Monica might be a smart scientist but her shareholder communicat

Profitable Again with a Dividend
steven schuster
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Posted on 03/19/10 at 1:28am by steven schuster

I’m one of the few Americans who get a check from Israel. Every spring along with March Madness, comes my stock dividend from Mind CTI. (NASDAQ: MNDO)

I used to trade penny stocks. In 2008, when the financial crisis came, they melted down more than a vacation home next door to the Chernobyl Power Plant. So I went from a trader to someone who holds the stocks, and prays for miracles. That’s how I come to be holding a position in Israeli ADR, Mind C.T.I. (NASDAQ: MNDO)

Mind is in the Voice over IP business. They provide billing software and solutions. In the last few years they acquired 2 small software telecommunications companies, one in the U.S. and another in the U.K.

One would think that Voice Over IP, software would be a great business for an up and coming company like Mind. But there’s a little cloud that follows Mind C.T.I. and its CEO, Monica Eisenger around. The stock went from a high in 2000 of $13.69 to under $1.00 last year.

If you ever wondered who would be stupid enough to put their nest egg into one of those CDO’s (collateral debt obligations), we heard so much about last year, the answer would be Mind CTI. Most of Mind’s cash,approximately 20 Million dollars, was in one, and they couldn’t get their money back. Apparently, the bank told them it was as good as cash. - Which is why the Yiddish word schmuck is such a telling expression. In the company's defense - one doesn't expect their bankers to be liars and swindlers.

After the CFO went bye bye, Mind said it was suing the bank. Chairwoman, CEO, and founder - Monica Eisenger, who holds about 22% of the stock, couldn’t have been too happy.

But miracle of miracles, Mind announced earlier this year that its lawsuit was successful and it got most of its money back. And it was hoping to pay its usual dividend of about 20 cents. 20 cents is a pretty nice yield on a stock that was trading at $1, and the stock took off. Right now it’s trading at $1.78

In the last quarter, Mind became profitable again and announced operating earnings of 6 cents, on Mar. 15. They have a pristine balance sheet with no long term debt, and a current ratio of 6.28. That’s pretty good for a stock that sells for $1.78

Mind is very secretive and it doesn’t like to share too much info with its retail investors. Years ago when I threatened to ask embarrassing questions at a conference call, I was told that questions at conference calls were by invitation only. What? I did a little research and found out why? Monica Eisinger is from the Israeli military. She was an Israeli military scientist who probably still has a lot of contacts in the military dominated, Israeli government. Like any good military scientist she doesn’t like to share information. That attitude doesn't lend itself well for a public company and its shareholders.

Mind gets a special low tax rate from the Israeli government. Every time they pay a special annual dividend they have to get approval from a judge in court. Don’t worry, the fix is in and they haven’t been turned down yet.

Right now the stock seems to be a dividend play. When the stock goes X dividend later in March I wonder if the stock will go down the usual 20 cents?

Monica might be a smart scientist but her shareholder communication skills are sorely lacking. I can’t even remember the last time shareholders were invited to a conference call. Warren Buffett, Carl Icahn, anybody, - please takeover this stock.