Covestor

July 2010 proved to be a standard summer month in the stock market as volume was usually light and volatility was present, but not atypically so. I continue to own the same stocks of small companies, as these enterprises have businesses which are in good financial shape, or businesses with good balance sheets which are implementing operational changes.  These stocks are lightly owned, except for NDAQ, and are not traded heavily.  I would expect August will be very similar to July as far as volume is concerned.  A continuation of the European debt issues could increase volume to the downside.

Covestor Model: The Reasons for Owning the Portfolio Holdings

1.    Gigamedia (NASDAQ: GIGM):   The focus for GIGM is building the customer base in France, and I can already see marketing strategies implemented as Mangas Gaming has signed an agreement with a French soccer team to promote the gaming site.  In addition, a popular cable channel in France will air a gaming show using the site as the main advertiser. In Asia, integrating the new games from the purchased company to the existing platform will continue.  The main focus is growing the customer base in France in partnership with Mangas Gaming.

2.    Digital Globe (NYSE: DGI):  Same idea as each prior month, the reason for ownership of the company is the continued increasing demand by governments and private enterprise for digital photography from satellites, to help with defense, intelligence, and information collection.  Between April 1, 2010 and July 27, 2010 the stock has fluctuated between $25 and $27.

3.    NASDAQ:  (NASDAQ: NDAQ) should benefit from the continued demand for data from companies, as well as for derivatives on equities, indexes, bonds, power, carbon, companies seeking to go public, and interest rate swaps. 

4.    Cass Information Services: (NASDAQ: CASS) For 2Q2010, CASS reported earnings of .52 cents per share, which was better than the .39 cents per share during 2Q2009.  Revenues came in at 23.8 million dollars for 2Q2010, 9% better than 2Q2009.  When interest rates start to rise, Cass is in very good position to benefit from wider spreads. 

5.    Kona Grill: (NASDAQ: KONA) The key for Kona is continued operational improvement with concentrated efforts on social networking and targeted local marketing to drive traffic.  Kona reports results on July 27, 2010.

6.    Mesa Laboratories:  (NASDAQ: MLAB) Mesa Laboratories develops, acquires, manufactures and markets electronic instruments and disposables for industrial, pharmaceutical and medical applications.  2Q2010 results were reported on May 25, 2010 and net income for the year decreased less than one percent to $4,769,000 or $1.45 per diluted share compared to $4,790,000 or $1.48 per diluted share one year ago.