Cheap Stocks Annual Review
Here is our first annual Cheap Stocks review. Some of the companies we presented did well. In all, 14 were up, and 8 were down during the holding period. The average holding period return was 24.6 percent. Keep in mind, this is simply an average of each company's holding period return. It is not time weighted, and is for illustration purposes only.
Company(Ticker)Report Price,Report Date,Current Price (12/23/05),%inc(dec)
Duckwall Alco (DUCK) 17 12/5/2004 23.05 35.6
GIII Apparel (GIII) 6.3 12/10/2004 12.91 104.9
Avoca Inc (AVOA) 2760 12/22/2004 4500 75.7
St Joes (JOE) 63.85 12/29/2004 70.31 11.5
JG Boswell (BWEL) 600 1/8/2005 625 6.3
PICO Holdings (PICO) 20.95 1/25/2005 33.9 61.8
Hanover Foods (HNFSA) 90.5 2/22/2005 113.05 24.9
Tootsie Roll (TR) 30.99 1/28/2005 29.31 -1.4
Tejon Ranch (TRC) 46.81 2/15/2005 40.01 -14.5
Discovery Partners (DPII) 3.36 3/17/2005 2.65 -21.1
Nu Horizons Elec (NUHC) 7.03 3/30/2005 10.22 45.4
Inforte (INFT) 3.33 4/23/2005 3.87 16.2
Zapata (ZAP) 8.42 5/11/2005 6 -28.7
Silverleaf Resorts (SVL) 1.3 6/3/2005 4.08 213.8
3COM (COMS) 3.33 7/18/2005 3.79 13.8
Six Flags (PKS) 7.2 8/28/2005 7.56 -5
Maui Land & Pineapple (MLP) 33.16 9/7/2005 34.29 3.41
Plum Creek Timber (PCL) 38.83 9/17/2005 37.05 -3.6
Bob Evans (BOBE) 22.75 10/9/2005 23.84 4.8
Trans World Entertainment (TWMC) 6.35 11/2/2005 5.98 -5.8
Jones Soda (JSDA) 4.88 11/12/2005 5.22 7.0
Blair Corp (BL)41.2 11/19/2005 39.75 -3.5
Average Holding
Period Return 24.6
Taking Our Lumps
We blew it with Zapata Corp (which the author owns). Despite being asset rich and slowly being converted into cash with the sale of Safety Components, and possibly Omega Protein, shares are down nearly 29 percent since our initial report. Still, we hold the shares.
Taking Praise
Silverleaf was up sharply, and we still don't know exactly why. Sure, the company reported solid 3rd quarter results, and is reducing debt, but shares have more than tripled since our report. The author does not own this one....sadly.
Into The Future
2005 was a great year for this site. We look forward to providing compelling research and investment ideas in 2006. Heck. We might even consider launching a micro cap fund....someday
**The author has positions in the following stocks mentioned in this report: TR, TRC, JOE, BWEL, AVOA, PICO, ZAP, MLP, PCL. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Tuesday, December 27, 2005
Friday, December 23, 2005
Merry Christmas from Cheap Stocks
We hope you enjoy this most blessed time of year. We thank you for visiting our site the past twelve months, our hits are up substantially from this time last year.
Cheap Stocks Annual Review
Next week, we will publish our first annual Cheap Stocks review. We'll tell you where we were right, where we went wrong, and we'll put it in terms of returns.
We hope you enjoy this most blessed time of year. We thank you for visiting our site the past twelve months, our hits are up substantially from this time last year.
Cheap Stocks Annual Review
Next week, we will publish our first annual Cheap Stocks review. We'll tell you where we were right, where we went wrong, and we'll put it in terms of returns.
Sunday, December 18, 2005
Skiing Anyone? Part II of II
Blue Ridge Real Estate
Ticker: BLRGZ
Price: $38.50
Avg Volume: 200
Shares Out: 2.39 million
Market Cap: $93 million
The Fundamanentals
Total revenues for 2004 were $17.375 million, down from 2003s $18.2 million. Net income was $6.25 million in 2004, which included a gain from discontinued ops of $12.4 million before tax, versus 2003s net loss of $879 thousand. Ski operations generate more than half of company revenue, but has generated an operating loss for the company the past couple of years. Furthermore, ski revenue is on the decline, to $9.74 million in 2004 from $12.3 million in 1998.
Clearly, if there is significant value within Blue Ridge, its not for earnings, or sales growth. If anything, the potential value is in the company's assets. Many value players (ourselves included) sometimes get hung up on the potential value of an asset, ignoring the fact that if value is not being unlocked through current operations, it may never be. We don't know if thats the case with Blue Ridge. We are intrigued by the company's land holdings, and want to be impressed by the ski operations. We're just not sure what it's all worth. How's that for honesty?
Kimco Realty
Of interest to us is the fact that major real estate player Kimco Realty owns more than 1.3 million shares, or more than half of Blue Ridge.
Conclusion
An interesting combination of real assets, we're just not sure how to value it. We'd like to see the ski operations start generating a profit, and stop the revenue slide. Keep in mind, this issue is very thinly traded, and not liquid.
*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Blue Ridge Real Estate
Ticker: BLRGZ
Price: $38.50
Avg Volume: 200
Shares Out: 2.39 million
Market Cap: $93 million
The Fundamanentals
Total revenues for 2004 were $17.375 million, down from 2003s $18.2 million. Net income was $6.25 million in 2004, which included a gain from discontinued ops of $12.4 million before tax, versus 2003s net loss of $879 thousand. Ski operations generate more than half of company revenue, but has generated an operating loss for the company the past couple of years. Furthermore, ski revenue is on the decline, to $9.74 million in 2004 from $12.3 million in 1998.
Clearly, if there is significant value within Blue Ridge, its not for earnings, or sales growth. If anything, the potential value is in the company's assets. Many value players (ourselves included) sometimes get hung up on the potential value of an asset, ignoring the fact that if value is not being unlocked through current operations, it may never be. We don't know if thats the case with Blue Ridge. We are intrigued by the company's land holdings, and want to be impressed by the ski operations. We're just not sure what it's all worth. How's that for honesty?
Kimco Realty
Of interest to us is the fact that major real estate player Kimco Realty owns more than 1.3 million shares, or more than half of Blue Ridge.
Conclusion
An interesting combination of real assets, we're just not sure how to value it. We'd like to see the ski operations start generating a profit, and stop the revenue slide. Keep in mind, this issue is very thinly traded, and not liquid.
*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Saturday, December 10, 2005
Skiing Anyone? Part I of II
Blue Ridge Real Estate
Ticker: BLRGZ
Price: $38.50
Avg Volume: 200
Shares Out: 2.39 million
Market Cap: $93 miilion
Ever wondered what a ski resort is worth? I never had until I ran across this small pink sheet company a few years ago. Blue Ridge Real Estate is one of the largest landowners in the Pocono Mountain region of Northeastern Pennsylvania, with a total of 19740 acres, 13951 of which are held for investment, and 5124 for development.
Each share of Blue Ridge is actually a unit, representing one share of Blue Ridge, and one share of Big Boulder Corp.
Here is a list od the companies assets:
Big Boulder Corp- Big Boulder ski area, a total of 925 acres including a 175 acre lake, and the Mountain's Edge Restauarant
Jack Frost Mountain Co- Jack Frost ski area, 473 acres, lift capacity of 13200 skiers per hour, lodge with food service, cocktail lounge, ski shop
Real Estate Management
1.Oxbridge Shopping Center-Richmond, Virginia, 14.37 acres, 127801 square feet of retail space, 78 percent occupied
2.Couresy Commons Shopping Center-East Baton Rouge, Louisiana,9.43 acres, 67755 square feet of retail space, 83 percent occupied
3.18689 acres in the Poconos-most of which is leased to hunting clubs
4.Sewage treatment plant,-serving resort housing at Jack Frost
5.Sports Comples at Jack Frost
6.The Stretchmembers only fishing club
7.Northeast Land Co-101 acres. 2 residential properties
Whats it worth?
First of all, land in the Poconos is plentiful, and it has never taken off to the extent that other resort areas have. This land is not, for example, in the same class as St. Joes Corp's land. But we still wonder, what this package of assets is worth.
Just valuing the land on an Enterprise Value/Acres basis gets you about $5000 per acre: $100 million EV/19740 acres. This is far too simple a calculation, but at least gives perspective.
The ski resorts last year generated revenenue of about $10 million, and showed an operating loss. Could the ski resorts be worth one times sales? That includes 1400 acres encompassing ski areas, and all the equipment.
What are the other assets worth? What do the fundamentals look like for Blue Ridge? What major Real Estate company owns a majority of Blue Ridge Shares? We'll try and answer these questions next week when we present part II.
*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Blue Ridge Real Estate
Ticker: BLRGZ
Price: $38.50
Avg Volume: 200
Shares Out: 2.39 million
Market Cap: $93 miilion
Ever wondered what a ski resort is worth? I never had until I ran across this small pink sheet company a few years ago. Blue Ridge Real Estate is one of the largest landowners in the Pocono Mountain region of Northeastern Pennsylvania, with a total of 19740 acres, 13951 of which are held for investment, and 5124 for development.
Each share of Blue Ridge is actually a unit, representing one share of Blue Ridge, and one share of Big Boulder Corp.
Here is a list od the companies assets:
Big Boulder Corp- Big Boulder ski area, a total of 925 acres including a 175 acre lake, and the Mountain's Edge Restauarant
Jack Frost Mountain Co- Jack Frost ski area, 473 acres, lift capacity of 13200 skiers per hour, lodge with food service, cocktail lounge, ski shop
Real Estate Management
1.Oxbridge Shopping Center-Richmond, Virginia, 14.37 acres, 127801 square feet of retail space, 78 percent occupied
2.Couresy Commons Shopping Center-East Baton Rouge, Louisiana,9.43 acres, 67755 square feet of retail space, 83 percent occupied
3.18689 acres in the Poconos-most of which is leased to hunting clubs
4.Sewage treatment plant,-serving resort housing at Jack Frost
5.Sports Comples at Jack Frost
6.The Stretchmembers only fishing club
7.Northeast Land Co-101 acres. 2 residential properties
Whats it worth?
First of all, land in the Poconos is plentiful, and it has never taken off to the extent that other resort areas have. This land is not, for example, in the same class as St. Joes Corp's land. But we still wonder, what this package of assets is worth.
Just valuing the land on an Enterprise Value/Acres basis gets you about $5000 per acre: $100 million EV/19740 acres. This is far too simple a calculation, but at least gives perspective.
The ski resorts last year generated revenenue of about $10 million, and showed an operating loss. Could the ski resorts be worth one times sales? That includes 1400 acres encompassing ski areas, and all the equipment.
What are the other assets worth? What do the fundamentals look like for Blue Ridge? What major Real Estate company owns a majority of Blue Ridge Shares? We'll try and answer these questions next week when we present part II.
*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Thursday, December 08, 2005
Update: Zapata Corp
Ticker:ZAP
Price:$6.31
An interesting announcememt today from Zapata. Seems that the company has decided to sell it's 58 percent stake in Omega Protein (Ticker: OME). This on the heels of the sale of the company's stake in Safety Components (Ticker:SAFY), which put nearly $50 million into company coffers. With Omega's current market cap of $160 million, Zapata's stake is worth about $93 million, although a large stake discount might apply. What we don't know, however, is Zapata's cost basis in the shares. What are the Glazer's (owners of a majority of ZAP) up to? With no operating businesses remaining, what will they do with the cash? As a shareholder, I am getting concerned. Both Omega (+8%) and Zapata (+5%) were up today on the news.
Please see our prior Zapata posts.
*The author has a position in Zapata. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Ticker:ZAP
Price:$6.31
An interesting announcememt today from Zapata. Seems that the company has decided to sell it's 58 percent stake in Omega Protein (Ticker: OME). This on the heels of the sale of the company's stake in Safety Components (Ticker:SAFY), which put nearly $50 million into company coffers. With Omega's current market cap of $160 million, Zapata's stake is worth about $93 million, although a large stake discount might apply. What we don't know, however, is Zapata's cost basis in the shares. What are the Glazer's (owners of a majority of ZAP) up to? With no operating businesses remaining, what will they do with the cash? As a shareholder, I am getting concerned. Both Omega (+8%) and Zapata (+5%) were up today on the news.
Please see our prior Zapata posts.
*The author has a position in Zapata. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Saturday, December 03, 2005
Update: Silverleaf Resorts
Ticker:SVL
Price: $2.89
Mkt Cap: $106.8 million
Avg volume: 103,500
P/E: 4.7
Shares of Silverleaf Resorts have more than doubled since our intial report on June 3rd. At the time, the small timeshare resort company was trading below its NCAV. The run-up in price is very recent, and we can't identify the catalyst. According to a December 1st, Reuters story the compamy was unaware of any reasons for the increase in volume, and stock price movement.
Third Quarter earnings
We might have understood the stock reacting positively to third quarter results, but those were released November 1st, one month ahead of this recent price action. Total revenue was up 30 percent to $62.3 million, net income more than doubled to $12.9 million, and vacation interval sales were up 14 percent. Furthermore, notes payable and capital lease obligations fell more than $50 million since year end 2004. This company appears to be getting its financial house in order.....at least its trying to. Please see our earlier posts (2 part series 6/3/05 and 6/10/05) for more on this company, including the risks.
Our Next Report
Next week we'll publish research on a small pink sheet company which owns two ski resorts, and a nice chunk of land in the northeast.
*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
Ticker:SVL
Price: $2.89
Mkt Cap: $106.8 million
Avg volume: 103,500
P/E: 4.7
Shares of Silverleaf Resorts have more than doubled since our intial report on June 3rd. At the time, the small timeshare resort company was trading below its NCAV. The run-up in price is very recent, and we can't identify the catalyst. According to a December 1st, Reuters story the compamy was unaware of any reasons for the increase in volume, and stock price movement.
Third Quarter earnings
We might have understood the stock reacting positively to third quarter results, but those were released November 1st, one month ahead of this recent price action. Total revenue was up 30 percent to $62.3 million, net income more than doubled to $12.9 million, and vacation interval sales were up 14 percent. Furthermore, notes payable and capital lease obligations fell more than $50 million since year end 2004. This company appears to be getting its financial house in order.....at least its trying to. Please see our earlier posts (2 part series 6/3/05 and 6/10/05) for more on this company, including the risks.
Our Next Report
Next week we'll publish research on a small pink sheet company which owns two ski resorts, and a nice chunk of land in the northeast.
*The author does not have a position in this stock. This is neither a recommendation to buy or sell this security. All information provided believed to be reliable and presented for information purposes only.
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