Monday, October 29, 2012

Hopefully, It Deswell!

The following is a guest post written by Phil Kazmaier, who has written for this site before:

Deswell Industries (DSWL) owns and operates a factory overseas specializing in production of plastic molded components (such as the casing your remote control) and precision electronics (like the sweet surround sound system your remote control operates).

The company recently suffered from the often fatal disease known as customer concentration as evidenced by the fact that in year ending March 2011 major customers (with >10% sales) accounted for 42% of total company sales. However I say "recently suffered" because during fiscal 2011 they went through invasive surgery to remove the disease, as their sales to major customers in year ending March 2012 fell to only 12%. (And all the small cap growth investors said "OUCH"). The question we must answer is, will the patient survive?

Fortunately for Deswell, they carry no debt and 44M in cash reserves and short-term investments against a market cap of......only 44M?

Wednesday, October 24, 2012

Artio Assets Offer Opportunity

Artio is a money-manager on a bad run. The company is still making money (the major costs in this industry are salaries, which can become variable when the need arises!), but assets under management (AUM) have fallen dramatically over the last several quarters. The stock price, however, has fallen even more. But at some point, the company's strong balance sheet must provide protection for the equity investor, even if AUM continues to fall. That time may be now!

Thursday, October 18, 2012

The Essential Drucker

Peter Drucker is often called the father of modern management. Many of the management books of today have borrowed from or elaborated on the ideas Drucker set forth in earlier decades. I recently had occasion to read The Essential Drucker, a compilation of many of the articles he has written spanning topics such as management and what a post-capitalistic society might look like.

Wednesday, October 17, 2012

Meade Out of Focus

What a turnaround at Meade, and not in a good way. When Meade was brought up on this site as a potential value investment just over a year ago, its net cash position matched its market cap while its cash flow was positive. Since then, its market cap has fallen, while its cash position has fallen even more. As of its latest report a few days ago, Meade's cash position is now just $670K, down from $5 million 1.5 years ago, putting this company's future in doubt.

Tuesday, October 16, 2012

New Frontier Media Finally Sells

New Frontier Media (NOOF) has been on the Stock Ideas page for more than two years now, but it's time has finally come. The company received a buyout offer (that its board is on board with) for $2.02/share.

Thursday, October 11, 2012

Net-Net For Sale?

A common criticism of investing in net-nets is the lack of catalysts. Sure these companies may be undervalued, some say, but how many years will it be before that value is unlocked? But occasionally, net-nets stay net-nets even after a catalyst is encountered. TAT Technologies provides such an example today.

Wednesday, October 10, 2012

Alco Goes Big On Buybacks

Today, ALCO Stores reported that it has purchased 12% of its shares in one fell swoop. If you haven't looked at this company already, you may wish to do so. This is a profitable net-net that traded at a 58% discount to its net current assets. Following this large repurchase, that discount now rises to 62% by my calculations!

Tuesday, October 9, 2012

Sycamore: Beware of Ex-Dividend Date

I received a question from a reader who must be interested in participating in Sycamore Networks' (SCMR) massive special dividend. When it comes to dividends and special dividends, investors are trained to look for the ex-dividend date (the demarcation date that determines which shareholders receive the dividends and which do not), which is two or three days before the record date. Not in this case!

Monday, October 8, 2012

Asta Receives Uplift

Just 15 months ago, shares of Asta Funding could be had for $6 and change. At that time, the stock was brought up on this site as a potential value investment. Since then, the shares are up some 50%, offering investors the opportunity to exit after a quick but monumental rise.

Friday, October 5, 2012

Karsan Value Funds: 2012 Q3 Results

Karsan Value Funds (KVF) is a value-oriented fund, as described here. Due to securities regulations, the fund is not open to the public at this time. Should that change in the future, there will be an announcement on this site.

Thursday, October 4, 2012

Acme Rises With The Tide

One of the oldest stocks on the Stock Ideas page is that of Acme United, a supplier of knives, medical kits and other items to retailers. As the market has risen over the last few months, many stocks have been lifted out of the doldrums. Acme United is the latest, and therefore now makes the move to the Value In Action page.

Wednesday, October 3, 2012

Inefficient Markets, Gangnam Style

Efficient Market sympathizers will have a hard time explaining this one. Shares of Korean firm DI have shot up 185% in the last three weeks. Was there any company news? Nope. But there is an identifiable reason for the run-up: DI's chairman is the father of a music artist's whose song has become a global hit. The company does not benefit from this, making the share price rise all the more perplexing.

Style: The Art of Writing Well

With the Value Investing Conference having wrapped up (see notes here), investors will be pouring over the ideas offered up by some of the premier thinkers in attendance. The ideas that appear to gain the most traction appear to come from those who know how to communicate well.

But most of us are poor communicators. Fortunately, better communication is something that can be learned, to some extent. I recently had the opportunity to read Style by F.L. Lucas, a book that teaches certain tricks and follies of the communication trade.

Monday, October 1, 2012

Paulson Is Quite Attractive!

In the title, I refer to the company, not the person. Shares of Paulson Capital (PLCC) trade for less than one-third of the company's net current assets, offering investors an opportunity to buy a Nasdaq-listed company for 30 cents on the liquid dollar.

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