October 3, 2003 Bentley Pharmaceuticals, Inc. (BNT)`
TGIF. No, not the restaurant silly. FRIDAY. I am ready for a weekend...and what a GREAT close to the week. The Feds report that 57,000 new jobs are created and the market EXPLODES. IMHO, there must be a lot of pent-up buying demand out there...maybe some of those Billions of dollars sitting in money market accounts paying less than 1% are moving into the market!

Anyhow, actually NOT too many of our kind of stocks on the lists of biggest movers. I guess in a BIG rally, there is INDISCRIMINATE buying of stocks....just go into that retail joint and buy some stocks....ANYTHING. (Am I shouting too much?)
Bentley (BNT), on the AMEX, does pretty much fit into our scheme but not perfectly. But I am lately willing to overlook a blemish or two on an otherwise drop-dead gorgeous investment.

BNT is having a nice day...trading at $15.69 as I write, up $.71 or 4.74%. According to money.cnn.com, BNT "...is engaged in the manufacturing, marketing and distribution of pharmaceutical products in Spain, with limited product distribution in the U.S."

On July 30, 2003, per PRNewswire-FirstCall as reported on NYTimes on the web, Bentley reported their second quarter results for the period ended June 30, 2003. Total revenues were up 38% when adjusted for exchange rates to $16.8 million compared to $9.9 million last year (70% when not adjusting exchange rates). Net income for the 2003 second quarter grew to $1.5 million or $.07/diluted share compared to $519,000 or $.03/diluted share last year. Approximately $500,000 (or a third) of the net income this year was favorably impacted by exchange rates...but still would be up nearly 100%...$1 million vs. $.5 million last year.

Morningstar.com shows a fairly steady improvement over the last 5 years...although further out the company had been shrinking its revenue...revenue increased from $15.2 million in 1998, $20.2 million in 1999, dipped to $18.6 million in 2000, back up to $26.4 million in 2001, $39.1 million in 2002, and extrapolating the current quarter would get us to over $60 million in 2003.

The company turned profitable in 2001 and has been improving the profit picture since then. Free cash flow is still negative, although a small figure at best: ($4) million in 2000, ($1) million in 2001, ($2) million in 2002, and ($1) million in trailing twelve months.

Assets and liabilities look good with $25.3 million in cash reported per Morningstar.com, more than enough to cover both the current liabilities of $19.7 million and the $2.8 million in long-term liabilities. In addition, BNT has $24.2 million in other current assets.

Market cap, per Yahoo.com, is a small $278.18 million. The trailing p/e is a bit steep at 74.90, but the company is JUST turning profitable and the PEG ratio is low at 0.80. The price/sales is also a bit steep at 5.13. There are 17.76 million shares outstanding with 17.10 million of them that float. There are 1.07 million shares out short as of 9/8/03, representing 7.4 days of trading or 6.28% of the float. If the stock continues strong, this may result (?) in a short squeeze.

In 1995 the company had a reverse split of 1:10. Clearly their fortunes have been improving recently!

I do like this stock. It is small enough to continue its remarkable growth and the revenue picture is nice. I would like to see the cash flow a little positive....and I am a little leary at its 'prior life' when the company was doing so poorly it needed to implement a reverse split.

I do not own any shares of this company, nor am I planning to jump right in but if you are interested, this might be a good one for you!

If you have any questions, comments, or words of encouragement, please let me know at bobsadviceforstocks@lycos.com

Bob

October 2, 2003 UTStarcom, Inc. (UTSI)
Here is a stock that I like a lot...although the numbers are not perfect. This company is an American firm that is run by Chinese-Americans who apparently culturally and language-wise understand the China market better than some traditional American telecom firms. I hope I said that better than Rush Limbaugh who lost his job recently on ESPN due to a racial remark. But seriously, these guys really seem to get it. I have owned shares of UTSI sometime in the past but do not own any shares at this time.

UTSI is having a GREAT day today trading at $35.23, up $3.32 on the day or 10.40% as it announces again renewed optimism about 2003 results.

According to money.cnn.com, UTSI "...provides communications equipment for service providers that operate wireless and wireline networks in rapidly growing communications markets." Most of their contracts are in China, but they have been looking outside this region as well.

On July 17, 2003, UTSI announced their second quarter results for the quarter ended June 30, 2003, per PRNewswire-FirstCall as reported on Yahoo: Net sales grew 23% sequentially to $330.5 million from the PREVIOUS quarter and year-over-year increased 75% over the $231.5 million in net sales in the second quarter of 2002. (these numbers are pretty incredible!) Net income for the second quarter increased 53% year over year to $39.4 million or $.33/share compared to net income of $25.7 million or $.22/share for the second quarter of 2002.

Morningstar.com shows a rapid growth in revenue from $100 million in 1998, $200 million in 1999, $400 million in 2000, $600 million in 2001, $1.0 billion in 2002, and $1.3 billion in the trailing twelve months.

The hiccup is the free cash flow which as been positive and improving from ($66) million in 2000, $10 million in 2001, $82 million in 2002, and here is the hiccup: ($160) million in trailing twelve months. I am not sure how significant this change is but should be noted and considered.

Assets and liabilities are adequately balanced with $281.3 million in cash and $1.6 billion in other current assets with $1.1 billion in current liabilities and $402 million in long-term liabilities.

Looking at Yahoo.com, we find that the trailing p/e is in my opinion, very reasonable at 17.06, resulting in a PEG ratio of 0.88. The price/sales a little high at 2.52. There are currently 102.9 million shares outstanding and 73.50 million of them float. There are 9.69 million shares out short as of 9/8/03 representing 2.238 trading days or 13.18% of the float.

As you may note, I like this stock a lot and would like to have it in my portfolio...you know the margin question...I am a bit concerned about the recent turn to the negative in free cash flow and would watch that closely. However, with the fabulous growth and past history of nice cash flow, this does not concern me much. As of yesterday, the company was raising already aggressive 3rd quarter and year results. There is a lot of work to do in China, and UTSI appears to be an important player.

Bob

October 1, 2003 TASER International, Inc. (TASR)
O.K. sports-fans, the bulls are running (Does it sound like Pamplona?). The Dow is up about 130 or so points and the NASDAQ up 30 or so. I have a Buck Rogers stock for you...or is it more like a stock out of a Tom Clancey novel? Anyhow, take a look at TASER International (TASR). This stock has had a couple of hiccups in the last five years but it is doing quite well overall....currently, as I write TASR is trading at $29.25 up $2.97 or 11.30% on the day.

According to money.cnn.com, TASR "...develops, assembles and markets less-lethal, conducted energy weapons primarily for use in the law enforcement and corrections market." Now is this a COOL stock or what?

On July 21, 2003, TASR reported results for the second quarter of 2003, for the period ending June 30, 2003. The results were not shocking (yuck yuck), but they generated some punch: Net sales were $4.2 million a 53% increase over the $2.7 million reported in the second quarter of 2002. Net income increased 330% to $347,000 as compared to $81,000 reported last year.

Morningstar.com shows a rapid increase in revenue from nil in 1998, $2 million in 1999, $3 million in 2000, $7 million in 2001, $10 million in 2002 and extrapolating the current quarter should get us somewhere north of $16 million for 2003.

Unfortunately, free cash flow has NOT turned positive with $0 in 2000, and ($1) million in 2001 and 2002.

This small company has a clean balance sheet per Morningstar with $2.8 million in cash, more than enough to cover the $1.4 million in current liabilities and $100,000 in long-term debt. In addition, Morningstar reports $4.0 million in other current assets.

This is NOT a cheap stock. As the company is just becoming profitable, the p/e is steep at 61.1, the PEG ratio is at 2.24 and price/sales is 6.04. The market cap of this Micro-cap company is only $81.65 million. There are only 2.84 million shares outstanding and 2.00 million of them that float. Of the float there are 944,000 shares out short as of 8/8/03 representing 47.20% of the float (!) or 6.695 trading days. This is a set-up for a short-squeeze and we may be witnessing this in motion today.
No dividend is paid.

If you are looking for a fast-growing, yet profitable company, this may be it for you. If I wasn't back up to my ears in margin (lol), then I might be buying a few shares as well. So zap your portfolio with this stock...."Ka-POWWW"...as they would say in those old Batman T.V. shows....

Bob

P.S. I edited this post on 10/4/03, corrected title which read September 1, 2003...(oops) Nothing else changed.

October 1, 2003 "Trading Transparency" ANN
With the market up nicely out of the gate, I defied my normal October anxiety and purchased 200 of ANN at the market this morning. We reviewed ANN yesterday and AnnTaylor has consistent revenue growth, PEG of 1.0, price/sales under 1.0, p/e under 20 and same store sales growth in 8% range last month. Looked good to me and I made the plunge! Will look for picks later today.

Bob

September 30, 2003 AnnTaylor Stores Corp. (ANN)
I was away from the computer and thus the market for most of the day. This afternoon, looking through the tables, I did not think I would find any new stocks to post...but like most days, if I look carefully enough, I usually can fine one new one. Today I noticed AnnTaylor Stores (ANN). I do not own any shares of ANN but did like what I saw today. ANN closed today at $32.14, up $1.15 or 3.71%.

According to Money.cnn.com, AnnTaylor Stores "..is a specialty retailer of women's apparel, shoes and accessories."

About a month ago, on August 13, 2003, per PRNewswire as reported on NYTimes on the Web, ANN reported their second quarter, 2003, results for the period ending August 2, 2003. Total net sales for the quarter were $390 million up 13.7% from $343 million last year. Comparable store sales for the quarter increased 5.3% compared to a (0.2%) decrease for comparable store sales in the same quarter of 2002. Net income for the quarter was $21.2 million or $.45/diluted share vs. $18.2 million or $.39/diluted share in the second quarter of fiscal 2002.

One of my key indicators for retail stocks is the so called same store sales figure. This number reports the sales results for stores or retail outlets open at least a year. This is important because this gives you a more accurate picture on the sustainability of revenue growth, that is, whether the sales growth is due to just opening more NEW stores or whether the old stores (open at least a year) are showing gains when compared to their prior year sales. Anyhow, looking through the news we find the latest results on ANN, reported on 9/4/03, through PRNewswire-FirstCall on NYTimes on the Web: same store sales for the four wee period ended 8/30/03 increase 18.0%, while comparable store sales were up a solid 8.2% (even better than the results reported above for the preceding second quarter!).

Reviewing the tables in Morningstar.com, we find that revenue growth has been steady the past 5 years from $.9 Billion in 1999, $1.1 billion in 2000, $1.2 billion in 2001, $1.3 billion in 2002, and $1.38 billion in 2003.

Free cash flow has improved recently from ($6) million in 2001, ($5) million in 2002 and $114 million in 2003 with $74 million in the trailing twelve months.

ANN, per Morningstar.com, has $188.3 million in cash and $270.8 million in other current assets easily covering both the $141.2 million in current liabilities and $148.6 million in long-term liabilities combined.

Ann Taylor has a market cap of $1.45 Billion. the trailing p/e is reasonable at 18.02. The PEG ratio is right at 1.00, and the price/sales is also reasonable at 0.97. There are 45.09 million shares outstanding and 44.60 million of them that float. 2.14 million of shares are out short representing 2.444 days of trading. No dividend is paid. the last stock split was a 3 for 2 split on 5/21/02.

I do like this stock a lot. This company has a steady track record with a lot of GARP. (Growth at a reasonable price). Recently, their same store sales figures have been strong and this often precedes a nice price appreciation (vis a vis URBN). The p/e is under 20, the PEG ratio is right at 1.0 and the price/sales is under 1.0. The assets outweight the liabilities. What is there NOT to like. If I just had a little cash, this would be where I would put it to work!

Thanks for stopping by!

Bob

September 29, 2003 SFBC International, Inc. (SFCC)
Hello friends! Thanks again for stopping by. I hope that some of my thoughts are contagious (and not the cold I am fighting off)....and that all of our understanding of investing improves. Anyhow, today was not a day for our kind of investing...our trading portfolio was flat on the day while the market moved ahead....and there weren't too many of our kind of stocks on the highest %-gainers list. This evening, scanning the NASDAQ again, I came across SFBC International (SFCC). I do not own any shares and in fact have not heard of this stock before today.

According to money.cnn.com, SFCC "...is a contract research organizatin that conducts clinical trials and provides related services to pharmaceutical and biotechnology companies and other contract research organizations." SFCC had a GREAT day today, closing at $30.25 up $3.35 or 12.45% on the day.

On August 4, 2003, per BUSINESS WIRE, as reported on the NYTimes on the Web, SFBC International reported their second quarter results for the quarter ended June 30, 2003. Revenue for the second quarter was $22.5 million an increase of 53% compared to $14.7 million in the prior year. Net earnings for the quarter increased 49% to $2.0 million compared to $1.36 million for 2002. Per diluted share, this came in at $.27, a 50% increase over the $.18 reported in the same quarter last year.

Morningstar.com shows SFCC with steady growth from $5.9 million in revenue in 1998, $8.3 million in revenue in 1999, $19.7 million in 2000, $31.5 million in 2001, $64.7 million in 2002, and extrapolating the current quarter would get us over $80 million in revenue for 2003.

Free cash flow, while unexciting, has been improving with ($1) million reported in 2000, $1 million in 2001, and $0 million in 2002. The assets/liabilities reported in Morningstar shows $8.8 million in cash and $26.6 million in other current assets, easily covering the $14.6 million in current liabilities and $2.8 million in long-term liabilities.

SFCC is a small company with a market cap of $234.92 million. The trailing p/e is reasonable at 22.23, the PEG ratio is cheap at .71, and the price/sales is moderate at 2.56. There are only 7.77 million shares outstanding ant only 6.00 million of them that float. There are 351,000 shares out short, representing 5.85% of the float or 1.773 trading days.

There are a lot of things I like about this stock. We have had good luck with small cap stocks like this with reasonable valuation (low p/e), good balance sheet, steady revenue growth, and low # of shares that float. If I find some cash tomorrow, I might consider picking up some shares. If so, they will show up in the trading account. I would prefer to make sure the correction is over before adding to our equity positions.

Regards to all of my friends!

Bob

"How are we doing?" A look back on the week of August 11, 2003
This past week that we have had has been a tumultuous one for our stocks. We have backed off of our gains in our trading account to about the level of a month ago and are nearly at 8% stops for two more stocks in the account. I hope that you too are stopping out of stocks as losses develop. Save your cash for a better market run.

It helps sometime to look back at our earlier picks to see how they are doing...help us evaluate this whole process and see what it is that seems to propel a stock higher and when is a stock TOO high already!

During the week of August 11, 2003, we had only three selections on this website: Possis Medical (POSS), Techne Corp (TECH), and Tyler Technologies (TYL).

POSS was selected on 8/11/03 at the price of $17.33. As of the close of business on Friday, 9/26/03, POSS was trading at $15.80. This is a loss of ($1.53) or (8.9%).

On August 12, 2003, we selected Techne Corporation (TECH) for Bob's Advice at $32.08. TECH closed Friday, 9/26/03, at $31.93 for a loss of ($.15) or a loss of (.5%).

The final suggestion was Tyler Technologies (TYL) at $5.75. On 9/26/03, TYL closed at $7.00 for a gain of $1.25 or a gain of 21.7%.

The average of this (8.9%), (.5%), and 21.7% is a gain of 4.1% over this approximately 6 week period. Fortunately, the outstanding performance in TYL balanced out the losses in the other two stocks.

I hope that this discussion is helpful to you in thinking about investment ideas. If you have any questions or comments, please feel free to email me at bobsadviceforstocks@lycos.com or leave your messages here on the website by clicking on the "comments" or "no comments" link under each posting!

Have a great weekend and come back and visit again!

Bob

September 26, 2003 Cherokee Inc. (CHKE)
What does it all mean that in a sloppy market we are finding more of our kind of stocks? I am not sure but I suspect it means that the internal correction of this market is ending and investors are stepping back in to purchase stocks with potential...hmmm? Anyhow, this one isn't what I would call politically correct....anymore than a Pontiac car...but Cherokee Inc. (CHKE) is having a nice day and meets most of our criteria. I do not own any shares of this stock either.

CHKE is currently trading at $20.90 up $.90 or 4.92% on the day. According to money.cnn.com, Cherokeee "...is in the business of marketing & licensing the Cherokee and Sideout brands and related trademarks and other brands it owns." They are an apparel firm.

On September 10, 2003, Cherokee, according to BUSINESS WIRE as reported on the NYTimes on the Web, announced their record second quarter sales and earnings for the quarter ended August 2, 2003. (Now why can't companies have some REGULAR reporting period...is that too much to ask?) Net revenues rose 15% to $9.9 million compared to $8.6 million in the second quarter of 2003. (Here we are in the second quarter of 2004 and it is only September, 2003...this is kind of like deja vu all over again.)..Net earnings for the three months increased to $3.7 million or $.43/diluted share compared to $3.3 million or $.38/diluted share in the second quarter last year.

Morningstar.com shows a nice, steady picture of revenue growth from $19.3 million in 1999, $24.7 million in 2000, $28.3 million in 2001, $30.7 million in 2002 and $33.1 million in 2003.

Free cash flow has been steady at $14 million in 2001, (results for 2002 are not included on Morningstar), $12 million in 2003.

Assets/liabilities look pretty nice as well with $1.2 million in cash and $19.1 million in other current assets vs. $15.4 million in current liabilities and NO long-term debt reported.

As I am writing CHKE has gone to unchanged...lol...but the numbers look nice so let's continue. The market cap is $164.76 million and the trailing p/e is nice at 12.37. Price/sales a little steep at 4.70. There are only 8.27 million shares outstanding and 3.20 million of them float. 14,000 shares are sold short as of 8/8/03....representing 0.44% of the float.

This looks like an interesting low-tech stock pick for me with steady growth, nice balance sheet, low p/e, and free cash flow positive. The small # of shares outstanding and low volume (only 14,422 shares traded today)...makes the volatility high...went from up nicely to unchanged in minutes lol. If you would like something different, try out this stock...the changing room is right over there...:). Bob

September 26, 2003 Abaxis, Inc. (ABAX)
Sometimes I wonder what is the point of all of this buying and selling....what makes our approach here any different than Malkiel's (the author of Random Walk down Wall Street), is that I don't think that stock prices over the long term are random. I do think that underlying fundamentals of a stock are what determine its ultimate value. Anyhow, enough philosophizing....I just wanted to share with you some of my thoughts.

Abaxis, Inc. made the list today. This is a small company that may have a lot of room to grow. Although up stronger earlier today, it is still currently trading at $13.40, up $.39 on the day or 3.01%.

According to money.cnn.com, Abaxis (ABAX) "...develops, manufactures and markets portable blood analysis systems for use in any patient-care setting to provide clinicians with rapid blood constituent measurements." By the way, I do not own any shares of this company.

On July 31, 2003, ABAX reported results for their first quarter 2004 period ending June 30, 2003. Their quarterly revenue was $10.3 million, a 39% increase over the same period last year. Diluted earnings per share were $.04 vs a loss of $(.02) last year.

Morningstar.com shows revenue of $13.3 million in 1999, $23.4 million in 2000, $29.8 million in 2001, $30.6 million in 2002, and $34.8 million in 2003. Extrapolating the current quarter revenue (without any sequential growth) would get us to $40 million for 2004.

Free cash flow has improved from $(9.0) million in 2001, to $2 million in 2002 and 2003.

The company has an excellent balance sheet per Morningstar.com with $10.4 million in cash and $13.1 million in other current assets. This is balanced against $5.7 million in current liabilities and $7.5 million in long-term debt.

This is a small cap stock with a market cap of $231.5 million. The trailing p/e is enormous (since the company JUST turned profitable) at 162.61. Price/sales also high at 5.74. There are 17.21 million shares outstanding and 16.7 million that float. Only 109,000 shares are out short as of 8/8/03. No dividend is paid.

This is a very nice stock and might deserve a place in your stable. (I always think of stocks as sort of race horses....occasionally they break a leg and out they go.) The stock isn't cheap but it isn't easy to find these small fast growing firms with clean balance sheets. (imho).

Thanks for stopping by again. Please feel free to drop me a line at bobsadviceforstocks@lycos.com if you have any comments or questions or leave them right here!

Bob

September 26, 2003 "Trading Transparency" - BONZ
Our stocks are taking a bit of a beating today and it makes sense in the correction because they have been the strongest up to this point. Unfortunately, I have now parted with BONZ (Interpore Int'l) as it dropped down to $15.90 where I sold it with a little over a 9% loss. We are cutting our margin levels in the face of this correction and we will refrain, hopefully, from buying more issues until we see a bit more positive market direction. Other stocks in our trading account that are near our 8% stop are MMSI and TTWO, both great companies...recently purchased....that haven't built a big enough "head of steam"...to avoid being sold in a downdraft. More later....

Bob