A Mix of Old-Hand and New Technology

09/01/2006 12:00 am EST

Focus:

James Oberweis

President, Oberweis Asset Management, Inc.

Known for his ability to spot a good bargain, Jim Oberweis reviews three companies in three diverse industries: Oil & gas, computer consulting, and medical devices. What they have in common: The opportunity to buy them at a discount…

 

“Allis-Chalmers Energy Inc. (ALY AMEX) provides a variety of products and services to the oil and natural gas industry. Services include directional and horizontal drilling, compressed air drilling, casing and tubing installation, tool rental, and coiled tubing installation. In the company’s latest reported second quarter, sales increased approximately 156% to $60.5 million from $23.6 million in the second quarter of 2005. Allis-Chalmers Energy reported earnings per share of $.50 in the latest reported second quarter vs. $.12 in the same quarter of last year. Clients of Oberweis Asset Management own approximately 443,000 shares. On July 27, 2006, the company announced its intention to offer 2.5 million shares of its common stock in a public offering and $80 million of 9% senior notes in a private placement. Proceeds from these offerings will be used to fund the acquisition of DLS Drilling Logistics, a drilling company based in Argentina. These shares may be appropriate for risk-oriented investors.

 

“Edgewater Technology, Inc. (EDGW NGM) provides technology management consulting services, including technical consulting, custom software development, and system integration services. The company targets middle market customers, offering specialized premium services to divisions of many Global 2000 companies. Their broad range of services helps companies to implement corporate performance solutions, optimize business processes, and unlock the value of their corporate data assets. Clients include American Express, Blue Cross Blue Shield of Arkansas, Harvard University, and MIT. In the latest reported quarter, the company reported revenue growth of 41% to $14.9 million vs. $10.6 in the same year-ago quarter. Earnings for the quarter grew to $.08 (excluding stock compensation) from $0.04 in the comparable prior year period. Clients of Oberweis Asset Management own approximately 690,000 shares. These shares may be appropriate for risk-oriented investors.

 

“Spectranetics (SPNC NGM) is a medical device company that develops, manufactures, and markets single-use medical devices used in minimally invasive surgical procedures within the cardiovascular system in conjunction with its proprietary excimer laser system. Its CVX-300 excimer laser is the only system approved by the FDA for multiple cardiovascular procedures, including coronary atherectomy and the removal of problematic pacemaker and defibrillator leads. Clients of Oberweis Asset Management own approximately 253,000 shares. In the company’s latest reported second quarter ended June 30, 2006, sales increased 50% to $16.0 million from $10.6 million in the second quarter of 2005. Earnings for the same period increased to $0.02 from $0.01 in 2Q05. These shares may be appropriate for risk-oriented investors.

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