Adams Golf (ADGO) On Fire

Cheap Stocks 26 Net/Net Index component Adams Golf (ADGO) has had quite a run lately.  It is the second best performer in our net/net index, and is up nearly 70% since index inception (9/13/2011).

There's been some activist activity in the name recently, which has no doubt been helping to move the stock higher.  When CS 26 was launched back in September, ADGF was a $42 million market cap company trading at .99 times net current asset value (NCAV); it now has a $72 million market capn and trades at 1.68 times NCAV.

Adams Golf (ADGO)
Price: $9.21
Market Cap: $71.9 million
NCAV: $42.8 million
Price/NCAV: 1.68
PE: 13.5
Cash/Share: $1.45
Total Debt: 0
Tangible Book Value/share: $7.16

Yesterday, CEO Chip Brewer, who has been with Adams for 13 years, resigned.  Taking the reigns on an interim basis will be company founder, and Chairman of the Board Barney Adams. Today, the company is scheduled to report fourth quarter earnings.  Certainly an interesting week for Adams Golf
*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.

Cheap Stocks Named to Top 22 Investment Blog List

We were honored to be included in Vuru's list of the best investment blogs. Click here to see the list and associated commentary.

Cheap Stocks 26 Net/Net Index Update- Up 18.6% since inception

Net/net investors are typically not accustomed to instant gratification.  But we are seeing some good early results with the CS 26 Net/Net Index, which is up 18.6% since inception (9/13/2011).  The true test is not the short-term, but a period of at least two years. 

Furthermore, the overall direction of the markets has been higher since we rolled out the Index, and the benchmark Russell Microcap Value Index is up a solid 14.5% during the same timeframe.

We need to see a period of market stress to truly re-test our net/net index approach.  It's way too early to declare this approach a success.  Our previous net/net index experiment, the Cheap Stocks 21 Net/Net Index, which  was cap weighted, and commenced in February 2008, performed fairly well.  The jury is still out on the current incarnation, which is equal-weighted. 

Top performers since inception have been  Synageva BioPharma (GEVA, +287%, formerly Trimeris), Parlux Fragrances (PARL, +67%), ModusLink (MLNK,+49%), and Adams Golf (ADGF, +40%).

Top detractors include Advanced Battery Technologies (ABAT, -66%), Opnext (OPXT, -33%), and Imation (IMN, -20%).


*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.

Cheap Stocks 26 Net/Net Index Update

Three months since launch, the Cheap Stocks 26 Net/Net Index is plain and simple getting the stuffing knocked out of it.  We are not all that surprised at this point.  The Russell Microcap Index is up 7.3% since the inception of CS26, while the Index itself is up about 2.1%.  We expect a roller coster ride with this index over the next couple of years, and believe that a 2 year timeframe is the minimum time period for proper evaluation of indexing net/nets. 

So far, much has happened to the constituents of CS26.  BigBand Networks was acquired, which resulted in a 65% gain.  Rather than replace BigBand, the proceeds now sit in cash. 

In November, Trimeris (TRMS) merged with Synageva BioPharma Corp (GEVA), and that company replaces Trimeris in the Index.

The winners to date include ModusLink (MLNK, +35.8%), Synageva (Trimeris-GEVA, +116%), and RCM Technologies (RCMT, +21%).  The losers include Advanced Battery Technologies (ABAT, -73%), Opnext (OPXT, -37%) and Volt Information (VOLT, -24%)

Stay Tuned.

*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.

JG Boswell Fundamentals Update- 2011

Thanks to the addition of the most recently available year-end data, we've now strung together nine years worth of fundamentals for JG Boswell. Due to the complexity, and growing size of our spreadsheet, we've decided to share just some of the data that will put BWEL's current valuation in perspective.


JG Boswell (BWEL)
9 Year Averages Based on Annual Data:
P/E: 26
Price/Sales: 1.58
Price/Book Value: 1.41
Net Profit Margin: 7.87%
EV/EBITDA: 9.51
Dividend Yield: 2.29%
Market Cap: $616 million
Enterprise Value: $718 million

Current Data (2011 Annual)
Price: $714 (10/26 close)
EPS (Fully Diluted): $48.05
P/E: 14.9
Price/Sales: 1.62
Price/Book Value: 1.32
Net Margin: 10.9%
EV/EBITDA: 7.47
Indicated Dividend Yield: 2.24%
Current Market Cap: $713.1 million
Current Enterprise Value: $918.9million
Cash: $1.31 million

*The author has a position in JG Boswell(BWEL). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.

Cheap Stocks 26 Net/Net Index Update: Bigband Networks to be Acquired

We've already had one name change, and a reverse split (Steel Excel, formerly ADPT) among the members of the CS 26 Net/Net Index, and now another name is being taken out.  Big Band Networks (BBND) is to be acquired by Arris for $2.24 per share.  Big Band is now the leading performer since inception for CS26, up 67%.  If and when the deal is completed, for the purposes of the index, proceeds from the sale will be put in cash.

Its only been one month since we launched CS 26, and given past experience, there will likely be more acquisitions, perhaps a bankruptcy, and other surprises during the two year period we'll be traking this index.

So it goes in Net/Net land.

*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.

Cheap Stocks 26 Net/Net Index Update and Crates

There's been one change in the Cheap Stocks 26 Net/Net Index since we rolled it out on September 13th.  Adaptec has undergone a 1 for 10 reverse split, and changed it's name to Steel Excel Inc (ADPTD).  There will no doubt be more changes on the way; at least that was our experience with the CS21 Net/Net Index.

Four weeks in, CS26 is down 2.59%, while the Russell Microcap Index, the benchmark we are using, is up 1.89%.  The biggest gainer so far is Trimeris (TRMS), which is up 41%, while the biggest loser, Opnext (OPXT) is down 23.4%.  Stay tuned.

Crates??

You may have noticed the reference to "Crates" in today's title, as well as the ad for Overhead Crates that was added to the site this morning.  This is a complete departure for us, but we wanted to recognize this amazingly simple innovation.  This is an unpaid, unsolicted ad, and we have no financial ties to the company that has created this product.  Nonetheless, we felt compelled to bring the company, and it's product to our subscribers attention.

Overhead Crates has designed a simple product that takes advantage of space available in many basements, that most people don't realize could be utilized as storage space.  We've installed the product ourselves, and found it to be brilliant!  A very simple installation!  Check out the site for yourself.

*The author has no position in the companies mentioned. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.