In my last article I spoke of why we are so excited about one of our holdings, Linktone (LTON). They announced a great quarter, highlighted by a return to profitability (not bad for a company that at the time was trading at ½ of cash value). The stock is breaking out (thanks in part to a shout out by James Altucher on a TheStreet.com video). My reason for writing this follow-up is not to toot my own horn, but really to recommend that anyone that liked the Linktone story take a look at another one of our holdings, BroadVision (BVSN).
BroadVision is another company that is profitable and is trading at less than just the cash that they have in the bank. They have no debt and cash of $61.9mm or $14.11/share and as I am writing this the last trade on the stock was $13.00. Here comes the part that will blow you away; are you sitting down for this? In Q4-08 they legitimately earned 64c/share!
BroadVision continues to generate free cash flow quarter after quarter. We think that revenues bottomed out during 2008 and we expect continued profitability even in the worst case scenario. The company’s product offerings are better than ever and they have a Software-as-a-Service (SaaS) HR company named CHRM that is growing like gangbusters in China. The company said on the Q4 conference call that they expect it to turn profitable as a stand alone entity (read: spin-off some day) by the end of the year.
We’re all about risk adjusted return, and BVSN has virtually no risk and 300%+ potential. They’re handing out free money across the street; will you venture over to claim yours or will you just assume that it is too good to be true before you go over to check it out for yourself?
Disclosure: Author holds long positions in LTON, BVSN.OB