SecureNet Limited

In our email update we said SecureNet was now one of our most undervalued buy recommendations. Then, two days later, the company issued a profit warning. But directors also confirmed that the company still has over $92m in cash, or over $1.20 per share. That gives us a great deal of confidence, as does the fact that MD Geoffrey Ross recently bought 400,000 shares at $1.15. Management has shown a willingness to buy back shares in the past and they'd be mad if they didn't implement another buyback at these prices. With the shares down 27% since issue 97/Feb 02 (Speculative Buy - $1.17) we're upgrading SecureNet to an outright BUY. Under 90 cents you may consider putting up to 5% of your portfolio in this stock – it's suitable for everyone but those seeking only income-generating investments and is preferred over SMS (see left).