Tuesday, September 15, 2009

Fortunet Finally At A Valuation That Makes Sense.

Fortunet has been a stock on my radar for quite sometime; which, shouldn't be a surprise, since I am a well known sucker for companies that can be bought for less than their cash minus all liabilities. In March, this was the certainly the case, but since there were other companies that I was more impressed with, never bought into the company. After FNET paying out a massive dividend, the share price fell to just over a dollar and hasn't really moved since. I personally never understood the valuation, as their ability to seemingly print money held up quite well during the recession, coupled with their board feeling confident enough in the business to distribute 2.50 a share in cash.

Today, it seems that FNET can effectively be taken off of my radar, as it is at a valuation that makes some level of sense... and on no news, at that! It isn't that stuff of this nature never occurs with nano-caps, but, this is certainly weird. The entire float of the company has changed hands almost 3 times, despite there being an hour left in the trading day. I look forward to hearing why this happened; regardless of if it some sort of manipulation or takeover attempt.

Disclosure: This is not investment advice. Unfortunately, I never owned shares of FNET (which shows what I know!) :(

1 comment:

rols said...

I too am a sucker for such stocks, and I have a small position in FNET, in at $1.28.

I happened look at my portfolio late this morning and saw the leap.

At first, I thought it was some kind of crazy system error, but it's really happening.

I bought FNET for the reasons you looked at it. I figured on holding it for three years or so, to wait for it to get back to $5 or $7.

I guessed FNET would rise to today's range over a couple of years, not in a day. Hopefully, Mr. Market will stay off his meds and drive the price back up!