OracleTrading

[MikeDDKing]

DAAT is one of my latest picks that I think will have a 75-100% move over the next 6-9 months. They are guiding for net profits of between $0.11 and $0.13/share for 2008. Also, they were impacted by devaluation of the US Dollar and by rising commodity prices. Since these trends have reversed I think that they have a good chance of exceeding guidance. They last traded at $0.74/share and I think could trade over $1.50 when their annual report comes out. DAAT makes a variety of gun accessories and household products. Here is some more DD:

DAAT BOARD
http://investorshub.advfn.com/boards/board.aspx?board_id=3270



COMPANY DESCRIPTION
DAC Technologies Group International, Inc. is an outsource manufacturer of high quality, reasonably priced security safes, gunlocks, gun cleaning kits, sporting goods, household cleaning products and various hardware items. DAC distributes its products through mass merchandisers such as Wal-Mart and Kmart, and sporting goods retailers and distributors such as Cabela's, Acusport, Jerry's, RSR, Maurice, Academy Sports, Sports Authority and others. DAC also provides gunlocks to OEM gun manufacturers such as Glock, SigArms, Savage, Marlin, Weatherby, as well as others. Also, DAC's products are distributed through catalog companies.

INVESTMENT THESIS
1. Strong Guidance - DAAT had strong guidance in their Q2 press release. They stated: "We expect annual sales for 2008 of between $16,000,000 and $18,000,000, and net profits between eleven and thirteen cents per share." Their guidance indicates significant growth from 2007 when they had revenue of $14.8M and EPS of $0.06. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31520889

2. Possible Expanding Margins - The company stated the following in the Q2 press release on August 15th: "The Company's gross margin in the second quarter was affected by the tremendous increase in commodity prices, increases in container shipping prices from China, and the devaluation of the US dollar versus the Chinese RMB. This trend now seems to be reversing itself as commodity prices have dropped from their highs in May/June by an average of 20%. The US dollar is showing strength and stabilizing against the Chinese currency. The price of oil has dropped significantly and we are hopeful that shipping expenses will stabilize or be reduced." Since this time commodity prices have continued to drop and the US dollar continued to strengthen. Likely gross margin is expanding beyond their expectations.

3. Strong Balance Sheet - The book value is $0.79/share and they have no debt.

4. Growing Wal-Mart Sales - DAAT sells a significant amount of their product at Wal-Mart. Wal*Mart sales have been growing which bodes well for DAAT. Here is an article on Wal-Mart's growing same store sales for August 2008: http://biz.yahoo.com/ap/080904/wal_mart_sales.html?.v=2

5. Outstanding Share Structure - As of August 5, 2008, 6,323,364 shares of Common Stock are issued and 6,032,899 are outstanding. There are no options outstanding and 393,901 warrants. The warrants have an average exercise price of $2.57 and expire on June 29, 2009. Because the warrants are significantly above the current price they will likely not come into play.

Charts


Mike