“Valpey-Fisher Corp. (VPF, Nasdaq) is a pioneer in the design of high-accuracy subsystems used in digital and optical telecommunications systems throughout the world. VPF’s products result in increased network data capacity, plus improved voice and video quality. … In the six months ending July 4, 2010, sales were up 45% compared to the same six months in 2009, while there was a profit of $232,000 vs. a loss of $99,000 last year. The 2009 loss is attributable to a temporary turndown in orders. Additionally, last year there was the expense of expanding it product offering with the formation of a new line that focuses on microwave components and modules, in which $177,000 was invested. Also, the first six months of 2010 saw an increase of $213,000 in cash flow compared to a negative $281,000 last year. The company’s major OEM customers include Alcatel-Lucent, Blade Networks, Juniper Networks, Harris, Raytheon, BAE Systems and Broadcom Corp. … In the latest quarter, revenue soared 52% vs. a year ago, with the backlog of $2,207,000 indicating a healthy future vs. advance orders of only $1,532,000 in the second quarter of 2009. We are recommending this high-tech firm for these reasons:
1) There’s a growing acceptance of its products.
2) The purchase of VPF shares in the open market by insiders indicated their confidence in the company’s future.
3) Strong balance sheet. No long-term bank debt.
4) Small capitalization. With a float of only 2,190,000 shares, it shouldn’t take much buying to move the stock.”
R. Max Bowser, The Bowser Report, 9/10