"Selling below tangible value"

Since any definition I can think of would only sound confusing, let's look at some examples. It is easy to understand when demonstrated.

First, let's look at ENWV's most recent balance sheet: http://money.excite.com/ht/rs/fin/qb/e/enwv.html?alias=/alias/money/cm/rs

Its total assets are 54.3 million. Nothing is listed under "intangibles", which is good. If there was anything under "intangibles", I would subtract it out of the value of its assets, since it could be an attempt to put a dollar value to "good will" or some bullshit like that, in order to pump up its value. I'm only interested in assets that consist of cash, or that can be sold for real money.

ENWV's total liabilities equal 12.72 million. 54.3 (all assets) - 0 (intangible assets) - 12.72 (liabilities) = $41.58 million, the total value of ENWV.

ENWV has 8.94 million shares outstanding. Since ENWV is selling for 2.88 per share, you could buy ALL the shares - the whole fucking company, in other words - for $25.74 million.

It seems absurd that you could buy a company with net tangible assets worth $41.58 million for only $25.74 million. If this condition persists, a megacompany could make a profit by simply buying all of ENWV's stock, firing all of its employees, and selling its assets.

Another way of thinking of it is this: each share of ENWV is 1/8,940,000 of the company. Since the company's total value is $41.58 million, each share has a tangible book value of $4.65. $2.88 sure seems like a bargain, doesn't it? The 2.44 I paid for it sounded even better.

Of course, the stock could stagnate, and could even sink lower. But I think the odds favor it eventually rising to at least close to selling for its tangible value. I'm willing to bet on it. Come to think of it, I DID bet on it.

This is why I was all over VNWI at $1.08 per share. With $92 million in cash, 39 million in liabilities, and 56 million shares outstanding, its CASH value per share was almost .95 per share. Its tangible book value was $1.57 per share, once its other hard assets were figured in to the mix. $1.08 looked pretty sweet, and I was rewarded handsomely for recognizing this discrepancy.

MSFT, on the other hand, has 74.5 billion in assets - 3.3 billion intangibles - 16.2 billion liabilities, for a total value of 55 billion net tangible value. Divided by 10.7 billion shares outstanding, its tangible book value per share is $5.14. Since it is selling for over $27 per share, I wouldn't buy it with your money.

Will MSFT go down to 5.14? Probably not. It may even go up, as buyers outbid each other. Will I buy it? Hell no. Well, if it forms a base below 5, I probably would... after everyone else has scrambled to sell.

Buy when there is blood in the streets. But don't buy JUST BECAUSE there has been a bloodbath - a stock on its way to zero will first have a huge decline, and you don't want to buy on the way down.

But what is the chance of a company that is "debt free, rich with cash, and selling below tangible value" going bankrupt, or having its stock fall to zero? Not bloody likely.

Does this make any sense to you?

ENWV is up 1.16 this morning, and is currently trading at 4.04! That was a really nice buy at 2.44.

MPH is my next value play. Bonus points for anyone who can explain why.

I also picked up some AFOP.

Son Of A Bitch!!!

ENVW up to $5.00

Kendricks,

Now what do you do with this pig?

Nice call on ENVW. I'm sure (I hate that word)McWiFi had something to do with it.

Duh, I'll have a big mac, fries, and 2 hours of Internet access please.

"Does this make any sense to you? "

yup - thanks

Not that Kendricks needs any help, but I just bought two round trip tickets on Frontier Airlines.

Frontier is a good airline to fly on. I rode them to New Orleans last year, and was favorably impressed. Unfortunately, I don't own their stock anymore.

What to do with ENWV now... On the one hand, snatching the profit is tempting. On the other hand, it could be a good momentum play, and I do think WIFI has a bright future. I just might hold onto this one.

To me this is a good example of sell on the news.

I think you are up around 100%???

Of course I normally sell to early.

I just sold, for a gain of nearly 100%. Not bad at all.

I am now long ECTX, FONR, MPH and AFOP.

Took my 10+% profit on ECTX, and rolled it over into CESI.

Better watch these small cap stocks; as we have been in a good market for the past few months and that may change as the second quarter earning come out.

AFOP is kicking some ass for me today!

Yes, the small caps (as well as the broader market) may be due for a dip. Due to the nature of the stocks I am holding, though, I would be willing to ride any downturn out with them.

I am not in any momentum plays right now, they are all bottomfeeding value plays. I'm up so much over the past week, it would be nice to parlay the gains into more. More. MORE!!!

Ah, lust and greed. Two of the most powerful emotions known to man. Which reminds me, I need to make some time to write up a little street girl romp I had recently. I never liked street girls before, but my mind has been changed....

Hey, I'm feeling good, I didn't buy this 5 years ago!!! Wonder why?? How could of I missed it?

300 to 3, amazing

http://finance.yahoo.com/q?s=LOR&d=c&k=c1&a=v&p=s&t=5y&l=on&z=m&q=l

Damn Kendricks has a pact with the devil.

Nasdaq down 1.5% and his AFOP up 13%

Ben-Dow 8950

Ldvee-DOW 9010


Kendricks-I won the DOW this week! 9118 for next week.

T_Bone-Dow 9177 (thanks for your early post)

T_Bone, I will be in TJ today.

VYYO - another good value play

ACTG looks excellent. Great value, revenues increasing, losses declinging, lots of insider buys.

Plus, with a book value of $1.97, cash value per share of $1.89, and no debt, it is truly a bargain at $1.31.

MSSN is looking hot right now, too. My favorite plays right now are MSSN, ACTG, and for the long run, FONR.

I won the DOW again! Just missed it by one point, too.

Kendricks you're da man. What's the pick for next week? Think I'll put together a little weekly table of the DOW manana en la manana while I'm drinking coffee and post it. I'm on beer now so fuck it.

Seems that the bear is over.

Schwarzenegger for Gov. I'd like to see Pamela Anderson on the ticket too. Perfect CA politicians.

http://www.schwarzenegger.com/en/index.asp

http://www.superpam.com/gallery/p9.jpg

Congrads to Kendricks as this weeks winner. It was a close race all week.

Ben picks 8950 again.

17-Aug-02_____8778.06_____
24-Aug-02_____8872.96_____1.07_____
31-Aug-02_____8663.5_____-2.42_____
8-Sep-02______8427.2_____-2.80_____
13-Sep-02_____8312.69____-1.38_____
21-Sep-02_____7986.02____-4.09_____
28-Sep-02_____7701.45____-3.70_____
5-Oct-02______7528.4_____-2.30_____
13-Oct-02_____7850.29_____4.10_____
18-Oct-02_____8322.4______5.67_____
26-Oct-02_____8443.99_____1.44_____
2-Nov-02______8517.64_____0.86_____
8-Nov-02______8537.13_____0.23_____
15-Nov-02_____8579.09_____0.49_____
23-Nov-02_____8804.84_____2.56_____
29-Now-02_____8896.09_____1.03_____
8-Dec-02______8645.77_____-2.90_____
15-Dec-02_____8433.71_____-2.51_____
27-Dec-02_____8303.78_____-1.56_____
14-Jan-03_____8785.98______5.49_____
18-Jan-03_____8586.74_____-2.32_____
5-Feb-03______8026.04_____-6.99_____
11-Feb-03_____7920.11_____-1.34_____
15-Feb-03_____7908.8______-0.14_____
24-Feb-03_____8,018.11_____1.36_____
1-Mar-03______7,891.08____-1.61_____
7-Mar-03______7,740.03____-1.95_____
22-Mar-03_____8,521.97_____9.18_____
12-Apr-03_____8,203.41____-3.88_____
21-Apr-03_____8,337.65_____1.61_____
11-May-03_____8,604.60_____3.10_____
16-May-03_____8,678.97_____0.86_____
19-May-03_____8,601.38____-0.90_____
27-May-03_____8,850.26____2.81_____
2-Jun-03______9,062.79_____2.35_____
9-Jun-03______9,117.12_____0.60_____
16-Jun-03_____9,200.75_____0.91_____
23-Jun-03_____8,989.05____-2.36_____
30-Jun-03_____8,985.44____-0.04_____
3-Jul-03______9,070.21_____0.93_____
11-Jul-03_____9,119.59_____0.54

business is/has been picking up

DOW 9200

I pick 9108. I am also gaining interest in CAMP.

I dumped MPH (I must have been on drugs to buy that dog) and VYYO to buy NVDM.

I see great things in NVDM's future. A good, solid debt-free company that is starting to turn around after getting kicked in the balls, and is selling for far below it's historical worth. MSSN, ACTG, and for the long run, FONR, also still look very good to me.

Ben picks 8950 again.

Kendricks-I pick 9108.

Ldvee-DOW 9200

Hey kendricks,

Why the hell did you sell ENWV? It hit $5.40 this morning!

What do you think about ADCT as a low priced stock?

Yeah, I know, I should've held on to that one... Hopefully one of my current picks makes selling it for that pathetic 90+% profit worthwhile!

HA! Only 90%?

You are making enough money to start supporting Milkman.

Wow, ADCT looks great. That is on the top of my list of new stocks to buy now, as soon as I have some funds freed up. Hopefully it doesn't take off before I get in.

Dow 9257

When will the DOW break 10,000? I won't have any money until I sell my house. It's on the market now, so if any of you know a rich Mexican looking for an executive home on a hill with ocean view in Bonita in-mail me.

Ben picks 8950 again.

Kendricks-I pick 9108.

Ldvee-DOW 9200

T_Bone-Dow 9257 (Late As Usually)

Damn! Should have held ENWV longer.

Yeah, I watch it everyday.

There should be a rule that you are not allowed to watch a stock that you have sold and it keeps going up.

At least you have the satisfaction of knowing that you have good analytical skills when it comes to stock picking.

Here is how to get income out of a company that pays very low dividends. In the last year I have received $22.50 in dividend from Southwest Air, but I have received $926 in option income.

Options Account
Southwest Air
Price
Date Description Price Per Share

4-24-02 Bought 1000 LUV $18,355.00 $18.36

10-22-02 Sold 10 November 15 Calls ($645.00) ($0.65)

10-22-02 Net Cost Per Share $17,710.00 $17.71

11-15-02 Bought to Close 10 Nov. 15 calls $204.00 $0.20

11-15-02 Sold 10 Jan. 17 1/2 Calls ($296.00) ($0.30)

11-15-02 Net Cost Per Share $17,618.00 $17.62

1-17-03 Options Expired

4-15-03 Sold 10 May 15 Calls ($695.00) ($0.70)

4-15-03 Net Cost Per Share $16,923.00 $16.92

5-16-03 Bought to Close 10 May 15 Calls $854.00 $0.85

5-16-03 Net cost Per Share $17,777.00 $17.78

6-25-03 Sold 10 July 17 1/2 Calls ($348.00) ($0.35)

6-25-03 Net Cost Per Share $17,429.00 $17.43





If Shares Are Called on , 2003

Net Profit From Stock
Net Profit From Options and Dividends $926.00
Net Profit
Percent Return Days
Annual Percent Return

Does Not Include Dividends $22.50

That's a good way of looking at it, Ben. It's better to make a good profit from stocks that go up, and keep going up after you sell, than to not be able to pick stocks that go up in the first place.

ACTG is a very interesting stock right now. I am in that one at around 1.37 (now at 1.58), but I plan on sticking around for a while. Their scheme to enfore the patent they have on digital streaming technology looks like it is already starting to bring in revenue, and could bring in much more. Plus, I like the fact that it is cash rich, debt free, and selling at a discount to tangible value.

Profit? What is a profit?

I haven't seen a profit in the past few years.

A profit is what CRNT is about to make for me after I buy it tomorrow. I've got that special feeling about this one. I like the recent surge in volume (right before earnings release), coupled with this chart pattern, and its excellent balance sheet, and the recent improvent in its revenues.

CRNT has all the signs of a winner.

For those of you with an adventurous spirit……….
Indevus (IDEV) is a relatively small pharmaceutical company. The FDA recently accepted a New Drug Application for “Trospium”, which is a treatment for over-active bladder. The price has risen from $2 (in January) to $6, based on investor enthusiasm that the NDA would be submitted and accepted.

The FDA should approve or deny within the next year. An approval should move the share price to at least a double, and possibly a triple of its current level. Of course a denial will send it back to the $1-2 range until another of the drugs in its development pipeline advances to the NDA stage.

I have owned IDEV since 1997. I plan to hang in there for four or five more years because a couple of the drugs further down the line have a chance to affect the price very significantly. If any of you are interested I can provide some more info…Bosco

Good news for ACTG today:

http://biz.yahoo.com/bw/030716/165180_1.html

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--July 16, 2003--Acacia Research Corporation (Nasdaq:ACTG - News; Nasdaq:CBMX - News) announced today that the United States District Court for the Central District of California has issued injunctions, resulting from Default Judgments, against five (5) Adult Entertainment companies for violating Acacia's DMT patents. The Court issued the injunctions against Extreme Productions, Go Entertainment, Lace Productions, WebZotic LLC, and Wild Ventures, LLC. The injunctions prohibit these companies from infringing Acacia's DMT patents by transmitting compressed digital video information from any of their websites.

Acacia also recently entered into License and Settlement Agreements with adult content providers Babenet Ltd. and White Sands Communications Inc., bringing the total number of licensees of Acacia's DMT technology to twenty seven (27).

Acacia's DMT technology, which is covered by pioneering patents, relates to audio and video transmission and receiving systems, commonly known as audio-on-demand, video-on-demand, and audio/video streaming, and is used for distributing digital content via several means including Internet, cable television, and wireless systems.

*******************************************

My analysis: This still doesn't mean that their patent has been tested by the courts (since the injunctions result from default judgments), but it does show that their revenues will be increasing to some extent due to the 27 license agreements they currently have, and presumably due to the increasing numbers of licensing agreements their legal strategy will create.

It will really get interesting when they go after some of the bigger players. There is some risk here, but the potential upside could be huge, and the stock is selling for below its cash value, and looks like it is coming up off of a solid base on good volume. I consider this an excellent entry point (I'm in at around 1.37).

I wish I had waited a little to buy CRNT. It certianly looks like a great entry point right now.

ALT looks interesting. Interesting in like getting sick to your stomach if you own it.

Good example of why biotechs are so fuckin dangerous to own.

ACTG down 10% today - still above my entry though. Why didn't you tell me to take profits on this one, Ben?

I'm going to look at ALT now. I'm in the mood for some dark humor this morning.

Speaking of dark humor, did you see what happened in Santa Monica yesterday?