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Adams Golf (ticker: ADGO)

Oct 2003


ADGO is both asset play and turnaround play. ADGO is another Benjamin Graham type value stocks.
Its NCAV (net current asset value) is 0.96 per share. Its balance sheet is superb, no debt and lots of cash.
It has been profitable for last 2 quarters. For last 4 quarter it is still not profitable. There was not much
insider selling recently.

ADGO has 2 major popular product: Redline driver and Adams iron. Its sale has been growth 50% over
last 2 quarters. If it continue the growth trend, I expect it broke even for winter 2 quarters so that it will be
profitable 6 months from now on 1 year bases. Its new product has very favorable review online
and it is gaining market share in a distressed golf industry. I just quote Peter Lynch : "it is better to
buy a booming company in distressed industry than buying a booming company in booming industry".
Essentially I am buying this value stock with growth built in.


Here is my thought on buying this stock:

(1) It is very thin, so buy it strictly on value, do not chase high. use limit order only. It is now only worth NCAV
value which is $0.96 per share. Buying below 0.7 is better and safer.

(2) It is for true long term investor only, once you bot it, you will have hard time to sell it due to low liquidity. For me, I do not care, I do not want to sell it any way short term.

(3) My target: near target is 0.96 NCAV value, longer term it may go above $1 or far more if its revenue continue to growth at double digit next year.

(4) Do not buy it with big money. 10% of total money may be large enough although I put more % into this
stock.

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