Manager: Gehman Capital
Model: Undervalued Growth Companies
Last Month I wrote that “The stocks in my portfolio got hammered in March.” I concluded that “I think profits and future projections will cause the portfolio to move to levels even higher than in the past.”
Seven of the stocks in the portfolio moved up slightly in price in April, and three moved lower. Each one still has a special story.
Finisar (NASDAQ: FNSR) made a nice recovery in April. Finisar was my worst performing stock in March, but rallied through April.
Anadigics (NASDAQ: ANAD) seems to be suffering. The stock dropped after they reported 1st quarter results. Their chips, however, are special and I expect the company to improve performance.
Quiklogic (NASDAQ: QUIK) dropped significantly. Some customers delayed orders because of excess inventory. QUIK is a small company that is developing new products. There is risk, but I believe the company remains a compelling investment. QUIK has many products, but I am most excited about the VEE/DPO (Visual Enhancement Technology) technology that allows mobile devices to be viewed in either bright sunlight or low light with low power consumption. Quick is testing products with some very large potential customers.
Dragonwave (NASDAQ: DRWI) dropped a few pennies in April. DRWI develops and sells high-capacity packet microwave solutions to mobile service providers. DRWI products offer a low cost solution to add wireless spectrum to existing tower space when fiber products are too expensive. One customer, Clearwire, has been DRWI’s largest and dominant customer. DRWI’s technology is now proved and accepted. DRWI is expanding its customer base – both internationally and nationally. I expect DRWI’s business to grow dramatically.
Often small cap stocks are volatile after they report earnings, even if the reports are positive. I believe that investors should generally ignore that volatility, and that the prospects for this portfolio remain extremely attractive.
