I was expecting Fortune Brands to sink below $60. There should be a big margin of safety below $60. I did a discounted cash flow analysis last year when the stock was in the 80's that had the stock at $50-$60 a share really cheap. I guess word on my article spread pretty fast huh? This isn't the best pure housing turnaround play. It is a good one though. I have some small caps that should do that pure housing exposure trick. Fortune Brands calls, leaps and stock in the $60's and $50's is just a great holding to have and growing dividend generator.

Don't miss This post on Footstar at Off the Beaten Path either.


full disclosure:long FO
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A hidden gem is a small company with good fundamentals and a lot of potential. They also can not have the best fundamentals but a good outlook and a severe undervaluation. Tons of analysts haven't started following the stock yet. If a company has a good profitable business but sells for less than its discounted future earnings and cash flows or less than its liquid or tangible assets I'm interested.

Adams Golf Inc. (ADGF) makes golf clubs. They just moved to the Nasdaq last month. They are a $53 million dollar company that turned around and became profitable in 2003. They have tangible assets per share of $9.84 and a current price of only $8.60. That's interesting. These next points are fascinating. Over the last five years they grew revenues at a 20% compound average growth rate and have consistent profitability. They have a good balance sheet and zero long-term debt. They generate double digit return on equity and assets without using leverage. Management is consistently growing shareholder equity year over year.
Their five year gross margins average 45%. Right now the stock has a PE of 6 (TTM). It was up 900% in 5 years and it still looks cheap. I suspect a lot of retires will be playing golf as well.

Boss Holdings (BSHI.ob) sells gloves, boots, rainwear products and pet supplies. They've been in business since 1893. That is the impressive stock price chart below. The stock was up 800% in about 3 years. This isn't the best business, though they are profitable. The play is the stock sells for 76% of its liquid current assets less total liabilities. That doesn't seem justifiable given the companies very strong balance sheet and cash flow and earnings power.


You can find gems anywhere. Talk about hidden. Both of these stocks had their big runs on the less traveled Over the Counter exchanges. That is where you are told not to invest. Go figure.












full disclosure: no position in BSHI,ADGF.
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The newest trend in data storage.

I estimate SED International Holdings (SECX.PK) has $4.49 per share in net current assets. The stock trades for only $1.50.

Spherix SPEX has a net current asset value of $1.15. The stock last traded for $1.12.
On August 15, 2007, the Company sold the InfoSpherix subsidiary.
The InfoSpherix segment comprised the majority of the Company’s operations prior to the sale. The sale will allow Spherix to focus substantially all of its efforts on the BioSpherix Division’s biotechnology products, with the principal focus on the commercialization of Naturlose.

SPEX has a nice balance sheet as of the end of September of 2007. They have $19 million in current assets(most liquid assets) with $18 million of those in cash which looks really nice.

Unbelievable, third graders plot to kill teacher.

NewMarket Technology Inc. (NMKT.OB) seems to have had a good year.The company trucks along.

Somehow Stockpursuit.com was 6th in a Google search of "wachovia shares" for a minute after Wachovia's site itself and Reuters.

full disclosure:no position in any stocks mentioned
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Eternal Technologies (ETLT) just reported 2007 results. Earnings increased 27% year over year. They have no long-term debt and $.26 per share in cash. The stock finished trading today at $.39 a share. They have a net current asset value or quick liquidation value of $.77 per share. The biggest potential in Eternal is the E-sea breast cancer detection equipment. It grows well. Earlier analysis of Eternal.


E-Sea manufactures and sells a medical device known as a "Three-operator Mammary Gland Detecting System." This device is used to examine persons and detect early stage breast cancer. We anticipate wide acceptance of this product as it is a low cost alternative to expensive and often times unavailable mammography.

For calendar year 2008, we will focus on three areas:

1.Acquiring additional interests in agricultural facilities to complement our existing operations.

2.A possible acquisition to compliment or expand the operations of E-Sea, or a spin-off of the operations of E-Sea.

3.Bring the E-Sea diagnostic equipment to the USA for FDA approval and potential eventual sale. This has been delayed because the Chinese equivalent of the FDA has not yet approved the equipment from export.

On January 16, 2008, the Company received authorization from the Chinese government to begin the manufacturer and distribution of its new generation mammogram machine. This machine uses thermo technology. The Company's prior machine used infra-red technology.

On March 5, 2008, the Company sold its patented technology for the cure of Galactophore Hyperplasia to a Chinese entity for $8,500,000 RMB of which $1,500,000 RMB has been received The remaining $7,000,000 RMB will be paid in two installments, $3,000,000 RMB in May 2009 and $4,000,000 RMB in May 2010.

On March 20, 2008, the Company leased its patent in its SSB Dissemination to a Chinese entity for five years. The Chinese entity will develop goods under the patent, manufacturer and market them during this period. For the use of the patent, the Company will receive $18,000,000 RMB, of which $5,000,000 has been received. The remaining $13,000,000 RMB will be paid in four installments as follows:

October, 2009 - $3,000,000 RMB
October, 2010 - $3,000,000 RMB
October, 2011 - $3,000,000 RMB
October, 2012 - $4,000,000 RMB

On March 21, 2008, the Company sold its proprietary thermal tomography technology to a Chinese entity for $20,800,000 RMB, of which $5,800,000 RMB has been received. The remaining $15,000,000 RMB will be paid in two equal installments of $7,500,000 RMB in June 2009 and June 2010, respectively.

full disclosure: long ETLT
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I guess Wall Street is figuring out a lot of retailers probably aren't going to go bankrupt. Finish Line (FINL), a stock I've been extremely interested in these past couple weeks is flying today, up 22% just today. There was a lot of uncertainty going on with the company. Every successful trader or investor has an edge. You have to in this business. For me and investors like myself it can be as simple as finding fear and exploiting it. As Warren Buffett says, I will tell you how to become rich, Close The Doors be fearful when others are greedy and greedy when others are fearful.


full disclosure: no position in FINL


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