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Microcap & Penny Stocks : Short Term Picks From the 'Whiz' Kid -- Ignore unavailable to you. Want to Upgrade?

To: Mr Metals who wrote (7736)	8/12/1999 10:33:00 AM
From: Daniel Miller	Read Replies (2) \| Respond to of 9115

My pick is..... My pick is PENC. News expected after hours today. I am only recommending this SHORT-TERM. If you hold long term it was not my advice. Remember take profits along the way, but if you see that the stock is making a good run you may want to hold onto it for the long run. Also for the news and earnings early next week. More news to follow next week. I believe Wen. There are other newsletter sending this pick out also. >Company Profile >OTC BB: PENC >Pen Interconnect >Pen Interconnect, Inc. provides the total manufacturing solution including >circuit design, board design from schematics, mechanical and product >design, >prototype assembly, volume board assembly, system services and end-user >distribution. Pen Interconnect, Inc. has support manufacturing facilities >in >California, Utah and China. For information on the Company's product data, >Web site - <A >HREF="http://www.pen-interconnect.com">http://www.pen-interconnect.com > >PENC has recently been as high as $7/share and $2.50 majority of this year. >After the divestiture of two non-core divisions in early 1999, (Cable assembly and Moto- Sat), they began focusing on circuit board assembly contract manufacturing, >and power supply and battery charger design which are showing internal growth rates in excess of>50% >on a quarterly basis. Valuing the company on >circuit board assembly/contract manufacturing should produce a $.20-25/sh eps run rate by the >end of next year. That's using a $36 million sales run rate and a 4% after >tax profit margin. These seem conservative estimates. That would imply at >least a $2-2.5/sh stock price using a 10X eps multiple. With the recently announced >TransDigital merger and their related contracts, the sales rate goes to >over >$44 million (assume $8 million of orders) and the stock is worth a lot >more. >With the stock hovering less than $1 it seems an excellent risk/reward >ratio >at this time. > >The company will be issuing a Press Release soon about an additional >$500k of contracts going to their Power stream division in Utah. There is also some rumblings about some sort of new acquisition which could increase revenues by about $5 million. Their Transdigital merger has not been going too well from what I have heard so they may turn it into a joint venture, which will help the company anyways. PENC had a conversion done awhile back for about 2.5 million $ worth. The shares are tightly held by a few major shareholders of Pen and are not much of a worry as of now. There backlog is over >$16M. Current advertising campaign will attempt to create a solid base >well >over the $1 mark making it eligible for future NASDAQ status(Pen was up until last March listed on the NMS of NASDAQ and have an appeal in the process). PENC is >fully >reporting and has complied with all SEC regulations. They will be filing >their 10-Q between this Friday Aug 13 to Tuesday Aug 17th and look to be >extremely promising. Preliminary projections show revenue of $5.1M, up >over >78% over prior quarter - a quarter in which the stock price was significantly >higher. > >Several acquisitions and Press Releases for new orders are expected within >the next few weeks.