Like the famous TV-show pitch for "Seinfeld," Soapstone Networks (SOAP, news, msgs) is essentially a company about nothing. A once-hot 1990s tech play, then known as Avici Systems, Soapstone exited its router business last year. Quarterly revenue dwindled to just $2.3 million in the third quarter of 2008 from $45 million in the last quarter of 2007. Operating cash flow went into the red.
So why bother? Because, while its stock trades for only $2.40 a share, the company has more than $6 a share in cash. This, of course, makes no sense. The company will use the cash to launch a business, get bought out at levels well above $2.40 a share or issue a special cash dividend. In any scenario, shareholders are likely to win. That's why the stock is a holding of John Buckingham, the manager of the Al Frank Fund (VALUX) and publisher of The Prudent Speculator, a top-ranked investing newsletter.
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"We are what we repeatedly do. Excellence, therefore, is not an act, but a habit." - Aristotle
