S A ADVISORY April - May 2001
"New Micro-Cap Recommendation - Daw Technologies"


S.A. Advisory
2274 Arbor Lane #3
Salt Lake City, Utah 84117

(DAWK-NASDAQ) - $1.00 * 801-977-3100

DAWK is a supplier of ultra-clean manufacturing environment, or clean rooms, to the semiconductor industry. The company provides its customers with services to integrate the design, installation and servicing of clean rooms, including architectural engineering and design, installation, testing, certification, tool fit-up and continuing on-site and support.

For the fiscal year ended 12/2000, revenues rose 16% to $52.6 million - net operating income $2,648,000.

      Book - $1.23
      Cash - .24
      Debt - .22
shares outstanding - 16,393,000 fully diluted.
52 week range - $.40 - $2.25

Select Financial Data Year ending Dec.
1999 2000 2001E
Revenue $45 mil $52.6 mil $59 mil
Net Income/sh
(.70) .15 .18
from operations only
Shares outstanding
fully diluted 12.5 mil 16.4 mil 16.4 mil

The company attributed its improved financial performance to several factors, including rigorous cost-cutting measures begun in early 2000 and efforts to diversify the company's business, both geographically and among industry segments, and a top to bottom restructure of the company's operations.

According to the newly appointed president, Michael J. Shea, "We have taken extreme measures during 2000 to return to profitability, and our financial results for 2000 show that those measures have begun to pay off.

At present, DAWK's backlog as of 12/00 was approximately $28.3 million, as compared to $19.7 million at the end of 99, and $12.8 million at the end of 98.


Even though the market environment is very troubled, which has created increasing volatility, cheap stocks should not be avoided. In our opinion, DAWK has produced results that clearly demonstrate a strong turnaround. We believe that "new" management has taken the reigns from a "tired" and "wasteful" management and streamlined the whole show!

At present DAWK trades 20% below book, has a trailing 12 month PE of 6.6, sports a PSR of only .3, has increased its backlog by 43% and, of course, has very little exposure.

If we assigned a conservative PE valuation of 15x and base it upon our trailing 12 months operating earning of .15, a resulting share price of $2.25 results. If DAWK were to trade at 1.5x sales, DAWK would trade at $5.00 trailing. At 3x book, which is very conservative, DAWK would trade at $3.69.

Based upon 01 estimates, DAWK has the potential to appreciate 200% to 300% from current levels.

On March 20, 2001, DAWK announced it had signed a letter of intent to form a joint venture company to provide integrated clean room design, engineering construction and manufacturing services in China. The press release could over time be a huge revenue and earnings producers, which, of course, could accelerate DAWK's growth well in the 21st century.

We rate DAWK as a strong buy for aggressive micro-cap investors. We see little downside risk, while the upside potential could easily approach 200% - 400% during the next few years.

We intend to monitor DAWK for percentage gain performance.

Broker contact: Michael Chesler at 1-800-890-1629.

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