Session of 02/09/2007

[David Randolph]

I bought ZONS and JACO pre-market after their earnings reports.

Unfortunately you were not so lucky on JACO kslifka, as the stock is trading below the opening price. Still up 17% on the day, so this looks like a dangerous situation.

Volume is extremely high for this stock that traded just 3,500 shares yesterday, and today more than 1,000,000 shares are changing hands.

Fundamentally:

- Market cap is $25.3 M. Engaged in the distribution of electronic components, including semiconductors, capacitors, resistors, electromechanical devices, flat panel displays and monitors, and power supplies, which are used in the manufacture and assembly of electronic products.
- Balance sheet is weak with zero cash balance and a current ratio of just 1.07.
- Revenues are big but margins are very slim as this company is the middleman, a distributor, which gets squeezed on its margins on both sides. It reminds me of IFON's case.

Let's check today's news:

• Jaco Electronics Reports Fiscal 2007 Second Quarter Results, Its Fourth Consecutive Profitable Quarter
Business Wire (Fri 6:37am)

EPS in the 4th quarter was 2 cents. Multiply this by four and get a full year EPS of $0.08 and that puts the earnings multiple at 50.

I would get out of this stock right away, don't like companies with such low gross and net profit margins.

Good luck

[David Randolph]

MIKR
Mk Cap: $71k mill
BRIEF: For the nine months ended 31 July 2006, Mikron infrared, Inc.'s revenues rose 20% to $26.5M. Net income rose 61% to $2.6M. Revenues reflect favourable product mix and higher sales volume. Net income also reflects higher operating margins and a decrease in interest expense due to reduction of debt. MIKR is engaged in designing & manufacturing non-contact temperature measurement devices and high-sensitivity infrared thermal imaging devices

Up 15%

MIKR is being acquired at $11.5 a share, that's why it is standing still between $11.2 and $11.3:

• Mikron Infrared to Be Acquired by LumaSense Technologies for $11.50 Cash Per Share
Business Wire (Fri 8:35am)

It looks like it was cheap after the recent huge correction

[mbaugh]

Looks like GOAM is trying to break out!

[nica33]

JADE on fire 

[dnickers]

Hi David - Would you check out BULK?  Thanks!

[lancefur]

I bought ZONS and JACO pre-market after their earnings reports.

You already have a nice profit at ZONS kslifka, congrats

I hope my analysis reinforces your bullishness on those stocks.

Technically I like ZONS chart, it reminds me of SYX when it was down there around $14, doesn't it? Anyway, the stock opened with a big gap up, the news really needs to be "news" for it to keep on pushing higher. We'll get to that in a moment.

Fundamentally:

- Market cap is $132 M. A single-source direct marketing reseller of name-brand information technology products to the small- to medium-sized business market, large and public sector accounts.
- The current ratio is just 1.6, so the balance sheet is a bit weak, but "big", if you know what I mean.
- Revenue trends are positive and 2006 revenues were $575 M. This looks like a huge number for a $132 M market cap company ...
- Fully diluted EPS for 2006 was $0.66. That puts the trailing earnings multiple at 15.2. The industry average is 14.

But the industry average sales multiple is 0.62, and ZONS is trading at just 0.23 times revenues. I say the stock is undervalued, the chart looks bullish, I'm positive on ZONS.

Good luck

Wow. If you are comparing this to SYX back in the day, then this should be a good point to buy in. Despite the big run up today, in your opinion David, would this still work to buy in now? I know you like to buy when you buy and sell when you sell and not time the thing but I was just curious. Thanks for your time on this one.

[David Randolph]

please check DKAM David 

thanks in advance
Oliver

You're really looking after another FRPT, aren't you la-onda? By the way, great move on OPBL.OB today, I wish I knew why

DKAM.OB chart is bullish.

Fundamentally:

- Market cap is $197 M. The Company develops, produces, markets and distributes alcoholic and non- alcoholic beverages for sale in the continental United States.
- Balance sheet is very weak, working capital is negative by about $6.5 M
- Revenues are incipient for a $197 M company. Sold just $3.35 M over the last four quarters
- $1 M or more in losses every quarter

It doesn't matter how you put it, this stock is way, way overvalued. I see dilution going forward due to negative working capital. I think it will fall 60 or 70% from current levels, but been wrong before ...

[KCScott]

David,

GSS - new 52 week highs on Volume surge - up another 3% today

Bought yesterday at 3.60

Market cap is 700 million

[C.R.E.A.M.]

Hello David. I'm a first time poster who is inquiring about your thoughts on GRSR.pk.  It's weeks away from moving to the bulletin board and sells at the lowest P/S ratio in the solar industry. They're at 1 times sale when the industry average is 9-11. If valued at the low end at say 7 times, that would still make this .97 cent stock upwards of 7 dollars.

[BadOscar]

Looks like GOAM is trying to break out!

Glad I held off on that one. I just dumped it at 9.2 and got back what I lost on RDCM.

[esn]

Accuray (ARAY) went public yesterday. They make robotic radiosurgery equipment. If it follows  the pattern of ISRG (Intuitive Surgical) which made robotic surgery device, this could be a could stock to consider in the main portfoliol.

[David Randolph]

Wow. If you are comparing this to SYX back in the day, then this should be a good point to buy in. Despite the big run up today, in your opinion David, would this still work to buy in now? I know you like to buy when you buy and sell when you sell and not time the thing but I was just curious. Thanks for your time on this one.

I compared the chart, fundamentals aren't so attractive, but still attractive. I don't know if you remember lancefur, but I was losing 15% on SYX due to poor short term timing, because I bought right after a similar gap up as you see on ZONS.

Now I'm ahead by 90% on SYX, due to having strong hands for good stocks.

Good luck

[David Randolph]

Hello David. I'm a first time poster who is inquiring about your thoughts on GRSR.pk.  It's weeks away from moving to the bulletin board and sells at the lowest P/S ratio in the solar industry. They're at 1 times sale when the industry average is 9-11. If valued at the low end at say 7 times, that would still make this .97 cent stock upwards of 7 dollars.

Thanks for your first post C.R.E.A.M., but I don't study Pink Sheet traded stocks due to lack of technical and fundamental information. Please read the 3 SOF Portfolio FAQ

But keep up posting

[kslifka]

Wow. If you are comparing this to SYX back in the day, then this should be a good point to buy in. Despite the big run up today, in your opinion David, would this still work to buy in now? I know you like to buy when you buy and sell when you sell and not time the thing but I was just curious. Thanks for your time on this one.

I compared the chart, fundamentals aren't so attractive, but still attractive. I don't know if you remember lancefur, but I was losing 15% on SYX due to poor short term timing, because I bought right after a similar gap up as you see on ZONS.

Now I'm ahead by 90% on SYX, due to having strong hands for good stocks.

Good luck

Sorry I was away from my computer.  I sold ZONS for a nice little profit at 10.07...but with your positive fundamental analysis...I will keep  it on watch for a re-entry.

[David Randolph]

David,

GSS - new 52 week highs on Volume surge - up another 3% today

Bought yesterday at 3.60

Market cap is 700 million

Good luck for that bullish breakout attempt KCScott. You know that $700 M is too high, we're looking for stocks with less than $500 M market cap as you can read on the 3 SOF Portfolio FAQ

I'm not a fan of the gold group. For example, GSS EPS over the last four quarters was $0.13, which puts its trailing earnings multiple at roughly 30.

But good luck