both have large amount of shares short but are aggressively buying back company stock.

HGG is part of the small group of companies that aggressively reduce their share count. They posted 20% ROE and 18% ROIC over the past 4 years indicating a financial well managed company.

Market Cap:340.99M, Enterprise Value:302.78M

Price/Sales:0.13, Price/Book:0.90

Enterprise Value/Revenue:0.12 , Enterprise Value/EBITDA:3.36

Shares Outstanding:33.36M ,Float:13.84M

% Held by Insiders:60.18%

I’m all blogged out for tonight. But investors may want to check out some stock in the education and services sector that took a hit today. DY,STRA, CECO

Career Education Corp. (CECO) caught my attention today with the 9.33% drop. The entire industry was hit hard today. CECO closed the day at $2.72 per share or 180.06M market cap. They have 304.44M in cash or 4.60 per in cash.

I will try and continue tomorrow with some other ideas listed yesterday.

Potential Value Ideas Under Review

noreply@blogger.com (ShadowStock) — Mon, 04 Mar 2013 06:06:00 +0000

Value based ideas that I’m reviewing for near term moves higher based on oversold conditions , aggressive share count reduction ,positive 2012 or 2013 insider activity purchased at or near the current price coupled with multiple deep value attibutes. Some these ideas meet all or some of those attributes.

These are some of the ideas I'm reviewing.

CACI, QNST,HGG, DV,WU,STRA,DECK( missed posting DECK last week. The stock moved 15% Friday 03/01/13 so I need to review again after this large price jump.)

I may add or remove names after the post is updated hopefully tomorrow.

Click for quotes on the ideas above that may change before the final update.

The large short position, declining and negative sales comparisons, compressing margins, negative industry trends along with multiple other traditional areas to review was obvious. But at the right price along with a margin of safety from the balance sheet and aggressive share buybacks these kinds of ideas can still outperform. As a group all 7 averaged over 7% from the post date for the week and half period. just a thought as I post the table below.

Oversold: Value Based & Real Estate Rich

noreply@blogger.com (ShadowStock) — Wed, 27 Feb 2013 03:25:00 +0000

Fred's, Inc. (FRED): General Merchandise Retail

“Freds, Inc., together with its subsidiaries, engages in the sale of general merchandise through retail discount stores and full service pharmacies in the southeastern United States. It offers pharmaceuticals, household goods, food and tobacco, paper and cleaning supplies, health and beauty aids, apparel and linens, disposable diapers, pet foods, paper products, and various food and beverage products primarily to low, middle, and fixed income families in small- to medium- sized towns. The company also sells general merchandise to franchised Fred's stores. As of January 28, 2012, it operated 679 company-owned discount general merchandise stores, including 41 express stores; and 325 pharmacies, as well as 21 franchised Fred's stores. The company was founded in 1947 and is headquartered in Memphis, Tennessee.”

Fred continues to under perform their industry peers, discount merchandise. Fred’s stock returned -.78 versus 22.32% for the industry. P/S, P/B and P/CF are all below their industry valuations.

Outstanding share count has been significantly reduced from a 2008 balance of 39,771,000 to the most recent count of 36,682,750. Gross margins have steadily climbed from 2008 at 27.53% to the most recent reported balance of 28.94%. Book value per share also steadily moves higher from a 2008 9.23 per share balance to today’s 11.80 per share.The Company owns the real estate and the buildings for 88 locations , distribution center and corporate headquarters situated on approximately 60 acres in Memphis, Tennessee.

Market Cap: 495.37M , Enterprise Value:475.34M

Price/Book: 1.12, Enterprise Value/Revenue: 0.25

Enterprise Value/EBITDA: 5.70, Short % of Float: 11.70%

Stock opened up at 13.28 and closed the day at 13.50

Nano Cap Value Driven by Improved Capital Structure

noreply@blogger.com (ShadowStock) — Wed, 20 Feb 2013 05:50:00 +0000

For this post I was looking at multiple factors to find some deep value. One angle was the aggressiveness of share count reduction especially over the past 5 quarters for tiny companies. But if there was meaningful insider selling it was excluded. Also stocks that performed poorly over the past 6 or 3 months were given extra attention to exploit mean reversion coupled with hidden shareholder value improvements. But metrics like EV to sales, book value and a sound balance sheet were also required before additional work. Okay this will be my quick bullet point introduction. Other ideas exist but I can’t put out tonight.

ISIG: Insignia Systems Inc. listed on the OTCBB

“Insignia Systems, Inc. markets, sells and supports in-store advertising and promotional products, programs and services designed to provide retailers and consumer goods manufacturers with highly effective in-store programs and point-of-purchase display materials.”

ISIG was able to dramatically reduced payroll costs to reach profitability.

Current share count is 13,602,000 versus prior year at 15,121,000 . This was an impressive aggressive 10.01% share count reduction.

Outstanding balance sheet
Quick Ratio = 4.99

Double digit YOY sales improvement
Historical low valuations

Current Price = 1.93
Cash per share = 1.45, Book value = 1.94

The current quarter was profitable as managment promised versus losses for multiple previous quarterly results.

Market Cap :26.25M,Enterprise Value:7.29M

52 week return was -13%

The current market price may be approaching less than liquidation value

Needs more wor

DAIO: Data I/O Corp. (DAIO)

Data I/O Corporation founded in 1969 creates programming solutions for semiconductor devices.

DAIO has a history of treating shareholders fairly.

2008 diluted shares outstanding were 9,053,000. It now stands at 7,870,000.

Two actions I found particularly interesting was aggressive positive insider activity and share buybacks during 2012. Note that insider purchases were at significantly higher prices from today’s close of 1.59. Some open market purchases were at 2.79.

To put the share buybacks in context recognize the average share price was 5.30 from 06/30/11 to 12/30/10.Then for the one quarterly period ending 06/30/12 they reduced the share count by 11.86%. The average share price during this 3 month period was 2.92. The immediate quarterly period before ending 03/31/12 share count was reduced by 5.80% when the average price during this 3 month period was 3.47.

No long term debt.

Market Cap:13.61M,Enterprise Value : 2.50M

Price/Book :0.75, Enterprise Value/Revenue :0.13

Cash per share = 1.42 or 11.92M in cash

Qtrly Revenue Growth (yoy): -38.90%

Slow down in sales was due to over capacity but in time that should be fixed. Management changes and a history of responsibly managed could help this deep value idea. Super Nano Cap Value investor Lloyd Miller holds a position.

PTSI: P.A.M. Transportation Services, Inc

“P.A.M. Transportation Services, Inc., through its subsidiaries, operates as a truckload transportation and logistics company in the United States, Canada, and Mexico. The company engages in transporting general commodities. Its freight primarily consists of automotive parts, expedited goods, and consumer goods, including general retail store merchandise, as well as manufactured goods, such as heating and air conditioning units. The company also provides brokerage and logistics services, which include transportation scheduling, routing, mode selection, transloading, and other value added services related to the transportation of freight. As of December 31, 2011, it operated a fleet of 1,770 trucks, including 79 owner-operator trucks; and 4,696 trailers comprising 53 leased trailers. “

Ending June 2011 share count was 9,102 that was reduced to the current balance of 8,703. The aggressive current share buybacks coupled with recent additional above average capital expenditures could indicate operating improvements.

Current price is 10.28 with a per share book value of 15.11

YOY revenue growth of 7%
52 week price return was -12.14%

Market Cap:89.45M, Enterprise Value:155.00M

Price/Sales:0.23, Price/Book:0.67,Enterprise Value/Revenue:0.41
Enterprise Value/EBITDA:3.84

Click to get quotes all 3 stocks above

Recent Increase in Capital Expenditures as a Positive

noreply@blogger.com (ShadowStock) — Wed, 06 Feb 2013 19:42:00 +0000

I went on a search for small value based companies with an improving capital structures coupled with a depressed stock return versus their industry peers along with an above average recent amount spent on capital expenditures .

The thought was those recent (TTM) above average capital expenditures could be an indication of management’s confidence of improved business activity. These ideas look interesting

Zoltek Companies Inc. (ZOLT)

Industry = Industrial Electrical Equipment

Market Cap: 299.02M , Enterprise Value:123.41M

Price/Book:1.06 , Enterprise Value/Revenue: 0.69, Enterprise Value/EBITDA: 5.16

52 week return = -45%

Slight share count reduction from 2008 year end balance

Capital expenditures were 21.6M for 2012 versus 2011 8.01M and 2010 4.06

Market Cap: 258.04M,Enterprise Value: 247.24M

Price/Book : 0.79 , Enterprise Value/Revenue: 1.41, Enterprise Value/EBITDA : 6.31

Historically cheap based on P/S and P/B

GM% has improved to 24.5% from 11.70%, 10.30% and 22.1% for the years ending 2011, 2010 and 2009 respectively.

Strong insider purchases for 2012

negatives:

Change in Revenue YOY was -23.70%
Shares as a percentage of the float = 21%
but trading as it trades near the 52 week low it could be a short squeeze candidate or just stronger that expected short term demand for the stock

Two other possible ideas

Oplink Communications, Inc. (OPLK)
Industry = Semiconductors
52 week return = -16%

Strong historical gross margins at 33%, steadily increasing book value over years, share count reduction from a 2008 year end balance of 20.589M to the current 19.145M. modest YOY revenue growth at 3% after 43% in 2011. 52 week price stock return of -16%, cash per share of 8.71 and a quick ratio of 8.91
The stock is held by value institutions like Royce, Kennedy Capital,Robeco

P.A.M. Transportation Services, Inc. (PTSI)

Industry = Trucking
52 week return = -10.04%

Market Cap: 84.23M, Enterprise Value : 151.08M

Price/Book: 0.64 , Enterprise Value/Revenue: 0.40, Enterprise Value/EBITDA 3.74

Share count reduction from 2008 balance of 9.683M to current 8.724M

YOY revenue growth of 6.30%

Click for quoteson the 3 stock above