Replies to post #134 on Value Microcaps Pick Six Lotto 14

[timhyma]

The challenge:

AVRNQ.pk- should come out of bankruptcy this quarter. There is a shareholder alliance fighting for the stockholders, and I think we get 20% of the equity (Tangable book around $6). They posted at 32 cent eps for the last quarter also. Ethanol margins are down from last quarter, but they should still be profitable. Since it trades at 30 cents, not a lot to lose, and could be a 4-bagger if I'm right. I own this one.
http://finance.yahoo.com/q?s=AVRNQ.PK

DAAT.ob- retail sales where better than expected, and this one is poised for an upswing.P/E of 7 makes this an undervalued play, imo. In September they announced a large holiday order, that should hit the books this quarter. Depending on how that reaching the botom line- could see this one jump well over a buck. I own this one.
http://finance.yahoo.com/q?s=DAAT.OB

GLOB.ob- announced three new contracts during the holiday period. should increase the bottom line. They are into blood management systems, and with the world short on supply, they become a more viable player, imo. I own this one
http://finance.yahoo.com/q?s=GLOB.OB

TGC- oil/gas play at 50 cents. They hedge a portion of production between $60-$80, which I think is a smart move. this is my wildcard pick, since they are on the verge of becoming profitable. I own this one.
http://finance.yahoo.com/q?s=TGC

TSTA.ob- My clean energy play that fits into the contest. They design/make the scrubbers for smoke stacks for industrial companies, that should see some of the billions throw at them from the Fed inititives. I own this one.
http://finance.yahoo.com/q?s=TSTA.OB

WH- They make drill pipe, mostly for the China market, and as companies ran lean during the recession, they should see increased orders as money frees up, and exploration continues. They announced a $10mil repurchase program a couple months ago. Trades at a 8 P/E, and I'm waiting for a dip to enter.
http://finance.yahoo.com/q?s=WH

[ghmm]

RE THE NSOMNIYAK CHALLENGE

I've followed the VMC boards a bit for some time and thought to enter. I don't generally invest for this length of time so I don't expect my picks to do especially well but who knows :-)/

CTIB - They make foil balloons. If you buy balloons from the dollar store there is a good chance they are made by CTIB. The main attraction here is EPS and cash flow. While I am not anticipating an short term catalysts the low valuation combined with low float could easily result in a quick rise with no news.

LMLP - I was reluctant to pick them since they have double in the past month but the big reason that they did double was a settlement in a patent dispute. The (short term) upside could come in other settlements (they have a bevy of suits with much bigger plantiff's). LML Payments is a canadian company that deals in on-line payments. I like the company's main business and some appreciation could come from a good christmas quarter in on-line transactions but clearly any short-term major pop would come from additional settlements. People wanting a quick review of the company can get one from this (paid) research report:
http://content.stockpr.com/lmlp/media/4740931dcf8067ca64d7068678634f88.pdf

UVICF.OB - Is actually a florida company but Canadian listed (UVI.V). They are a contact lens company with a nice royalty stream. The (short term) kicker for them is that they will likely close on the repurchase of slightly less then half the stock. They got (IMO) great terms on a loan that can be repaid from the dividend they won't be paying on the shares. I have seen a lot more info posted and there is a board with more detail for those interested.

MNTA - The (short term) kicker is a potential decision allowing their generic Lovenox. If they are approved as the sole generic the stock could have substantial appreciation rather quickly. There is a board for momenta and in addition DewDiligence maintains a ReadMe first with just about everything you ever wanted to know about the company and the competitive landscape on the Biotech Values Board (a great source of info for the Biotech investor) the most recent readme is at:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44689789

This was my first time entering the contest and I wasn't quite sure I had all the rules down. So these two made the list mainly because of having to get 2 more picks in quickly (I would have probably put MRCR.PK and IRD.TO but didn't think they met the requirements).

MDF - I actually want this stock to drop (but its been going up the past week) because I'ld like to build a position. So I won't post much DD :-). Actually there is a board moderated by stanu78 who has been a holder for some time and was kind enough to answer several of my questions. My reason for picking it in the short term is that with the CEO resigning a wouldn't be shocked with a buyout or perhaps just some renewed interest from people who may not have liked the outgoing CEO or see the company taking a different direction. Ok, Ok, my real reason for picking it was to jinx it so it drops to my buy price :-).

ITEX.OB - I don't follow them very closely these days but the share price seemed low on a historical basis and thought a good earnings report could move them. They operate a sort of on-line barter system. A little while ago Sardar Biglari made a hostile bid for them but was rebuffed.

[bbotcs]

nsomniyak challenge:

This is easy since I kept 3 of my picks from PSL 13:

$CASH$ - Great for a trade down the road.

APT: I guess you'd have to say that this is a FORMER H1N1 play since the virus was a false alarm for the time being. Alpha Pro Tech, makes disposable protective apparel and infection control products in the United States and internationally. APT is a "flu play" because they make face masks. Surprising, they have another business line: construction weatherization products consisting of house wrap and synthetic roof underlayment to construction supply and roofing distributors. The weatherization products business is doing well. The company has ZERO debt and 17.48M shares in the float. Looking for good numbers because the factory ran 24/7 last quarter producing masks. The next 10Q is due out in March.

DAAT.ob This manfacturer of gun supply equipment and home safety items like small metal safes has been around the main board for years. There is no hotter item these days than guns. I expect the company to continue to do well selling their products to Wal-Mart. I'm looking for good numbers in the next 10Q. The customers for DAAT's products are not the type of people to let snow keep them from getting to Wal Mart--think 4-wheel drive trucks. Meaning? I doubt the foul weather in the East last month hurt their sales. Think snow up to your cheeks the weekend before Christmas! LOL.

DCTH: Delcath Systems is a development stage medical company. Here is the gist of their "business": "It focuses on the development of the Delcath PHP System, a Phase III clinical trial product, which isolates the liver from the patient’s general circulatory system and delivers high dose of melphalan hydrochloride or other therapeutic agents directly to the liver." This is a procedure for cases in which there is no alternative therapy. Delcath is conducting a Phase III trial and should do a submission to the FDA this year. 2010 should be a big year for the company. Float: 24.3M and ZERO LT Debt. Any news updates about the progress of the Phase III trial should boost the stock, imo.

MED: This is my number one favorite COMPANY. It is a NutriSystem competitor that is starting to come into its own. They are expanding into Texas. LT Debt: $7.14M Float 12M. MED has a great 2009. Their walk-in franchises have reached only 5 States. Their products are available online, of course. www.medifast.com

OFI: Not a good choice. This California food processing company has had revenue issues ever since they lost their big customer, Heinz. With gasoline prices on the rise again, I'm not so sure how much food their customers will be ordering. Think restaurants and airline travelers. Probably will be trading out of OFI early in the contest.

[steeledge]

NSOM challenge:

I can't remember the last time my PSL picks didn't have a heavy dose of China stocks, and I can't see a reason to stop now. It's getting tougher to find the gems with bagger potential, but I feel that the picks below all maintain that potential. If I could have picked warrants, that would have been even better! And now to the picks...


SRRY.OB - This little china recycler has done .07 EPS the previous 9 months, and I'm thinking will end up with .09 for 2009. There's impetus for '10, which could push EPS up to say .12. For a stock trading ~.40, in a sexy green China sector, count me in. Looking for an astounding 100% return in the PSL14 timeframe.

CCME - This probably the most hyped (and justly so) SPAC deal I have ever seen on the China front. It's currently suffering from warrant overhang which will end ~1/29, and after that I expect a strong run, maybe 50%. Great growth and EPS are coming, even considering the warrant dilution.

XNYH.OB - In the financial printing industry in China. Not sexy, but there's value here in XNYH. This is one of those "it hasn't been found yet" type of plays, and if they can post some decent #'s, it's a doubler. I'm expecting appreciation up to about .40/sh, or just over 50%, in the PSL14 timeframe.

CBTE - a true wildcard pick due to its dependence on factors outsided of its operations. Here's the thesis: If the merger with its Chinese peptide partner goes thru, I'm expecting 150% return (stock to trade up to about 1.50)...if it doesn't, it'll drift for a loss of about 80% i would think. The shareholder vote should be a no-surpriser, but CBTE has always been a bit of a disappointment! (and we don't know when the vote is going to be!)

CHBU.OB - Is there a hotter theme than China fertilizers? This one and the one below (CIHD) are really the two least-known. CHBU has a slight scent of scam in it, but I don't know that for sure obviously. Loaded with cash, they need an uptick in their organic fert biz to really get people interested. At around .50, I figured this could either do nothing, or pull in 100%. I'll settle for 50% for PSL14.

CIHD.OB - This chinese specialty chemicals play generates most of its revs from fertilizer, but has some backend biz in snow-melting agents and now thiophene (they recently got an order from Sanofi-Aventis for thiophene's use in their pharmaceuticals). The real reason to own CIHD has to do with a few interesting non-operating factors: 1) Uplist coming, 2) CAGC has been CRAZY, and CIHD is thin enough to get some CAGC players once uplisted, 3) Rodman Renshaw is behind CIHD just like they are CAGC. I"m excited for this one but have no idea where it will go and in what timeframe. If it gets uplisted in PSL14 timeframe, I'm thinking 50% is probable, but it could get crazy.

[valuemind]

NSOMNIYAK CHALLENGE:
AYSI.OB: high growth
CHIO: too cheap
CSSV.OB: value play
CYXN.OB: can not believe why I could get at this price even out of finacial crisis
JADA.OB: high potential
WTN.TO: wait for turnaround

[Fisher]

THE NSOMNIYAK CHALLENGE

AYSI.OB - Benefits from increased activity of iron ore miners in Australia. Business is experiencing significant capacity buildout to meet demand, bringing on a unique new type of wearplate, expanding internationally, etc. Well known

CCEL.OB - The stem cell industry should see continued growth given liberal government. Stem cell technology is growing at an extreme clip with new applications being proven weekly.

GAXC.OB - Again, well known. Cheap on an earnings basis from ATM business and with entry into the DVD kiosk business the growth opportunity for 2010 is extremely high.

GRMC.OB - Wildcard. Exploration gold miner with proven resources. Operates some sluices that are low cost. When it thaws out they're going exploring upstream to find source of gold which could be huge. Should benefit from future gold price stability/increase

NHC.TO - In the process of settling business issues. Short-term expectations of full-capacity usage, re-enstatement of dividend issuance, increased earnings.

TELT.OB - .20+ EPS quarters, resides in the US. Maybe one more quarter will prove the last two Q's weren't a blip.

[zenvesting]

NSOMNIYAK CHALLENGE:

AMLJ.OB: Own it....have owned it quite a while waiting for this "need to see it to believe it crowd" here to join me :) In 2005 they announced a $30M contract with Raytheon....and have finally just begun to enter the production stage of the contract last quarter and posted a healthy profit. There's two divisions to the company, one growing and profitable electronic components manufacturing business mainly for DOD clients and the second is a wild card in the early stages of developing satellite-based power grid demand response and SCADA products for major utilities. Here's a DD Post of mine about their core microwave component business:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44186224&txt2find=mald

CCEL.OB: Don't own it now, but have in the past....and might in the future. Recently profitable stem cell banking company and a nice potential wild card with some interesting proprietary stem cell technology.

CSGH.OB: Don't own it....never have.....but have been thinking about it lately. Chinese Lithium battery materials supplier that seams pretty legit.....and is getting involved in the LiFePO4 anode material market....have lots of customer trials going on now....could be interesting.

MILL.OB: Own it. Got pumped into this oil stock early :)....and glad for it....looks like it could go pretty far from here still! It's been through a lot of changes in the past month, but by my best guess it's now a company with approximately 35 million fully diluted shares and more than $300M NPV in high quality reserves in Alaska. It seams pretty undervalued to me, but the next filing should help clear-up the details....and I suppose they need to prove they can operate it to command a higher valuation....and it looks like they've got a group that can deliver.

NHC.TO: Own it. It's a bit complicated....but it could be a multi-bagger IMO. The company owns controlling interest in Ambulatory Surgical Centers (ASCs) in Texas, it used to pay a 10 cent monthly dividend and trade at $15+, but they had a few issues with currency hedges, a billing dispute with a major insurer at one of their ASCs, and a dispute with the former CEO about it's acquisition in surgical centers from his affiliated companies. Two of three issues are resolved.....and now there's a six month timeline on the last issue.
1 - The currency hedges were closed at near break even in 9/09....and there will be no more risks taken in the currency market.
2 - The major insurer settled with them in 11/09 and signed an "in-network" contract at that ASC, which means lower reimbursement rates, but the CEO has said it will have similar margins to their Kirby ASC which has an "in network" contract with the same major insurer and has a 30% operating margin. The key is ASC involved in the dispute has been very slow the past year while this major insurer withheld business, but the major insurer's business resumed there on 12/1/09. Also, previous claims will be adjudicated with the insurer....which should give a healthy boost to the next quarterly report too :)
3 - The last issue is the arbitration with the former CEO. The arbitration was just announced and will be decided in 6 months (by July). There's about $8.3M in escrow money at stake in negotiations. The company was attending mediation sessions prior to arbitration and said it had achieved an understanding with all the issues but one, it's not hard to imagine it's the escrow distribution. This all relates to the company's purchase of it's interest in the Palladium Partnership from one of the former CEO's other companies.


WKBT.OB: Don't own it, don't even know what they do....just stole it from someone elses picks because I needed another qualifying stock at the last minute (sorry, my real job has been keeping me too busy lately).

[abh3vt]

Reasons for PSL14 picks.

First, I'm expecting a bit of a pullback in some of the China stocks....so I've got a cash pick as part of my six. The other five:

1. CCME - I think everyone knows about this one already. Great balance sheet, cash flow from ops, low projected PE, dominant position in an attractive market. I'm expecting a very strong Q4, which should give some confidence in the huge make-good net income expected for 2010. If they come close, the fd eps could be around 2.00/share. Target: 20+

2. SOKF.ob Soko Fitness. This one (beauty spas and fitness centers in Northeast China) hit the radar screens with a very strong quarterly report released this week. Well managed company, with strong organic revenue growth, excellent margins, good balance sheet, very low forward PE. Tax rate is low, but sustainable because of a quirk in tax laws for this segment. I expected 0.70+ for FY10, and have a short term price outlook of 6-7/share.

3. EDS - "wild card" pick, but the financials only show the SPAC's results. The company merging in is Exceed, a Chinese sports clothing company. They appear to be guiding for fd eps of 1.40+ for FY09. Foreign filer, so we may not see the results for a little while. Needs to do a better job with transparency and using PR/IR to improve its exposure to the investment community. Target: 12.50+

4. CNYD - solid company with many different revenue streams. Owner of tourist attraction rights, a TV station, and a new exclusive right to show advertising on all high-speed trains in China. Excellent margins, strong sales growth and good cash flow generation. Will probably need to do a capital raise this year, so the safe play would be to wait until after its placed...but its a good lt hold.

5. TXIC - chassis/cab manufacturer in china. I think warrant overhang has been holding this one back; once that clears, the low forward PE of 6x should attract new investors. Cheap relative to other stocks in this segment: CAAS, WATG, SORL and others have PEs north of 15x. I'd be happy with 10-12x. Target: 14+

[kozuh]

nsomni-yak-yak-yak challenge ...

BKYI.ob ... super-fast and super-accurate fingerprint-recognition software;
they have cash on hand and are profitable; several countries are using their
software for Voter ID; wish the USA took voting that seriously ... ))<:}

CSGH.ob ... I don't care what Bobwins says, Lithium Batteries are here to stay.
This Chinese company has a great Balance Sheet and Income Statement ...
but then, have you ever met a Chinese company that didn't ... ))<:}

SSVE.ob ... Out-sourcing US jobs to the Philippines ... how patriotic ... oh,
well, it's a dirty job but someone has to do it. I see many new contracts and
rapid growth for this California company

AAB.to ... This is a strange fish; it's a "Bank Holding Company" so it has
invested in a set of start-up companies and owns a lot of their stock; I like
the companies they are holding (mostly Canadian), but their stock price
will probably move up slowly, not dramatically; this is a HOLD & MOLD.

TELT.ob ... Honestly, I selected this stock because so many of the folks on the
Mother Board like it and expect it to double soon. Their telecom products
don't really excite me and I find it hard to understand why they have anything
unique to sell in the market place, but what do I know; I'm just an un-frozen
cave woman ... .

OGC.to ... Can't leave home without a good Gold Miner in your pocket; this
Australian company is increasing production and their mines are in "politically
safe countries" (ie, NOT in Venezuela or Africa).