Value Microcaps Review (Accountability)

I'm going to review some of the Value Microcaps stocks (AOB and ETLT) that I covered in my previous posts late last year and earlier this year. It's accountability time!

Since the rally late last year (November 2006) these 2 Value Microcaps stocks that I mentioned has been performing badly especially since I mentioned it again early this year (January 2007). But fortunately the last couple months, the fundamental of AOB and ETLT continue to improve and the stocks recover (though still very volatile on a day to day basis). Some of my scenario that I laid out (of ten-bagger or 900% return) around the $7.50 call option becoming a reality. Unfortunately, I don't play/invest in options. If there is anyone following the AOB $7.50 call option strategy that I mentioned previously or bought and hold AOB below $7.50 then congratulation on the gain!

AOB is not too cheap anymore with trailing PE of 24, but they are still growing fast and the Onlympic next year in Beijing should help give them exposure. As far as ETLT goes, this is one tough stock to crack. Everytime it rallies, it dropped again in a matter of weeks (to PE of 5). I still feel that this stock is undervalued (PE under 10 and P/tangible book < 1 etc.) but they have been undervalued for years. I believe, at this price, there are concerns of fraud. I saw that it is also currently being pumped as well in many message boards which might explain the recent rally. I'm hoping someday ETLT will reach its reasonable value and sustain the rally that they deserve.

Honestly speaking, I don't know where these two stocks will head next especially in the short term. But I think, in about a year or two, AOB probably will not be called a microcap stock anymore....

Here are some of my previous posts on some Value Microcaps stock that I was referring to:

1. Why Value Microcaps Rock?

2. AOBOOOYAHH.. Back at you Cramer!

3. ETLT.OB: an example of a value microcap stock.

Happy Investing!

Sidarta Tanu

Disclosure: This is not a recommendation for an investment. Investment in AOB and ETLT (and similar stocks) are risky and you can lose all your investment. Always do your own due diligence.