A Tiny Gem - DAGM
Mentioned in the last post that I have 2 exciting stock ideas to do further research and share with you. One of them is DAGM - DAG Media. It is a micro-cap $5.7 million company, which is by far the smallest one I have ever interested in. (Interested to know if you ever bought something smaller than this, and share with us the experience)
It is in Yellow Page/Publish Directory business, specializing in Jewish community, and recently sold a few of their businesses and moved their focus to online. Revenue ranged from 4.5 to 6million, with about 0.5 million to 1 million operating loss in the last 2 years.
Very simple investment theory.
1. The company has $ 7million cash with no debt, yes 7 million cash! its other assets and liability are pretty much equal. In other words, if the company is liquidated today, its face value is 20% higher than the stock price!
2. Better yet, that evaluation hasn't included their new online product - http://www.nextyellow.com. The website where buyers submit their interest online, and the website will provide registered sellers the information, and let sellers contact the buyers - the website makes profit from the referral. Hard to judge this new product - only a few months old. In my opinion, it is an so-so idea in a very tough business (think of competing with Google), and honestly not having a high chance to be successful, but, consider the stock price, it is almost a gift! They also acquired a online shopping site http://www.shopila.com - a less significant and neglicable business line. But no complaint as a gift.
3. Last but not the least, I read their previous SEC filing, visited their website and checked their financials, and my gut feeling tells me I am dealing with an honest and hard-working group of people there. Look, when investing in a micro-cap company, people is the most important part that we need to rely on.
With over 10% price jump, and closed at $1.76 today, it is still a bargain. I recommend it with caution as micro-cap stocks are usually volatile. I bought a small hand today at $1.72.
It is in Yellow Page/Publish Directory business, specializing in Jewish community, and recently sold a few of their businesses and moved their focus to online. Revenue ranged from 4.5 to 6million, with about 0.5 million to 1 million operating loss in the last 2 years.
Very simple investment theory.
1. The company has $ 7million cash with no debt, yes 7 million cash! its other assets and liability are pretty much equal. In other words, if the company is liquidated today, its face value is 20% higher than the stock price!
2. Better yet, that evaluation hasn't included their new online product - http://www.nextyellow.com. The website where buyers submit their interest online, and the website will provide registered sellers the information, and let sellers contact the buyers - the website makes profit from the referral. Hard to judge this new product - only a few months old. In my opinion, it is an so-so idea in a very tough business (think of competing with Google), and honestly not having a high chance to be successful, but, consider the stock price, it is almost a gift! They also acquired a online shopping site http://www.shopila.com - a less significant and neglicable business line. But no complaint as a gift.
3. Last but not the least, I read their previous SEC filing, visited their website and checked their financials, and my gut feeling tells me I am dealing with an honest and hard-working group of people there. Look, when investing in a micro-cap company, people is the most important part that we need to rely on.
With over 10% price jump, and closed at $1.76 today, it is still a bargain. I recommend it with caution as micro-cap stocks are usually volatile. I bought a small hand today at $1.72.
posted by Siyu LI at
9:15 PM
4 Comments:
Do you monitor "Biggest Gainers" lists on MSN/Yahoo to discover your trade ideas? Or in other words, how did you discover stocks like this and other picks of yours?
Sam
By
Anonymous, at November 28, 2006 2:24 AM
Sam:
I am more interested in "biggest loser" than "biggest gainer". But I don't check either list.
For this one, I find it randomly online. How to discover stock itself is a big topic - One of my source is to pay attention to the companies around you. Before you buy the stock, get familiar with their services, products, people, and feel comfortable with them. One of my pick ANF is an example.
By
Siyu LI, at November 28, 2006 10:44 PM
Actually, the website for their new online business is http://www.nextyellow.com. Their other new business, an acquisition, is http://www.shopila.com.
By
Anonymous, at November 30, 2006 12:20 PM
I corrected the website address, thanks for pointing it out! I also added shopila.com business, though in my opinion, it is a less significant, and neglicable business, included to give a complete picture.
By
Siyu LI, at November 30, 2006 9:59 PM
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