April 27, 2007


Is a Rulte Breakers pick.

April 24, 2007

GameTech International

From the Fool:

GameTech International, a Nevada-based maker of electronic bingo systems, is another stock in the long tail that piques the interest of our CAPS players. The company primarily targets the thousands of bingo halls in North America, so, like National Research, I'd say this is largely another play on the aging demographic.

As a grandson who spends a lot (too much) of his time picking up and dropping off two fanatics at the local bingo hall, I can attest to just how crowded these places can get. Over the last two years, the stock has risen more than 200%, driven by substantial growth in operating income.

Throw in a PEG of 0.84, EV/EBITDA of 7.3, and the fact that chairman Richard Fedor owns nearly a quarter of the shares outstanding, and you've got a bingo card with some potential. On top of all that, two of Wall Street's best -- Roth Capital and Merriman Curhan Ford -- currently have outperform calls on GameTech.

April 13, 2007

On 2: The Next Big Thing?

From the Fool:

When companies lay claim to having the "next big thing," a Foolish dose of skepticism always comes in handy. However, On2 Technologies, winner of the 2006 Frost & Sullivan Award for Technology Innovation, may actually have something to hang its hat on.

According to many, On2's TrueMotion codec allows services to deliver streaming video with unmatched image quality. I'm no tech guru, but when names such as Adobe (Nasdaq: ADBE), Electronic Arts, Skype, and even XM Satellite Radio are wholeheartedly adopting a company's technology, the stock is definitely worth a second (or even fifth) look.

On2 has yet to turn a profit, but the stock has more than doubled in the past year -- fueled primarily by 200% revenue growth. In addition, On2 was recently recommended by Merriman Curhan Ford -- one of CAPS' and Wall Street's best.

CAPS All-Star upanddown100 also thinks On2's on to something:

On2 makes the best codec for the ubiquitous FLASH video and sells encoding platforms for social networking sites and individual developers. ... The revenue model here is "back-end loaded" (in other words royalties, royalties, and more royalties) so once On2 hits critical mass in the mass media -- the profitability of the company will go through the proverbial roof.

April 5, 2007

Make a Bet on YouBet

From the Fool:

arely does a penny stock capture the attention of one of our Foolish founders. But that's what Youbet.com, which uses the Web to make it easier to bet the horses, has accomplished: David Gardner clicked outperform in Motley Fool CAPS in September, only to see the stock drop 19% in the months since.

What gives? A fourth-quarter loss didn't inspire confidence. And the Unlawful Internet Gambling Enforcement Act, which Congress passed at the end of September, had investors panic selling anything that connected the words "Internet" and "gambling." (See for yourself).

But David and the other professional and amateur investors participating in CAPS have remained patient:

For some, like CAPS investor gregous19, the thesis is simple. Quoting from his pitch for the stock:

"[Youbet] is safe from the anti-poker act by Congress. They have a license due to their horse racing, which makes their business the one and only legal one.... Gambling is the business where the house ALWAYS wins; become the house."

Good point. To that I'll add that, on the whole, analysts are extremely bullish about the long-term prospects for Youbet. They see 32% average annual growth over the next five years, which, when compared to the stock's P/E, results in an extremely attractive 0.71 PEG ratio.

That appears to be enough for management. Three different executives and directors, including CEO Charles Champion, have bought shares on the open market since last Wednesday.

But are expectations for 32% annual growth realistic? Why not? Most horseplayers I've seen -- and I've seen many in my varied excursions to Vegas -- grow roots in their seats as they bet on race after race after race. Most of these guys were last seen upright during a Joey Bishop performance.

Gregous19 is right; it's good to be the house when it comes to gambling. With a startlingly low PEG, a protected franchise due to government regulation, and a business where growth is practically

April 4, 2007

Meritage Homes

Meritage Homes is nearing is 52 week low. It has been singled out by the Fool as a Stock Picker recommendation.

April 3, 2007

Dividends: Unilever

From the Fool:

It's very likely that you bump into a number of Unilever's products on a regular basis. The company owns brands like Country Crock, Dove, Hellman's, Wish-Bone, Lipton, Vaseline, Slim-Fast, and my personal favorite, Axe. They're not particularly exciting products (with the possible exception of Axe!), but they're good ol' staple purchases, the kinds of products that you buy over and over again, no matter how the economy is doing. Over the years, Unilever has proven to be a solid, stable performer and, with the help of its dividend, has produced fantastic returns for its shareholders.

The company has come under fire recently for less-than-stellar growth. Rumors have also started to fly that activist shareholders might be looking to break up the $21 billion company.

But CAPS players, who have voted 112-4 in favor of the stock, seem to find the business and dividend anything but stale. A few players share their thoughts:

* NoVaAmPro: "Unilever just makes tons of stuff (consumer non-durables, meaning you'll keep buying it over and over again) for sale all over the world. Besides keeping me smelling fresh throughout the day, its dividend yield should keep my portfolio looking fresh every 6 months."
* Jnifer4: "Unilever is a good company that sells goods which everyone needs and will still sell product even in a recession. They also boast a dividend, which makes it a good company to hold in a portfolio for many years. The Unilever name has been building and growing and is growing up to (I really hope) be on par with Johnson & Johnson someday in terms of household recognition, but (at least currently) at a fraction of the cost."