Casino Capitalism

Network Engines (NENG) Still Not Revved Up

Yesterday, Network Engines (NENG) reported quarterly results that were basically in line with expectations. Despite the fact that the stock is off about 25% from its high, I still believe that my basic investment thesis outlined in prior posts is intact and the I think the risk/reward is still favorable at current prices. Incidentally, I have bought more shares of NENG during the recent sell-off.

Seismic Sector is Sizzling

If you've been following my oil and gas stock picks, you know that I've been bullish on the seismic sector for quite some time. I remarked in late 2005 that seismic would be a key investment theme in 2006 and recommended purchases of Seitel (SELA.ob) and Petroleum Geo-Services (PGS) for the best exposure to the sector. On Friday, the whole seismic sector got a huge boost when Schlumberger Ltd. (SLB) announced the purchase of its remaining 30% stake in WesternGeco, the leading seismic data company in the world, from Baker Hughes for $2.4 billion.

Cryo-Cell (CCEL) Paying 25% Interest Rate

We were able to clear out of our entire position of Cryo-Cell (CCEL) during the last four trading sessions, and boy are we relieved. A quick run thru of the company's latest 10Q that was filed the other day, reveals that our thesis is entirely correct and we think the company faces significant downside as more shareholders wake up to the company's Revenue Sharing Agreements. We'll keep following this company, since the industry, including ViaCell (VIAC), is intriguing, and as we well know every dog has its price.

Google Wins, Cryo-Cell Shareholders Lose

Cryo-Cell (CCEL.ob) reported earnings today. If you read our last post, you probably were not surprised by the climb in revenue, increase in the company's cash position to over $9.3 million (up from $8.6 million in the 4th quarter), and yet the disappointing operating loss at the company (i.e. expenses, including interest expenses, are rising much faster than revenue).

Despite the semi-decent report as it pertains to cash flow and revenue growth, we are slowly dumping our position in Cryo-Cell (CCEL.ob), in what has become a major loser for our portfolio (down 30%). It's difficult to actually sell a position in this stock, given the ridiculous lack of liquidity in bulletin board stocks (Note to Self: Don't buy stocks on the bulletin board), but we'll be looking to scale back more on any bounce.

Network Engines (NENG): Dominant Appliance Company?

Yesterday, Network Engines (NENG) issued a press release announcing the appointment of a new chief technology officer. While we do our best to not get caught up in the hype of company announcements, we did find some interesting tidbits in this press release.

Cord Blood Banking Blues

Our investment in cord blood banking company, Cryo-Cell (CCEL.ob), now close to a year old, continues to dissappoint us. When a company's share price underperforms our expectations for more than a year, we think it is prudent to try to understand what the market may be telling us about the long-term prospects of a company and the proper valuation for its shares. Our perspective is that the market is very efficient over longer time periods (3 years+), so if an invesment is not showing profits after over a year (we could lengthen this reassesment time, but once a year is probably about right), it is time to reevaluate the position and question our investment assumptions.