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Technology Stocks : Digital Ally Inc. - DGLY

DGLY 1.550

-1.4%

3:59 PM EST

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From: MikeS97707	4/30/2008 3:01:39 PM
	of 554

I was quite impressed with the DGLY results and CC today. I wish I hadn't sold out a few months back but hindsight is 20-20. I picked up a small position today at $9.38 and will look to add on weakness. Some key points from the CC: - They are sticking to their guidance. Based upon their comments it is hard to say where Q2 results will end out. My guess is that they will be flatish or even slightly down as compared to Q1. I'll also add that the CEO seems to be trying to under promise and over deliver so I may be pleasantly surprised. I think Q3 and Q4 will both show significant growth from Q1. I expect Q4 earnings to be in the $0.15-$0.20 range. I expect growth to continue into 2009. - They are coming out with a new product called the DVM-250. It is a defeatured version of their police product that is targeted at the taxi market and other markets. They plan on releasing the product tomorrow at the annual shareholder meeting. They haven't selected a price for the product but competitors have products in the $1200-$1500 range. So far competitors have sold 70K units of competitive products. - The school bus and mass transit product may be released late in Q2. This is another good size market. - The helmet video product for motorcycle police is delayed because they decided that the DVM-250 is a more important product. That IMO is a smart move. - There were lots of analysts on the call. Oberweis was even on the call. Oberweis is one of the bigger small cap firms. Oberweis was asking lots of questions. Near as I can tell, Oberweis did not own shares as of 12/31/07. I suspect they either started accumulating or will start accumulating. - They are up to 1700 customers on the DVM-500. Total DVM-500 units shipped to date is roughly 8,000. Each customer has roughly 25 cars but they have only sold an average of 4.7 cars/customer so far. - Arkansas has reordered but they haven't issued a PR yet. - The flashlight product is not expected to contribute much in the first half and is expected to contribute much more in in the second half. Their guidance assumes that 5% of their $40M in revenue will be for flashlight sales. That figures out to $2M in flashlight sales for 2008. - 50% of police vehicles don't even have video recording capabilities (analog or digital) yet. For now my position is small because Q2 may be weak. However, I fully expect that DGLY will hit the IBD over $15 list within the next 12 months. I'll be watching it closely to potentially add to my holdings. I need to listen to the CC again. What I have written in this post is only the key points that I heard in the call. There was a ton of information provided that makes it worth a second listen. Mike

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