Institutional Analyst, Special Situation Review, Sunday 3/15/2009.
Chicago 38...54F Snow Flurries.
Los Angeles 50...63F Sunny.
Vasco Data (VDSI) $4.67 to Special Situation Review
2. Let the Currency Wars
3. Let the St. Patrick's Month Begin.
4. Yes We Can.
Value at Risk.
6. You at Risk.
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Contact us: firstname.lastname@example.org
Data (VDSI) $4.67 to SSR
This is our second "special situation" stock
idea, since we've decided to
cover any and all types of stocks, now that (and
because) the broader
market averages are down 50%. The first was Inventure
(SNAK) at $1.07.
We'll have all sorts of interesting companies and try to
keep the penny
stocks to a minimum and limited to the truly interesting.
ideas to be trading ideas and coverage to be light and to
while the stocks are going up. We have a site to host the
additional information on the companies.
Visit it here:
Oh and by
the way, feed us your ideas. Everything will be considered, but
we need a
short story -- not just a name and symbol.
A friend of
ours (a stockboker) who live a few blocks away from us finally
palatial estate about a year ago, after it had been on the market
some time. It's not your everyday house. In fact it's something
of a famous
house and for fans of Frank Lloyd Wright, a very "important"
and much sought
after house (though how a house could ever be important,
is beyond our
comprehension -- but that's what they say).http://www.flickr.com/photos/alui0000/1982919564/in/photostream/
He mentioned to us that the buyer "ran" a publicly traded company
Vasco Data (VDSI), which was based in a neighboring town. It's a name
had never heard of, so we decided to start digging. We didn't catch
name of the buyer, so we looked into the insider holding roster
decided to make the assumption that it would be the executive who held
most shares, which turned out to be the CEO (this is of course all
When he bought the home a year back or so -- the
shares of his company are
trading at $14 (roughly). A quick check with the
insider holdings roster
shows he controls 8 million shares. So while he may
not be Silicon Valley
rich, $112 million is nothing to sneeze it. This made
us decide to take a
look at what made him so much money, noting that the
company traded as
high as $45 in late 2007, making his stake worth $360
million and the
company worth $1.6 billion.
While we have never heard
of it and while we would venture to guess 99.9%
of all asset gathering
stockbrokers wouldn't have a clue about who they
are, it was an institutional
darling. What created the billion dollar plus
valuation was rapid, rapid
growth with sales growing from $52 million
(05), $76 million (06), $119
million (07) and then $133 million (08).
What initially cratered the
shares in our opinion, is knowledge by its
current "fast-money" shareholders
that most of Vasco's customers, are in
the banking industry (82%). What
knocked it to its recent low was a down
4th quarter and the simple statement
from management that it would
"...temporarily stop providing an annual
outlook due to the uncertainty
created by the continued turmoil in the
economy, but that it expected 2009
to be a profitable year." (Well that's
While revenues were only down 7%, fast money doesn't pay
near 100 times
earnings for "okay" results, as they did in 2007. Earnings
were $0.55 in
2007 and $0.64 in 2008, meaning the pendulum has swung from
undervalued and Vasco Data now trades at 7X last years earnings
also have $57 million in the bank and a market value of $63 million.
Seeking Alpha is so generous to provide a transcript from
(No guidance for 2009: For
the full year 2008, Vasco won 1,827 new
customers -- 249 banks and 1,578
enterprise security customers. The
company, competes with EMC (EMC) unit RSA
Security and ActivIdentity
VASCO Data Security International
1901 South Meyers Road
Oakbrook Terrace, IL
Web Site: http://www.vasco.com/
Shares Out: 37 million
Market Value: $173 million
Sales $133 million
(Public since 1998)
So what do they do ? In
all honesty, it's not very exciting (or
interesting for that matter). They're
one of the leaders in strong
authentication and e-signature solutions and
services specializing in
Internet Security applications and transactions.
Their prime markets are
the financial sector, enterprise security, e-commerce
and e-government. We
spent all of 17 seconds on their website.
here's the investment thesis. The stock has traded down almost every
day until March 9th. Second it's in the banking sector, which has
almost every single day until March 9th. So there you go. No
need to over
complicate these things. It could be a dead bank bounce, or
the bargain of
Let the Currency Wars Begin.
Just when every other country appears to
be racing to devalue its
currency, the poor Japanese yen just can’t stop
strengthening. Its rise
against the euro Monday was accompanied by a splurge
of bad news,
including Sony’s likely first operating loss in 14 years and
first in seven years. Furthermore, Japanese bankruptcies were up 24
cent in the year to the December. The Nikkei resoponded by declining
than 4 per cent.
All in all, the yen’s recent major ascent will
undoubtedly be troubling
the authorities. So the big question is, just how
will they respond? Many
are expecting only one thing, that Japan too will be
forced to join the
devaluation bandwagon. The strong yen is already having a
effect on the economy- exporters like Sony and Toshiba being hit a
Let the St. Patrick's Month Begin.
In Chicago, we are already two weeks
into St. Patrick's month, which
started the 7th of March with the first
parade in Forest Park.
Yesterday was the Chicago parade and the South
Side Irish parade -- and
bring it on. We're not only participating, we're
picking up steam. Sunday
and Monday are the Official days-O'-rest.http://chicago.metromix.com/home/photogallery/south-side-irish-para...
of these 25 bars opened at 8AM yesterday, so people could have
(yeah right) and then take a bus to the parade:http://chicago.metromix.com/bars-and-clubs/article/get-on-the-bus/9...
More Parties (so literally, you can't go to them all).http://chicago.metromix.com/bars-and-clubs/roundup/st-patricks-day-...
So many parties, you not only can't go to all of them, you can't
about all of them. One we'll avoid for sure is Trump Hotel &
brilliantly shows its out-of-towner status, offering up $36
platters" which is black cod tempura rolls and salmon and tuna rolls.
Keep in mind many parties start at 8AM and end at 1:30. Most
are home before sun-down and with the weather predicted to
reach into the
70's, it could get very ugly out there.
Chicago Patty Wagon: http://www.flickr.com/photos/36293705@N00/111699983
Yes We Can.
Making St Patrick's Day a national holiday.http://www.proposition317.com/Home.aspx
more and more like they can't. This is really maddening.
They only got
435,000 signatures out of 1 million needed. They being
Guinness. They being
Diageo (DEO) with $12 billion in sales and additional
brands like Smirnoff,
Bailey's, Bushmills, Cuervo, Ketel One, J&B, Captain
Walker and Tanqueray...
How much money do they spend on advertising every
year...and the can't
muster a million signatures ?
What is this
country (the UK actually) coming to.
Which is a great stock, by the
The Value at Risk.
We came across a new market related blog which is
short, very well written
and easy to understand... and free of big words like
concepts like "...statistically significant positive
Don't visit the site if you prefer reading bullish commentary,
aid in the implementation of your current investment strategy. We
read only that, which we know in advance agrees with our current
and we are mostly in agreement with the blog.
As an example he
suggests investors not to expect a V-shaped rebound in
"...there are several Countries that face a legitimate, imminent
collapse. We have seen this scenario unfold in Iceland, a
insignificant country that in this situation merely serves as a
for what is to come. The next leg down in the global economy will
conjunction with the collapse of one of the Countries that is
risk of collapse.We refer specifically to Hungary, Latvia,
and Spain. We fully expect that two of the listed Countries
on its sovereign debt and descend into a period of relative
chaos. We are
quite sure that the aforementioned issues are inevitable in
will serve as a catalyst for a renewed sense of panic with
respect to the
state of the global economy."
(We think we'll have a
near-V rebound and then head lower -- which is
almost getting to be a "too
popular" theory these days.)
About Chinese Premier Wen Jiabo who publicly
stated he may cut back on our
"...we suspect that the
Premier's comments are the first stage of a
thoroughly calculated plan with
regards to the unfolding global Situation.
Secondly, the United States
Government will continue to spend money as
quickly as possible...and the
capital levels of Major Institutions, and in
our best estimation can say that
the US Banking Industry requires a
minimum of an additional One Trillion
Dollars to bring back some degree of
solvency. In other words "We ain't seen
nothin ye.t. We assume that
history (of human civilization) will repeat
itself, and the Debtor nation
will ultimately choose to debase its currency
as a means of managing its
(We're in the US dollar
getting debased camp, we're just not too sure
"when" and "what" to do about
it to about it. Though we are nonetheless
sure we "will" figure it out in
time and it will make us more money than
any other wave we've ever
About Greenspan trying to preserve his legacy:
Greenspan doesn't seem to understand, however, is that no amount
writing and speech making will ever be able to restore his
of all, the Proles tend to seek a simplified set of
causes for every major
event such as the Crisis of today. Greenspan's
explanation involves events in
far away lands that will be difficult for
the workingman to fathom. Secondly,
every Crisis must have a scapegoat,
and once that scapegoat is identified, it
is impossible to reverse course.
Mr. Greenspan, being a retired and elderly
man, was an easy target for
(We're in the camp that
the only way you can really solve problems (aka
spending like drunk sailors)
that were decades in the making, is to stop
trying to prolong the agony and
instead allow enough time for the excesses
and imbalances to work themselves
6. You at Risk.
Are you at risk ?
Very cool website showing
crime in your area, just pop in your zip code.http://www.crimereports.com/
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"intend," "mean," and similar words, is forward-looking, and
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companies listed on the OTC Bulletin Board (and
many on NASDAQ) have going
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