Vertro Inc (VTRO)

[Rawnoc]

VTRO = PENNY NASDAQ LOOKING FOR A MULTI-BAGGER IMO

Here's why:

1. Last Q their turnaround efforts led to an EPS +.01 (w/o one-time gains). Company guidance is for further top and bottom line profitability improvement in future quarters.

2. Analyst estimates are for +.02 next Q, and +.11 EPS for the year and +.17 EPS for 2011. If true, this leaves VTRO insanely undervalued on a PE ratio basis.

3. VTRO has over 90% gross profit margins with SG&A costs steadily declining each quarter lately despite sales going up. This means that most of small increases in sales tend to go straight to the bottom line allowing for potential rapid EPS growth.

4. VTRO has some pretty decent institutional ownership. It's extremely rare to have a profitable and growing penny NASDAQ stock with institutional ownership.

5. VTRO needs to get over $1.00 to maintain its NASDAQ listing. I speculate that there will be a push from investors to help make that happen and as it gets closer to $1.00 the buying will pick up as the NASDAQ delisting fears wade off. Furthermore, I speculate that the next earnings report will be structured to blow away the street to help make the $1.00 bid price happen. How so? I speculate that certain expenses will be cut and/or delayed to at least temporarily boost numbers such as R&D expenses perhaps. (Note -- I have no basis on this speculation other than it just seems like the smart thing to do coupled with their steady ability to cut costs quarter after quarter in this successful turnaround effort)

All just my opinion. I have a small speculative position in VTRO. It's not my favorite stock in the world as I don't understand their business very much, but I do like their recent numbers vs. the cheap apparent price of the stock in light of those numbers.