Below are some buys I've made recently and some of the reasoning I used in the decision process. [Please note that the reasons I provide are more on the nature of sharing some of my thoughts, and not the whole thought-process. Additionally, some of these purchases may turn out to be short-duration ownerships as I am quite adroit in the ability to trade in and out. Given that, I may or may not (probably not) come back here and inform the board of the sells for any number of reasons. The most probable is that I don't frequent here much anymore and i just may forget to update the board].
Most of these are very small-cap companies and certainly are not appropriate for most investors. Most are also very thinly traded so they provide extra dangers of illiquidity.
WSCI--- a very small tool-and-die contract manufacturer in the Mid-West. I have followed this company for most of the last 7 years. Solid (if somewhat stodgy) management, grew top-line revenues in the last FY by 38%, bottom-line almost doubled, pays a nice dividend (about 5% at these prices), the only debt they have is for the purchase of their manufacturing facility, they have been expanding that facility and expanding their customer base from an unhealthy reliance on one customer to a broader reliance on several but this still has a ways to go to achieve a more comfortable mix.
RIC---- this is my most recent purchase. A very small gold junior with a market cap of about $30 million and about $24 million of it is cash on hand. While they are EPS negative, my cash-flow calcs show they are nicely cash-flow positive. Their properties are in politically stable regions (Ontario, Quebec and Newfoundland). They have no debt and are selling for about half of book value. My napkin calcs show me that I am buying about $92 million of current and future profitability for about $6 million ($30-$24). Seemed like a nice enough price to put some in the drawer and see what happens.
BEXP---a natural gas driller with a big footprint in the Bakken field. Stable management. selling for about half of book value. Another play where I just buy the shares and forget about them.
GG---one of the best gold miners in the business. I've made a lot of money of them and their predecessor Glamis. This is more of a charting play as I believe they have now headed into a new uptrend. But gold mining shares are not for any but the most calloused investor as the price moves in this field are gut-wrenching.
ACUS---this micro-cap is pure speculation. They are a one-trick pony and that trick has yet to be approved by the FDA. If approved, this one could be a multi-bagger but if not approved it will go to zero before you can get out. The trick is a much cheaper methodology of cardiovascular imaging than the currently used systems. Their FDA filing was accepted, there will be a review on Dec 10th and the FDA has until the end of Feb, 2009 to render its decision. This one should be avoided by anyone with a brain, but if one insists on being brainless it should only be played with money you are perfectly OK with losing 100% of. It is cash-flow negative, on life-support, and it will be a race to see which comes first: the FDA decision or bankruptcy.
KG--this one survived my screening of all stocks about 2 months ago. It has great cash-flow, profitabilty, revenue growth, etc., etc. Since purchase it has gone down a bunch. It is sometimes tough to hold onto your analysis in the face on the bear onslaught! But this is one that has survived in my portfolio.
Timba |
