PARL, CHCG, DLIA, Cigar butts

I will starting posting some of my picks. This week I have picked three cigar butts. Currently these are not doing well. That's why they are cheap. We are hoping that some day thing will turn around hopefully in the next three years. These are third grade business with 4th rates prices.

CHCG - China 3C group:
Profile: The Company is engaged in the business of the resale and distribution of mobile phones, facsimile machines, DVD players, stereos, speakers, MP3 and MP4 players, iPods, electronic dictionaries, CD players, radios, Walkmans, and audio systems. We sell and distribute these products through retail stores and secondary distributors.

Market Cap: $30MM
Cash: $28MM
Working Cap: $55MM
Total Debt: Zero
P/B: 0.3
P/S: 0.1
P/CF: 2.0

PARL - Parlux Fragrances designs and manufactures fragrances and beauty-related products such as lotions, creams, shower gels, deodorants, and soaps. The company offers its products through specialty stores, department stores, mass merchandisers, and pharmacies. Holding licenses to do so, the company manufactures Guess, Paris Hilton, Maria Sharapova, XOXO and Ocean Pacific products. In addition, Parlux offers watches, handbags, and a variety of small leather items under the Paris Hilton brand name.

Market Cap: $35MM
P/B: 0.3
P/S: 0.2
P/C: 24
Cash: $11MM
Working Cap: $95MM

We need to be careful as the working capital might not be worth much. Remember they make perfumes. They got a new CEO and his options strike price is $5.00. I like that


DLIA:
Delias engages in the direct marketing and selling of its clothing line. Intended for a target market between ages 12 and 19 Delia sells its apparel and accessory products through the Internet, catalogs, and retail stores. It also owns two subsidiaries called Alloy and CCS. Alloy targets the youth junior apparel market and CSS offers snowboarding apparel and accessories. The company currently operates over 60 stores in over 20 twenty states.

Market Cap: $62MM
P/B: 0.6
P/S: 0.3
P/CF: NA
Working Cap: $33MM.

The reason why I bought this, historically they did not make money due to high capital expenditures. I am hoping they will behave smartly now. Tilson has taken a position on this fund. I am hoping Tilson will make sure that the management behaves in a share holder interest. Let's see what happens. I always like value funds taking positions in my pick as they have the clout to make management behave in a certain manner.

Disclosure: Long PARL, CHCG, DLIA