Datawatch delivered another remarkably solid Q3. The $4.8 million in revenue was not a barn burner but still impressive given DataWatch generated it with a much leaner staff and in the depths of a historic global recession.

The Q3 net income of $275,000 and the YOY $1 million increase in cash was impressive. Jim Lieberman of Wells Fargo summed it up best: "This was a real demonstration of fabulous management through very challenging times."

Ken Bero has very limited career prospects as a DJ, stand up comedian or motivational speaker. What he has in spades, however, is the ability to quietly deliver positive bottom line results... even in a recession. I am impressed.

Ken Bero and John Kitchen reflected a quiet confidence that the company is well positioned in both their product line and staff. There was no indication of a strong Q4 upswing in demand so that will take patience. If/when that upswing occurs, however, DataWatch will be well positioned with both a competitive product line and a very lean organization to deliver it. The combination should produce solid results.

With the share price dropping 10% on 4,000 shares of volume it is clear other investors were not as impressed as I was.

If DataWatch's share price continues to languish, I would suggest the Board of Director's authorize a share repurchase program. At the current share price they could repurchase 25% of the outstanding shares for $2.5 million and still have a $3 million cash cushion in the bank. The combination of the lean business model and a relatively stable revenue stream makes a scenario where the company would burn through $3 million very, very unlikely. It is more likely they will continue generating cash as the global economy gradually rebounds.

At some point someone, perhaps a private equity company or another player in the business intelligence software niche, will likely make an offer to acquire DataWatch. If that happens, each share repurchased in the $1.50 to $2.00 range will make remaining shares worth more. Simply authorizing a share repurchase program will bolster shareholder confidence and the share price.

Congratulations to Ken Bero & team for delivering yet another solid quarter. This shareholder is impressed and appreciative.

Good luck to everyone.

Fujigrower@gmail.com