Saturday, October 17, 2009

A Late Friday Buy

I made a small purchase at the end of the day Friday. Its a small company called TII Network Technologies (TIII). They supply products in the DSL, surge protection, and VOIP arenas, amongst other things. Click here for a full profile.

I'm just looking strictly at value on this one. It trades at less than half of its current book value. They have nearly 11M in cash, and for a company with only 16M market cap, that is a pretty good safety net if the economy doesn't recover as quickly as some predict. Like most companies, revenues are down year over year, but operations are improving.

Now is the time to scoop up values in companies like these. I'm finding more opportunities in small cap names right now. The large cap stocks are followed so closely and bought by so many funds. I just can't find much value in large cap stocks right now. The key with these small cap names is make sure they are sitting in a good cash position and won't be reliant on credit to finance operations for an extended period of time, and you'll be ok.

Its a small position, and I may add to it, but it won't become too large for me. Its lightly traded and I'm not a fan of taking big positions in stocks like this. But I do think its worthy of getting a shot here. Here's a link to their latest quarterly report. (pdf)

I got this idea from Arohan's Investing Life Premium, which is a great service. Check it out, as he has many more great ideas as well.

2 comments:

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