Value Microcaps Motherboard

[jaybird249]

Updated SMTX Due Diligence Summary:
Based on financial metrics, SMTX:NASDAQ is the best buy on the NASDAQ NATIONAL MARKET IMO. SMTX operates in the Electronic Manufacturing Services (EMS) Sector, one of the bright spots in the technology sector.

SMTX has over $250 MILLION in annual sales and trades at a Price/Sales ratio of 0.14 compared to 0.64. http://finance.yahoo.com/q/co?s=SMTX

If SMTX traded at the Industry average PS ratio it would be a $11 stock.

With a trailing EBITDA of $12.4 million, SMTX is trading at a RIDICULOUS 2.3 x annual EBITDA. Most tech companies trade at 12-15 x EBITDA.

SMTX WAS A $100 STOCK IN 2000. The last time SMTX was profitable it reached $8 in 2003. The projected 2006 earnings are MUCH better than in 2003.

Simply put, the EMS sector is on fire. All of SMTX's competitors are reporting doube digit sales gains with robust profits due to rebounds in the telecom, networking and computing sectors.

Virtually every other EMS stock has risen dramatically over the last 6 months (SANM SIMC KTCC) SMTX is a laggard.

SMTX earned $.06 EPS in the Q1 2006, traditionally its weakest quarter. The next quarter should see a minimum of $.10 EPS due to seasonal strenghth and ramp up of production to meet new customer demand: "As expected, we utilized approximately $6.0 million in cash to finance our growth and higher level of activity at the end of the quarter", stated Jane Todd, Senior Vice President.

SMTX has only 14 Million shares outstanding and a 12 million float. GENERAL ELECTRIC AND MICROSOFT are major holders.

The SMTX CEO, John Caldwell is a turnaround legend. He took over GAC.TO around $1.50 and it was recently bought out at $12.

SMTX will report Q2 results by the end of July. In conclusion, SMTX represents a compelling investment opportunity: A profitable technology stock in the robust EMS sector trading at a huge discount to its peers. The disconnect between SMTX's performance and the share price WILL NOT LAST.