Value Microcaps Motherboard

[whyme2005]

HAUP $6.0...NEW DVRs in VISTA PLATFORM...TEAMED UP WITH REPLAY TV TO GO AFTER TIVO....


Profitable Co. growing at 20%/year.......cash rich.......no debt...trading at 0.6 P/S.......25c/share net income 9 months 2006.....only 4.5M shares in float.

Huge deal with Replay TV......new line-up of digital TV tuners will be released before the holidays.....record earnings in December....Lots of reasons for bullishness.

http://stockcharts.com/gallery/?haup

Replay TV and HAUP are teaming to go after TIVO. Replay TV provides the software and Hauppauge provides the hardware and additional software. Together they provide more flexibility and power than TIVO, including the use of mobile devices, and a fraction of the TIVO's cost.

Additionally, Replay TV has a strong presence in Asia and huge marketing power being part of a large conglomerate like D&M Holdings. All the hardware sales through Replay TV will require very little sales/marketing expense for HAUP.

There are rampant rumors going around that D&M Holdings, owner of Replay TV and other well-known consumer electronics brands could potentually acquire HAUP based on its acquisition history.

In an acquisition scenario, it is reasonable to believe that that HAUP could fetch form $15 to $20/share based on a conservative 1.5 to 2 times sales. HAUP is cash rich, has no debt, is growing, has tremendous products, and great and growing reputation.

Slide 37 of D&Ms presentation to investors shows D&Ms aquisition history. The slide shows that they've acquired Denon and Marantz in 2002; McIntosh in 2003; Replay TV in 2004; Boston Acosutics and Snell in 2005.....and then they have....NEXT????....hmmmm.

HAUP's deal with ReplayTV is a very big deal for HAUP whether or not an aquisition is in the picture....and it appears that it is also a BIG DEAL for D&M Holdings, a japanese multi-billion dollar conglomerate that owns Replay TV.

D&M focuses on the home media/entertainment segment.. D&M owns industry flagships such as Denon, Marantz, McIntosh, Boston Acoustics, Snell Acoustics, Escient, and Replay TV.

Replay TV is a big part of D&M current and future growth plans. So much so that D&M mentions Replay TV, and Hauppauge Digital, on page 34 entitled "Growth Opportunity" of its 58-page November 16, 2006 "FY2006 Interim Financial Results." Why would D&M mention this opportunity if it did not mean some serious growth potential?

Here is the link for D&M's PowerPoint presentation....look for "Latest Presentations" in the middle of the page.

http://www.dm-holdings.com/eng/ir/

Now take a look at Replay TV's website....look for the title "How do I Control it?".....and you'll see Hauppauge's name prominently displayed.

http://www.replaytv.com/tv_on_my_pc.asp


Expected HAUP catalysts for the next few weeks:

* HAUP usually unveils several new products at this time of the year. A product release a year ago lifted the stock 50%.

* 4Q 2006 and FY 2006 earnings to be released in December will show a 20 - 30% year over year revenue increase. Net income reported for the first 9 months of 2006 is 25c/share, almost doubling the 14c/share reported for all of 2005.

* HAUP usually goes up big during the Consumer Electronics Show held yearly in early January in Las Vegas, Nevada.

* HAUP reports its biggest quarter of the year in February. The first quarter of every year reflects Holiday sales.

This year HAUP is stronger that ever:

- Highest revenue and net income in company history for first 9 months of 2006. Revenues of $76M in 9 months compared to $78M the previous year.

- 90c/share cash. Zero long term debt

- Many recent OEM deals with quality companies like Replay TV, Microsoft, etc.

- HAUP's product line-up is growing exponentially....in its most recent 10Q, the company stated: .."Our R&D departments in New York and Taiwan have been teaming together to deliver an impressive series of new products. Together, the R&D team is scheduled to introduce 20 new products in fiscal 2006."