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Monday, November 21, 2005

Revisiting Companies 3

revisiting companies 1
revisiting companies 2

BKBO: BakBone Software dropped for a while. I tried to buy some but the price went up more than I was willing to pay. It's now $1.74. Continue following.

LVWD: LiveWorld dropped after the bad announcement. I actually sold some stock in the mid 40's but I'm holding onto the rest. Continue holding.

BOJF: Bank of the James jumped up to $21 on Friday but on insanely low volume. They issued their 10-Q on Nov 9. Assets are up and they're pretty much fully leveraged now. They earned 29 cents diluted in Q3. Stop following.

BANI: FDIC #35462, Bay National climbed to $22.50 since I looked at it in June at around $18. Earnings for Q3 were 37 cents vs 22 cents in Q1 when I looked at it. Stop following.

SCCB: FDIC #57428 Seacoast Community Bank. I actually bought shares in this briefly. The stock dropped from around $11 or so to $10. You have to ask them for an annual report (which I got). Results for Q2 deteriorated even more than Q1 (they're losing money). Stop following.

BonusAmerica BAWC: filed an NT 10-Q for Q3, no real reason given, they were late last time. As indicated before, Q2 showed revenues down and an annualized 1.4 cents per share per year with an 8 cent stock price. Stock price is now 11 cents. Continue following.

Looking at other community banks, FDVA dropped in price, CPFB dropped for a while but then went up when they hit profitability. Stop following all community startup banks.

Bowlin Travel Centers (BWTL): Dropped to a $1.75 ask from $2.00 in Sept. No additional news. Continue following.

Brand Partners (BPTR): Lots of big red flags with these guys, but I've still been following them. I figured they really earned 20 cents in Q2. Q3 results are out. AR continues to climb, but inventories and pre-paid are down. Revenues are down from Q2. Net loss due to taxes. Even without taxes, earnings were close to zero. Cash flow is terrible. Stop following.

Bulldog Technologies (BLLD): They won an account with Pfizer and other stuff. And a Middle Eastern win, too. Looks like certain stockholders are selling up to 6.4 million shares from warrants and convertables. The Wall St Journal wrote an article on them. But they're way overdue to file a 10-Q on the quarter ending 8/31/05 and no NT was filed! The stock had dropped about 20% until the last few days. Now it's back to where it was. Continue following.

Burnham Holdings (BURCA): Q3 results AR and inventories are up. Revenues down slightly. Earned 63 cents in Q3 (vs 71 cents prior year) but only 2 cents for 9 months. Cash flow is terrible due to AR etc. They lost 21 cents in Q2 (vs 23 cent gain prior year) and they lost 40 cents in Q1. It was all due to reduced industry demand and raw material prices and energy prices. They announced price increases where needed (pricing power, great!). They pay a hefty dividend of about $1.20. The stock is at about $23.50. In normal times, they earn about $2.20 a share fairly consistently. Book value is around $20 a share at this point. Financial highlights. The stock is cheap but Continue following.

Butler National (BUKS): Stock dropped from around 50 cents to around 34 cents. In November they did their first installation of the RVSM upgrade that was planned for Learjet 35 and 36 planes. This was the one-time upgrade that will temporarily (2 years) improve results. They're traveling to PRC, which could be interesting. Q1 2006 results: Revenues down. Net income down (these guys have low margins). Follow this company only for big changes.

Experimental Agency (XAIN): Q3 results: High gross margins, low operating margins. Tiny net income. Cash flow is good. Stop following this company: crappy + illiquid.

Yi Wan Group (YIWA): website expired 28 cents on the ask (no chart available) down from 39 cents. They're due for next quarter's filing soon. No news or info. Continue following.

Schuff International (SHFK): The stock went up even more but is back to where it was when I re-checked it (up to $6 and change from $3.50 when I first looked at it). Q3 results: Restricted cash got unrestricted. AR is up a lot (equally contracts in progress and unbilled retentions), inventories are down some. They're selling some assets (a San Diego fab). Revenues are up 68%, mostly due to two Las Vegas projects. The Arizona Cardinals stadium project accounts for most of the rest. Also an Orlando resort added some. 18% gross margins are higher than last year, actual dollar amount doubled over last year. SG&A increased 32% due to bonus programs and a one-time cost of cancelling employee stock options. They earned 84 cents diluted in Q3 (vs 20 cents prior year). $1.69 earnings for 9 months (vs 33 cents prior year). Free cash flow is way higher in both years. Results are going to be lumpy, they say. Gross profits are actually negatively impacted by higher steel prices. It's difficult to do a valuation on this company. It's probably fairly cheap right now. But they were selling for about $1.20 in 2003. The time to buy a company like this is when all hell is breaking loose. Continue following and wait for a good price.

Solitron Devices (SODI): Stop following.

American Dairy (ADY) ...in China. This dropped as low as the mid $5 range, but is back to $6.87. Q3 results: Inventories doubled! More debt. Revenues are down from Q2, but way up over last year. They earned 14 cents per diluted share vs 21 cents last quarter and 9 cents in the prior year. In 9 months, they've earned 49 cents per diluted share. Cash flow is terrible due to receivables and inventories. They acquired another Chinese business and the subsidiary structure is fairly complicated. This needs more work.

Big Apple Bagels (BABB): Q3 results: Balance sheet looks a bit better. Revenues down. Operational costs are down slightly. Earned 2 cents a diluted share vs 4 cents in prior year (and 4 cents in prior quarter). Free cash flow matches earnings. Low depreciation. 4 of 151 franchised stores closed during the quarter. Dilution not a problem. A VP is retiring. They've been paying out excess cash in dividends very well. Stock is priced about right. Continue following.

China BAK Battery (CBBT): No chart, the ask is at $6.50. No news. Way too expensive. Continue following.

Triangle Multimedia (QBID): They have 19.5 billion shares outstanding and wondering why the stock price is so low. And if they want people to stop saying "gay" as a derogatory term, they might start acting at least slightly like a public company and not a gay male stereotype. They claim their 2,000 film library is worth two billion dollars. Did you pay two billion dollars for it? Investor info. The market cap is roughly $10 million, which means I'd expect earnings of about $667K just to support the current price. They have 1,000 hours of original programming which they expect to bring in $400K per year (revenues? at what operating margins?). They're attempting to buy some business that will bring in up to $400K per month "forever". But this is silly because they're buying it. They'll end up paying full price or more in an acquisition.
I believe that as we continue to announce what we are doing, the stock will go up. We currently have an appraised market cap of $150-$200 million and we are trading way below that cap, we have recently been offered a nine digit figure for our company and tangible assets of over $1,000,100,000. This is not bad for a company that started with nothing.
So they've taken a billion dollars in assets and destroyed 80% of the value, making them currently worth $200 million based on an anonymous valuation that they're proud of.

I think I'll wait for the audited results. Continue following for entertainment value.

China Digital Media (CDGT): Q3 results: AR went up 50% from Q2 and is now 20% of the assets. Revenues doubled since Q2, but gross profits only went up 63%. Operational income went up 91%. There's a huge gain from "Volume discounts earned" which is bigger than operational income. It wasn't there in Q2. They earned 11 cents with that huge gain, probably 5 cents without it. Oh yeah, I forgot, they have a massive dilution issue (an order of magnitude). Stop following.

China Evergreen (CEEC): Q3 results: Revenue down from prior quarter (can't really compare prior year). Gross margins are silly high: 93.8%. Low tax. 25.3% net margins. Earned $317K in Q3 and $1.15 million in 9 months. Insanely high dilution: 64 million shares from Sept 05 placement. 140 million shares as of Nov 14, 2005. So assume about 200 million shares, which might even be low. Annualized diluted earnings would be about 3/4 of a cent, making the shares worth about 11 cents. The stock is selling for 25 cents.

Balance sheet seems stable. As you'd expect from the dilution, cash flow was terrible. Operations ate up nearly $1 million. Capex was $3.7 million. Dilution produced $5.3 million. Too expensive, but continue following.

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