Small And Micro-Cap Value Investor Moves From Closed End Funds Trading At A Discount To NAV To Housing And Machine Tool Manufacturers

• On 1:32 pm EST, Monday November 2, 2009

67 WALL STREET, New York - November 2, 2009 - The Wall Street Transcript has just published its TWST Small Cap Value Report offering a timely review of the sector to serious investors and industry executives. This 47 page feature contains expert industry commentary through in-depth interviews with top tier Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Small-Cap Value - Capital Preservation - Sovereign Bonds - Precious Metals - Value-Investing - Companies with International Exposure - US-listed Chinese Companies - Risk Limitation - Industry-Diversified Portfolios - Long-Term Value - Micro-Cap Companies - Turnaround Situations - Strategic Buying - Fundamental Analysis - Avoiding Value Traps - Closed End Funds Trading At A Discount To Net Asset Value

Companies include: Bridgepoint Education (BPI); Compass Minerals (CMP); Flexsteel (FLXS); Hardinge Corp (HDNG); Phillips-Van Heusen (PVH); Adobe (ADB); Affiliated Computer Services (ACS); Alliance Data Systems (ADS); American Water Works (AWK); Atlantic Tele-Network (ATNI); Celanese Chemical (CE); CenturyTel (CTL); Clean Energy Fuels (CLNE); Consolidated Graphics (CGX); Dell (DELL); Dillard's Department Stores (DDS); Drew Industries (DW); Educational Development Corporation (EDUC); First Acceptance Corp (FAC); Forestar Group (FOR); Fresh Del Monte (FDP); Hain Celestial (HAIN); Harbin Electric (HRBN); Huron Consulting (HURN); IMAX (IMAX); IMS Health (RX); Kennametal (KMT); Lamar Advertising (LAMR); NBTY (NTY); Nature's Sunshine Products (NATR); Nobility Homes (NOBH); Omniture, Inc. (OMTR); Perot Systems (PER); Pfizer (PFE); SPDR Barclays Capital International Treasury Bond Fund (BWX); SPDR Gold Trust (GLD); Silver Wheaton (SLW); Tellabs (TLAB); Temple-Inland (TIN); Tempur-Pedic (TPX); Tesoro (TSO); Valero (VLO); Verizon Wireless (VZ); Whole Foods (WFMI); Xerox (XRX).

In the following brief excerpt from just one of the interviews in the 47 page report, a small and micro cap valuation expert discusses the outlook for assessing value investments in the current market for investors.

JOHN E. DEYSHER is President of Bertolet Capital LLC, advisor to the Pinnacle Value Fund, a diversified, SEC registered mutual fund. He is responsible for the Fund's daily investment activities and has over 25 years' experience in the investment management business. From 1990 until late 2002, Mr. Deysher was a Portfolio Manager and Senior Analyst with Royce and Associates, an investment firm specializing in the securities of small cap companies. Mr. Deysher began his investment career with Kidder Peabody in 1983 where he managed equity and fixed income portfolios for individuals and small institutions. He holds a Bachelor's degree from the Pennsylvania State University, and Master's degrees from Indiana University, Bloomington (Business) and University of California, Berkeley (Science). He is a Chartered Financial Analyst.

TWST: Any other companies that you feel are representative of your investment style and approach?

Mr. Deysher: We can talk about a few of them since your readers are probably more interested in hearing about what we think is currently attractive. The first is Nobility Homes (NOBH), which is an Ocala, Florida based producer of manufactured homes with a $40 million market cap.

TWST: I have not heard anyone reccomend a housing company in a long time!

Mr. Deysher: It's very interesting, because as you know, housing is in the doldrums and manufactured housing even more so. It's hard to believe, but back in 1998, the U.S. industry as a whole produced about 373,000 units. In 2009 that number will probably be about 50,000 units. That's a decline of 86%. Now, a very smart investor in Omaha owns a company called Clayton Homes which is the largest player in manufactured housing. Clayton has been making acquisitions of smaller players to build out their network. Mr. Buffett appears to see good potential here when the housing market rebounds and we like Nobility because they're well positioned in the market. They sell mostly in Florida, which is a big magnet for retirees who often buy a manufactured home and put it on a chunk of land in a warm climate to retire in. The quality is very good since they must be built to the same codes as conventional site-built homes. As the housing market improves, a lot of buyers who got credit through subprime financing and other methods to buy conventional homes may be shut out of conventional homes since that type of financing is no longer available. Manufactured housing offers a viable alternative to them. Nobility Homes has a very strong balance sheet and is run by a father and son management team, the Trexlers, who're big owners. They're a survivor and should do very well when the cycle turns. The industrial firm we like is called Hardinge Corp (HDNG) and has a market cap of $62 million. Based in Elmira, New York they were founded in 1890. It's been my experience that when a company survives 120 years they are generally doing something right. Hardinge makes machine tools like lathes, grinding machines and other equipment used to cut and shape metal parts and components. Their customers are mostly small job shops that serve cyclical industries like auto, appliance and aerospace. The average price of a Hardinge machine is $50,000-$70,000 so it's a major capital expenditure. Consequently, recent sales and profits are down substantially. As a result Hardinge is taking aggressive steps to right-size their cost structure like closing plants, reducing headcount, and lowering expenses. Eventually, their customer base will have to order replacement machines or upgrade existing machines and there is a lot of operating leverage when the cycle improves. They have a strong balance sheet and the insiders think like owner operators so this could be a big stock if you are patient and buy it at the right price.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 47 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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