“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