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Can’t resist goodies: my February buy is Optimal Group (OPMR) February 7, 2008

Posted by deminvest in growth stock, Internet stocks, investment, nasdaq, Nasdaq stock, OPMR, Optimal Group, risky investments, Single stocks, stock I own, stocks.

Last week I wrote I’d buy Optimal Group. Now I am doing as promised.

Cogitator, in his interesting comments, made me doubt about this purchase:

Cogitator – January 31, 2008
This company is trading cheaply for a reason: it is not profitable. In the first 9 months of 2007, OPMR lost almost $5 million. If losses continue, cash will erode along with your purchase.
Cogitator – February 2, 2008
I should add that the company spent $55 million on WowWee and only has about $60 million in cash now. That works out to $2.30 per share.

My information about cash held by Optimal Group comes from Yahoo finance. Unfortunately Yahoo finance does not always display updated info. I found an Optimal Group balance statement on MSN. They had $197M in cash at the beginning of 2007. Maybe they used part of that money to buy WooWee. Yahoo’s figure of 113.91M cash held by Optimal may be correct.

I can’t find out. I know it is stupid to buy a company for its cash, without being able to find out if they still have 50M or 100M.

I am very aware that this investment is quite risky, but: (more…)

interesting kind of free Stock: Optimal Group (OPMR) costs below its cash and owns WowWee robotics January 27, 2008

Posted by deminvest in growth stock, Internet stocks, investment, nasdaq, Nasdaq stock, OPMR, Optimal Group, Single stocks, stock I own, stocks.
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Those are the “marvels” of a bear market. OPMR is a very interesting company, that produces WowWee award winning robots, like the Dragonfly and manages on-line payment systems. What is interesting is that (from a certain point of view) I can buy this company for free. Each shares own more cash than it costs:

Total Cash Per Share: $ 4.375

Last Trade: $ 4.24

Total Debt: $0

This means that if I could buy all the shares of the company at Friday’s closing price, and if there were no taxes, I could put back in my pocket more cash than I spent and own a debt-free company with cool products and a few hundred skilled engineers.

For a very interesting Post about Optimal Group and WowWee robotics click here. The author points out that OPMR price not only is less than the cash the company owns, but even half of its book value.

Forward P/E: 35.33 does not look such a good deal, but with all that cash, to me it is enough.

My friend Paolo bought a WooWee Robosapien. He goes crazy for it almost as much as I go crazy for my Roomba Robot.

Said all that:

Optimal Group is my buy for February. On February the first, I’ll probably toss $1000 on OPMR.

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