Our #1 stock for 08 is ADG- must own- we first recommended ADG on or about Sept 03 @ $4.50- see Sept 3rd email alert from www.saadvisory.com for complete story
We also favor, SIMC, BI, AFPC.OB, ABG.TO, CRLI.OB, PDGE.OB & PNP.TO
Jan 01, 2008
- Allied defense group (ADG) $5.77. As mentioned earlier in this email- this is our #1 stock pick for 2008! A pure military related issue that has been overlooked ( see past Nov and Sept email alerts for complete overview and our strong buy rating) the company has completed a re- structuring and now has a huge cash horde, less debt, 45 month backlog, trading near 52 wk low, a huge Nol, has been the perfect tax selling candidate and should easily reach revenue for 2008 of at least $140 million and net income/per share of .75! The recent events in Pakistan should remind us of the dangers that exist in this crazy world called earth! We believe that ADG looks like a juicy takeover candidate as well! Management has also been buying the stock on the open market- even though it was a small buy- the president of the corporation knows best! We anticipate many more contracts and "new' business and another sub will be sold very soon with a possible cash dividend and or stock buy back program instituted! We are very heavy in this stock and so should you! Bang ! Bang! Bank! Bank!
- Simclar, inc. (SIMC) $4.65. A contract manufacturer of electronic and em products. SIMC missed the 3rd q and the stock got slammed and then minced from $14.25 to present 52 wk lows and of course a tax selling candidate. For the nine months rev was $101 mil and net/share was .38--we think SIMC is over sold with only 6.5 million shares fully diluted outstanding. We sold 1/2 position @ $11.24-- see Nov 6th email alert for sale information! At these levels SIMC could also be a takeover candidate when you consider that it is only trading with a PSR of around .23--interesting how the garbage of some is the gold of others!
- Bell industries inc. (BI) .90 a diverse company that has recently re- invented itself-- most recent acquisition "sky tel corp" from Verizon. Rev for the year ending 2007 should equal around $200 mil up from $120 mil. Shows a loss, but anticipate a turn-around in 2008. With only 8.6 mil shares outstanding and a "new" deep pocket fund that recent bellied up to the bar with a $30 mil line--we see attractive upside potential - trading near 22 year low!!!!! Trading below stated BK with an est. PSR for 07 of .04---a must own at these levels!
- AFP imaging corp. (AFPC.OB) .65 -- dental imaging company with 'new' technology- cone beam ct x-ray scanners- allowing for 3d digital radiographic image of the patient's teeth and jaw-- cutting edge technology. Trading @ 52 wk low because cash hungry fund liquidating position that it bought during early 07 at around $1.80/sh-- fund lost 40% during 07 on poor investments so it need $$$ for redemption. Market-cap currently smaller than the rev of recent acquisition!! Another tax selling candidate that deserves a hit of "gas"! Est. PSR for fiscal 08 ending June 30th yields minimum .39 valuation. First q always a loss recently reported. We look for big things from this company long term. We first recommended AFPC.OB as a stock pick of the year 4-5 years ago @ .10- the stock then ran to $3.00 during 06! We like it at current levels and have been adding to our position. We have known the pres. For about 15 years and appreciate his dedication, ethics and honesty.
- Arawak Energy Corp (ABG.TO) CDN $ 2.45. The company is engaged in the exploration, development and production of oil and gas in Kazahstan, Russia and Azerbaijan. This is a must own oil and gas stock with enormous upside potential during the next few years if of course someone doesn't grab them before hand!! Trading near 52 wk low and another tax selling candidate that should bounce early in 08-- oil is close to $100.00/barrel!!!! Currently producing 11k BOEPD- according to management-- 41k by 2010--a real gusher that has not gushed yet! We still like all the oils--KAZ, IEC.L, UEN.L, SBE.L, AXC.TO AND CALVALLEY PETRO CVI-A.TO!
- Circuit Research Labs, Inc. (CRLI.OB) .29 develops and manufactures audio processing, transmission encoding and noise reduction equipment for the radio, TV, internet and cable markets worldwide. Market-cap equals R&D expense( around $2 mil/yr), management bought back huge debt and shares, new products, record backlog and consolidated operations for additional savings. Trading @ 52 wk low and once again a tax selling candidate. Company also has a .93/sh nol- which could be very valuable in a merger--also will not be paying taxes for a very long time! We have also chosen CRLI.OB for our mini- micro-cap stock pick for 08 to appear within Dick Davis Digest during mid Jan 08!
- PDG-Environmental Inc. (PDGE.OB) .59 a leading provider of specialty contracting services. Trading @ 4 year low, rev growth by 20% and BK around .65--small losses for fiscal 08 and est. PSR for yr yields a value of .12- based upon rev of $100 mil for Jan 08 year-end. Another tax selling candidate that deserve a valid consideration for fiscal 09.
- Pinetree Capital Ltd. (PNP.TO) CDN $4.26 a mutual of sorts that focuses on the small cap market. The primary investments are in the resource sector: uranium, oil and gas, precious metals & base metals and molybdenum. PNP.TO trading down from lofty levels of CDN $16/sh during 2007. A great way to play the resource sector with one bet yielding ample diversification among junior exploration, developmental and producing companies mostly within resource rich Canada. Trading @ 52 wk low because of heavy tax selling and of course the momentum players have moved to greener pastures, but we find PNP.TO at current levels offering us the opportunity to make a lot greenbacks. PNP.TO in our opinion is a must own @ current levels if you believe in higher gold, oil and uranium long term!!
Other Stuff To Mull Over While Hung Over!
We are bullish towards a few other opportunities:
AWRCF.PK--asleep for now- still hold large position. Recom. @ $1.00 now $5.20
PAL/ WS --PAL ($3.69)) just issued warrants (.65) - great leverage --common down from high of $12.36 now $3.69--2 year warrant-- palladium could be the big surprise for 08.
NLR.L-53 pence - our only internet gaming stock-looks cheap down here-management first class.
ETEC.OB --(.75)-- we continue to hate this stock because it has been a dog for years-- maybe this year--large contracts starting to hit!
DSCI.OB ($1.30)- a recent runner--wound therapy that is turning many heads- institutional interest- recent media via print and tv has not 'hurt" either!
ZOOM-.65---it just might zoooom from 52 wk levels
We have not been paid by any of the listed investments within this email.. We may buy, sell and or hold positions at our discretion.
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