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Hi Thetenor,

Was there anyway we could have forseen this buy?

There should not have been without obtaining illegal insider information.

Also take a look at the recent insider trades and notice that most are sells,

http://www.smartmoney.com/eqsnaps/index.cfm?story=insiders&symbol=CNXS

thus contradicting the saying that "all insiders make out at the expense of stockholders". TMF has vouched for CNS's management for a long time.(Most recently in an interview with the CEO)

One way to get an idea about whether a small company might be a buyout candidate is to look at the Enterprise Value = Mkt Cap+cash-debt

http://www.fool.com/dripport/2002/dripport020221.htm

Since 2003 after changing fiscal year, the enterprise value has been:
(All number in millions except stock price)

Shares Price Mkt cap Cash+ST inv debt EV
2003 14 6.00 84 41 0 125
2004 14 14.00 196 49 0 245
2005 14 13.00 182 61 0 243
2006 15 23.00 345 52 0 397
ytd 15 28.50 427.5 52 0 479.5

My calculations give EV a CAGR of ~40% over this time span.
This indicates that the money required to buy the company is increasing at a rapid rate. Thus a possible candidate for a buyout?
I also think that the increases in FCF and no acquisitions in site make it a good way for the buyer to increase its earnings if the purchase price is not too high.

I didn't look at these figures till this morning and didn't load up on CNXS like I wish I had either.

Anyone have more opinions on ways to look for/at possible buyout candidates?

charlie---long CNXS
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