Friday, April 11, 2008

1 year in DFNS

Well we have been in DFNS for 1 year now.

I bought DFNS on April 9th 2007 at .50 for the StockDoubling project.

I reviewed some of my comments from that original post.

I thought $15-$20 million in revenue was possible for 2007. It looks like they did $19 million. And earnings could be between .03-.10 it looks like .05-.07 (I am not sure until they release their 10k)

This is the first stock that I have been in for the entire year. Which is really what the project is about. Finding 1 stock per year. Of course I don't want to be in that long but that is the way it has gone.

It has been an interesting ride with lots of times I thought a big rally was just around the corner. And a good amount of opportunities for people to buy.

I like it more TODAY than I did back then. I think it offers far less risk and much more reward then it did a year ago. And its 20% off last years prices.

DFNS HIGH for the year was .70 and low was .24

Current trading at .40 or down 20% from our entry.

They should release their 10k report by April 15th. So anytime really (I predict sometime on Monday) that should give us a better idea of the Q4 results and what we have in store for the future.

I am still quite confident in the stock and don't see much downside at all to this stock.

Basically when I bought it a year ago the book value was around .20. NOW its about .43
They lost money last year. This year they made .05-.07 and is 6-8x PE ratio.
Last year the Price to sales ratio was 1.3 now it is .76
Last year the price was .50 NOW .40

All the important stats are MUCH better then they were a year ago. Yet the price is down 20% from last year.

I think if the company comes out with positive news as far as future growth etc.. That this stock will move VERY quickly higher.

If you are NEW to the stockdoubling project or haven't bought DFNS yet you may want to do your research and consider it. I personally would buy some more at these levels if I had additional money in my brokerage account. But don't do it based on me do your own research.

NOW lets talk about the 4 OTHER STOCKS FROM LAST YEAR.

I also mentioned the 4 other stocks that were in the running for the pick in my original post last April 9th.

I will update you on the price action of each.

GLDS (which is now AIRI) THEN .275 NOW .22 DOWN 18% HIGH .42 LOW .18

At its highest point it was up 50%. At its lowest point it was down 36%. I don't really follow this stock they issue a LOT of shares and I don't like stocks like that so I really haven't followed it. They have bought a lot of different companies and say they will be profitable but with so many shares issued all the time its hard to get a good feel for them. They remind me to much of ATSX and that scares me bad so I don't really watch it.

AYSI THEN .67 NOW $1.25 UP 86% HIGH $2.05 LOW .30

At its highest point it was up 205%. At its lowest point it was down 55%. They have had quite a run up and down. They ran down way too much for what they had and they ran UP probably too much as well. But they ran UP and down pretty quick. Now it is somewhere in the middle. A nice stock over the last 18 months though.

TSSW THEN .76 NOW $1.42 UP 87% HIGH $2.44 LOW .72

At its highest point it was up 221%. At its lowest point it was down 5%. This is by far the best stock of the 5 total. It went UP just a few days after I talked about it. And didn't look back. It had a very nice run and came back down some but was never really under water much at all. They recently announced they are being bought out for $1.48 per share.

CAGC THEN $2.90 NOW $2.50 DOWN 14% HIGH $6.25 LOW $1.78

At its highest point it was up 116%. At its lowest point it was down 39%. This is a china stock which were hot for a while. They make good money but china can be a bit scary as far as reporting etc.. It had a nice run up and they announced they should earn good money. It is probably a little undervalued at these levels but I don't like the China stocks as a whole right now so I will stay away.

3 of the 5 stocks doubled in value.
Had you bought $1000 worth of each of the 5 stocks and held them until they doubled and then sold you would have $6000 right now and still own $820 worth of AIRI and $800 worth of DFNS. (As those 2 stocks haven't doubled yet.)

So the total value of your portfolio would be $7620 or a 52% return for the year. NOT TOO BAD.
(Obviously that is just an example and you can work your own #'s based on your own portfolio size.)

It has been an interesting year.

I will update you again when DFNS comes out with their 10k report which should be within the next couple of days.


Thank you
Steve Hoven

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