CHEAP STOCKS
Semi-Annual Review

We thought it would be interesting to take a look back at all the companies we’ve issued reports on since this site was re-launched in late fall 2004, to see how they have performed....warts and all. (See archives for company reports)

Company Ticker Report Date Report Price Current Inc(Dec)
Duckwall Alico (DUCK) 12/5/04 17.00 20.97 19%

GIII Apparel (GIII) 12/10/04 6.30 8.37 30%

Avoca Inc (AVOA) 12/22/04 2760.00 4125.00 62%

St. Joe’s (JOE) 12/29/04 63.85 82.04 29%

JG Boswell (BWEL) 01/08/05 600.00 640.00 8%

PICO Holdings (PICO) 01/25/05 20.95 27.75 33%

Hanover Foods (HNFSA) 02/22/05 90.50 118.00 31%

Tootsie Roll (TR) 01/28/05 30.99 31.03 2%

Tejon Ranch (TRC) 02/15/05 46.81 53.07 13%

Discovery Partners (DPII) 03/17/05 3.36 3.02 -11%

Nu Horizons Electric (NUHC) 03/30/05 7.03 6.40 -9%

Inforte (INFT) 04/23/05 3.33 3.53 6%

Zapata (ZAP) 05/11/05 8.42 6.20 -26%

Silverleaf Resorts (SVLF) 06/03/05 1.30 1.46 12%

Average Holding Period Return: 14.21%

The return figures presented are not scientific, they are merely the holding period returns per company; they are not annualized. One thing you will notice is that all of the companies with negative returns are from research issued within the past three months. This brings to mind one of the most important points when it comes to investing in the type of securities we follow here at Cheap Stocks: Your time horizon cannot be short. Patience is the name of the game. That does not mean that you should hold onto a losing position forever in the face of deteriorating financials or conditions. Patience should not give way to irresponsibility.

Furthermore, if you believe in the NCAV philosophy, or the other deep value concepts we’ve written about, it’s very important that you not invest too much in any given name. Consider building a portfolio of companies over time. Diversification is still a prudent concept, even in our Cheap Stocks realm.

Companies are often “cheap” for good reason. Our mission here is to identify those that we believe are undervalued, and overlooked. We won’t always be right. Thanks for reading.

**The author has positions in the following stocks mentioned in this report: TR, TRC, JOE, BWEL, AVOA, PICO, ZAP. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.