Dear Mr. Berko:

About three years ago, you listed 12 cheap tech stocks under $7 a share that you thought were undervalued. Well, I invested $48,000 and bought every one of them. One of them fell in value, two of them are still at the 2003 price and the remaining nine took off. My $48,000 grew in value to $129,000 last year, when I sold them all.

So how about another list of cheap issues that you think are undervalued? I won't blame you if they don't work out, but it was a fun ride, and I enjoyed charting and checking their prices every day.

G.T., Walton Beach, Fla.

Dear G.T.:

I don't know bupkis about cheap stocks, so I called my old chum Charlie "Yum-Yum" Ding. Yum-Yum thinks you gotta be unhinged to own his recommended issues, but here they are.

Cleveland Biolabs Inc. (CBLI - $5.57) is a $1.1 million revenue company that identifies drugs for the protection of normal tissue that is exposed to radiation and toxic chemicals. CBLI has zero debt and has never made a centime. Cynthia Tsai of the Madeline Fund likes the stock.

SuperGen Inc. (SUPG - $5.14) commercializes therapies for solid tumors, hematological malignancies and blood disorders. SUPG has tons of cash, no debt, $30 million in revenues and wouldn't know a profit if it bit the chief executive on his bum. However, Rodman & Renshaw believe SUPG could be a $25 stock in a year.

Cavalier Homes Inc. (CAV - $3.11) produces, sells, finances and insures low- to medium-priced manufactured homes. CAV has a good cash balance, $272 million in revenues and should earn a dime per share this year. Value Engine, Plunket Research, Black Box and Pechala's have good reports on CAV.

Gemstar-TV Guide International Inc. (GMST - $3.22) approves on-screen programming guides and other services for cable and satellite TV. Its TV Guide magazine focuses on TV-related news, feature stories, celebrity photos, behind-the-scenes coverage and reviews and recommendations. GMST has $12 million in debt, $604 million in revenues, should earn 8 cents per share in 2006 and 13 cents per share in 2007. Media mogul Rupert Murdoch sits on GMST's board, and the company has more than $520 million in cash, which equates to $1.25 a share. Barton Crockett of J.P. Morgan gives GMST a solid four-star rating.

Sanmina-SCI Corp. (SANM - $4.29) is an $11.7 billion electronics manufacturer that restructured after the tech bubble exploded five years ago. SANM has $950 million in debt, a $1.40 book value per share and hasn't made a penny since 2001. However, the company expects to earn 28 cents per share this year and 41 cents per share in 2007, and Lehman Bros. plus Jeffries have research reports on the company.

Sun Microsystems Inc. (SUNW - $5.38) provides products, services and support solutions for building and maintaining network computing environments. This $13 billion revenue company with $1.1 billion in debt hasn't earned a euro in six years, but new management believes it will break even in 2007 then book a profit between 12 cents per share and 25 cents per share in 2008. Bear Stearns recently upgraded SUNW to a "buy."

KMG America Corp. (KMA - $8.50) owns the old and respected Kanawa Insurance Co., which is a provider of voluntary life and health products. KMA has a $5.40 book value per share and expects to earn 29 cents per share this year, then 51 cents per share in 2007. Michael Fusting of Greenspring Fund recommends the stock.

Spectrum Pharmaceuticals Inc. (SPPI - $5.57) has several proprietary drug products under development for the treatment of prostate, lung and bladder cancers. SPPI is flush with cash, has $500,000 in 2005 revenues and there is zero profit in sight. Black Box and ValuEngine have reports on SPPI.

Finally, Lucent Technologies (LU-$2.52) was one of the 2003 picks that never got off the dime. This $9.5 billion manufacturer of software and telecommunications equipment will soon merge with Alcatel, and both are in the black. This marriage could prove profitable in a couple of years. However, consider buying the Lucent ($7.75) convertible preferred (LUTHP), which trades at $1,022 with a current return of 7.6 percent.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@adelphia.net.

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