Casino Capitalism

Interland (INLD) Update

Interesting SEC filing today from Interland (INLD), which describes the resignation of one of the main officers of Web.com, Mr. Pemble. The bullish news is that several Interland insiders, including the CEO, bought Pemble's INLD stock (153,000 shares worth) at $4.40 per share. The CEO bought up 24,000 shares and a director bought up 45,000 shares. It is always positive for a company when insiders are buying stock, especially after a run up.

Network Engines (NENG): New Stock Pick

Investment Summary:
I believe that Network Engines (Nasdaq: NENG), at its current price of $1.88, represents a low-risk investment, with substantial upside price potential in the next several years, should NENG’s newly appointed, and highly experienced Chief Executive Officer, execute on some key business initiatives and position the company successfully in the high-growth network server appliance industry.

Investment Advice from James Tisch

This past Friday I had the opportunity to attend Columbia University's School of Business Annual Value Investors Conference. The speaker that most impressed me, at least at it relates to his off-the-record comments, was James Tisch of Loews Corporation.

Interland (INLD) Update

I was going thru Interland's (INLD) SEC filings and it appears that Kinderhook Partners, LP has taken a 6%  position in INLD. For some reason, INLD has two filing names on the SEC website and this only shows up in one area, but it seems to be an accurate finding.

I believe Kinderhook's investment is noteworthy, because these guys were very early in last years #1 stock, NutriSystems (NTRI). With Husic Capital already involved in INLD and now with Kinderhook taking a large position, I think the potential for INLD is huge if management continues to execute. We'll see. It sure seems like a good gamble with more influential funds jumping on board.

Graham (GHM) Update

I just finished listening to Graham's (GHM) quarterly conference call.

Basically the major reason for the miss on earnings here was because of a substantial decline in gross margins from the 2nd quarter. I, for one, had expected gross margin of at least 30% or higher (second quarter margins were nearly 33%), but the company had gross margins of only 27%. Management has explained the shortfall as related to the materials used in certain products. I'm not quite sure I fully understand or accept the explanation. In any case, clearly Graham (GHM) does not have much pricing power and more importantly I believe they will not see much gross margin improvement any time soon. They even mentioned that gross margins in China will be lower than current margins. The reason: Competition.

Graham (GHM) Earnings Major Miss

It surely is amazing how unpredictable the market is. I'll do a longer write up on Graham (GHM) after I get to listen to the conference call, but suffice to say the earnings announcement today was way beneath expectations. My initial thoughts are that the stock is dead money for quite some time and it is a good idea to book your profits here. I generally like to hold stocks for over a year, but after the seven month roller coaster ride on GHM, I'm not ready for another.