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No. of Recommendations: 11
CNS is trading today around $9.50 as of this posting. This is the lowest
the stock has been since last July. However, now the company has $49M
in cash instead of $41M, which translates to $3.50 a share. Also, the
dividend now stands at 0.2/9.5 = 2.1%. It's trading at 2.4 times book
value. Still no debt. Matt Richey valued the rock-bottom value of
the stock in the September issue at $9.78 assuming no growth.

The downside? Some question marks about growth, which is understandable.
The ability of management to market Breathe Right successfully for
growth is under question, as well as develop new products (although
the fiber tablets and snore relief seem to be doing at least okay).

I think what's attractive about this stock is it's relative safety and
dividend. It somewhat resembles FDP in that it has a good margin of
safety, a decent dividend, but questionable long-term growth prospects.
This makes it at the very least a decent short-term market hedge, with
a decent (but certainly not guaranteed) upside.

If this goes much lower, I will probably buy even more. What price it
will take for me to buy I still uncertain of, but it's getting darned close.


Thanks for reading! :)

Tom
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No. of Recommendations: 0
Hi Tom,

Good points about CNXS. I closed out my position on CNXS about a month ago. It could be a mistake, but I am just not impressed with management. They are still unsuccessful overseas, and are constantly changing strategies. Most of their management worked for the same previous employer. One minute they are going to introduce all these new products, now they are focusing on Breathe Right again. I haven't seen a consistent strategy with defined tactics executed yet. The fiber pills are growing but they are miniscule. While I believe there is little downside risk, I just don't see a lot of upside potential with this management. What happens if they decide they want to deworsify (I mean diversify) and announce an acquisition??? They could spend that hunk of cash in a hurry. I have seen bad strategies that were executed so well that they were successful. It just appears to me that CNXS can't decide on a strategy for any longer than a year. Just my thoughts.

Best regards,
MFCatbert
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No. of Recommendations: 2
Hi MFCatbert,

All excellent points that I cannot contradict, especially your point
about the cash getting chewed up in a hurry with an acquisition (since
they outlined that specifically as a potential strategy going forward).

What I do like about management is that they are rewarding shareholders
with decent dividends, and have done stock buybacks in the past, so at
least their shareholder friendliness is good. Obviously, that does not
translate into competence. I'm willing to give them the benefit of the
doubt for now, and allow them to figure things out as they learn about
their market.

$9.20 and falling.

Regards,

Tom
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No. of Recommendations: 0
I agree with your assesment Tom. I think it looks good, but I'm not in a buying position right now. I just hope that the company is snapping up as many shares as they can right now while the stock is trading so low.

Good luck to all.

Ben
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No. of Recommendations: 1
Hi Tom,

You stated I'm willing to give them the benefit of the
doubt for now, and allow them to figure things out as they learn about
their market.


I don't think the market is willing to do that. I sold out of the stock (but am keeping my eye on it) until they prove to me they know what they are doing. Show me the money. To me, the dividend increase was a bone they threw to the shareholders to keep them from focusing on the poor results. But I am like Dick Vermeil, who had to cut players that he loved like sons, but weren't the best at their position anymore.

Best regards,
MFCatbert...go Cardinals!
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No. of Recommendations: 0
MFCatbert,

I agree ... the market is not giving them the benefit of the doubt,
therefore there is now a discount on the stock. It's hard to say
definitively that the dividend increase was a bone to throw, but at
least the bone has some meat left on it. :)

MFCatbert...go Cardinals!

I am reporting your attempt to infuriate me to TMF. This kind of
behavior should not be tolerated on these boards!

Big :)

Tom
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No. of Recommendations: 0
If CNXS can start doing a better job at growing shareholder value I think I will start considering it in the same ballpark as MSA. As it stands now the missed shipments and disappointing growth has more or less left it stagnant. I sold my initial investment at $13 before the last earnings and didn't come back.

However, with the market the way it is now, I re-established a position at $9.40 today. With the dividend now 2% and all the cash on the balance sheet, I like offsetting some of the risk I took on by loading up on FARO and BWLD.

I admire that they tried to spread out their product line. They didn't lose in the process, and there is probably something to be said about that. But it's really time for them to grow the nasal strip business and prove the market isn't saturated.
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