The Microcap Speculator

A few items:

• BAB Holdings (BABB.OB) announced another $.02 quarterly dividend. Shares have recently traded in a price range of $.85-$.95. Though the trading is thin, the yield is fat. Just counting the regular dividends — not last quarter’s special dividend — BAB Holdings gives shareholders $.08 per year. At the bottom end of BAB’s price range, that amounts to a 9.4% yield, and at the top end, an 8.4% yield. Not too shabby!
• I’m still long the junior/mid-tier gold miner field bet posted Feb. 20. So far, the results are mixed: Gold Fields [[GFI]] is up about 10.6% since then, and Gammon Resources [[GRS]] is up a solid 26.4%. On the flip side, Golden Star Resources [[GSS]] is down 3.2% and U.S. Gold [[UXG]] is down 2.6%. My takeaway? The disparate results show the need to play this one as a field bet. That’s why when I decided to increase the bet yesterday, I added another stock, Tan Range Exploration [[TRE]], instead of adding to existing positions. Next add will probably be Western Goldfields [[WGW]]. The stocks still don’t reflect the recent rally in the underlying metal, or potential earnings power. As long as gold holds $900 over the next three months, I expect a slingshot move in the juniors and mid-miners.
• Microcap nursing-home stock Advocat, Inc. [[AVCA]] reports earnings next Wednesday. Though the stock is under pressure on light volume this week, I like it at these levels and may boost my holdings in advance of the quarterly report.
• Littlefield (LTFD.OB), the bingo hall operator frequently mentioned here as a play on aging baby boomers, was a little light on earnings. I’m out of the stock and have no plans to reenter until financial results improve.
• China 3C Group (CHCG.OB) continues to hit new lows, though it reaffirmed fiscal 2007 earnings projections of $.43 to $.47. At today’s price of $2.23, I think that the Chinese electronics retailer offers a pretty good risk/reward in front of the 2008 Olympics. I’m a buyer.

DISCLOSURE: Long BABB.OB, GRS, UXG, GFI, TRE, AVCA, CHCG.OB. No position in WGW (yet) or LTFD.OB.

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