I traditionally have viewed value a bit more loosely than folks here. For example, I typically have little interest in a stock selling at a discount to cash if the core business is essentially worthless, and causing the cash to shrink. I especially like to take things like quality of management, market position and new products (and their market potential) into account.
In particular, my current market thesis is that the general economy is uncertain and may remain so for years. Therefore, there is no inherent reason that a traditional value stock may not just sit there like a log. Any stock I buy today must be experiencing a major increase in Served Available Market (SAM), such that there is every reason to believe that the company can perform well under almost any circumstances.
In my opinion, FARO ($2.71) is such a (microcap) company, offering both good value and terrific potential. If anyone is interested I suggest the following:
-read Q3 report
-listen to Q3 conference call
-read Q4 report, out last night,
-listen to Q4 conference call, which took place at 11 AM today,
-read my various recent posts on YAHOO (under jeffbas)
-read SEC filings as you see fit
-note Insider holdings and recent purchases
-note recent 5% SEC filing by Hummingbird and update adding more shares.
faro.com
Note the stock is thin and was up a good amount on heavy volume today on both a good report and conference call. I would have to rate the 45 minute CC as one of the best I have ever listened to as to management performance, value of content, quality of interest and questions from institutional holders, and quality of answers.
Disclosure: I have bought a decent amount recently between $2.20 and $2.50. In view of the sudden runup, it would not surprise me if it falls back, in this market. However, I also have no problem thinking of this as POTENTIALLY a $25 stock in 3-5 years, as a result of increasing sales to perhaps $100 million and earnings to perhaps $1.50 per share aftertax (on excellent 60% "leadership position" gross margins). |
