IDT - Possibly A Spectacular Opportunity

Normally, one should never consider buying a stock trading below
$1 a share. But the current market is light-years away
from normal. There are a handful of companies trading at
minuscule stock prices that have been mistakenly tossed
into the trash heap. IDT Corporation is an excellent example.
Trading at about 90 cents a share, down from $9 a share at the end
of 2007, it has net cash of well over $2 a share. The market says
the whole company's worth $48 million. Even in the
context of a vicious bear market, this stock never
should have dropped to anywhere near its current quote.

The core telecom business, with $1.8 billion in annual
sales, has undergone an impressive transformation over
the last year. The profitability of the telecom business
is masked by one-time charges and the closure or sale
of unprofitable businesses. Now that the hard work is
done, you'll see free cash flow in the current fiscal
year (that started Oct. 1) of $20 million.

This is the type of nugget you can only find in a
mega-bear market -- a company valued at $48 million
that generates $20 million in free cash flow and has
$150 million in net cash on the balance sheet.

In addition to the telecom business, IDT owns several
businesses in energy and media. Over the years, the
company has developed and sold many businesses --
Net2Phone is one of many success stories. While there
is tangible evidence that these businesses have
considerable value, even if you assume they're worth
zero, the stock is still a bargain.