Value Microcaps Motherboard

[whyme2005]

SIMC $5.58..Great swing trade...even better long-term hold. Updated DD

SIMC, with only 1.7M shares on the float, is growing profitably at a phenomenal rate.....and it is just a matter of time until it reaches its fair value of $10 - $20/share.

Consider SIMC's financial performance:


* FY 2005 revenues: $61M....vs. $110M FY 2006 Estimated Revenues.......Up 90+%!!!!

* FY 2005 Net Income: $950K or 15c/sh... vs....Estimated $2.5M YF 2006 Net Income or 40c+/sh....Up 250%!!!

* 4Q 2005 Rev: $18M....vs.....Estimated 4Q 2006 Revenues of $31M......Up 70%+

* 4Q 2005 Net Income: $192K or 3c/share...vs....Est. 4Q 2006 Net Income of $650K..10c/share.....300% increase!!!


The link below shows SIMC's consistent growth the last several quarters...both in revenues and net income.

http://finance.yahoo.com/q/is?s=SIMC

SIMC with only 6.5 million total outstanding shares and a tiny 1.7M share float should be trading in the $10 - $20 range. SIMC was trading in that range until August when it announced that it had to restate 2005 earnings to make certain adjustments. SIMC bounced from the low $4's to over $9 in mid October after announcing a strong quarterly results and later announcing that it meet all Nasdaq'd listing requirements.

http://stockcharts.com/charts/gallery.html?simc

The stock has been drifting lower since November on very low volume and apparently because investors do not expect news until the 4Q ends on December 31. Buying interest has increased in this week and it is likely that a breakout will occur any day now. Once SIMC delivers one of two more back to back blockbuster quarters like its has recently, it will leave the under $10 range for good.

SIMC is not shy about issuing preannouncements. The last time the preannounced strong quarterly results the stock went up 75%. With only 1.6M shares on the float, a 50% - 100% increase in a day is not out of the question. SIMC's fiscal 2006 ends December 31, 2006. It is very possible that SIMC could issue a preannouncemet in early January bragging about its stellar financial results for 2006. When and if that happens, you can rest assured that the PPS will jump to $10+. Regardless of a preannouncement, I expect that SIMC will surge in January due to the "January effect" and strong 2006 results.

Even Cramer is fond of and well aware of SIMC's potential.....he recently wrote:

......"I've locked in some partial profits on positions that have good strength this morning and added to positions such as Micronetics Wireless (NOIZ:Nasdaq) and Simclar (SIMC:Nasdaq). The market action looks fine, but I'm keeping my time frames short and am willing to do some flipping....."

SIMC has been growing through acquisitions which mesh very well with its ongoing operations and help it diversify into profitable areas. SIMC has done an amazing job at quickly integrating these new acquisitions without causing disruptions to its profitable reputation.

SIMC's most recent aquisition was the purchase of Litton Interconnect from Northrop Grunman. Litton Interconnect is a world-leading supplier of high-performance backplane interconnect solutions to major blue-chip customers in markets as diverse as network, wireline and wireless infrastructure, defense and electronic data processing. Backplane interconnect systems form the core of high-end electronic systems and provide the means for power distribution and data communications between electronic sub-system building blocks. Adding the ability to provide backplane interconnect solutions with SIMC's metal fabrication, cable and harness, printed circuit board, and high level assembly capabilities enables Simclar to offer a highly appealing single-source solution to the electronics OEM market.

Worldwide, SIMC operates 16 manufacturing plants in China, Singapore, Mexico, Scottland, and several plants in the United States. With this diverse array of plants and hundreds of established companies in the the data processing, telecommunications, aerospace, defense, national security, instrumentation and food preparation equipment industries, SIMC is not dependent on a location, a large customer, or a specific industry to deliver consitently profitable quarters.

+++++SIMC INVESTMENT HIGHLIGHTS:

* 1.6 Million Shares in Float
* Profitable in 9 of 10 years (2001 was the exception)
* 2006 9-month net income is 30c/share compared to 12c/share in 2005
* 2006 9-month revenues of over $80million....over 90% increase compared to $43M in 2005
* Market Cap only $36 million
* 2004 P/E = 12
* P/S = 0.3
* Insiders own 75% of the company.


About Simclar:

Simclar, Inc. (Nasdaq: SIMC) is a contract manufacturer of electronic and electro-mechanical products. The Company's products are manufactured to customer specifications and designed for original equipment manufacturers (OEMs) and distributors in the data processing, telecommunications, aerospace, defense, national security, instrumentation and food preparation equipment industries. Simclar's principal custom-designed products include complex printed circuit boards (PCBs), conventional and molded cables, wire harnesses and electro-mechanical assemblies. In addition, the Company provides OEMs with value-added, turnkey contract manufacturing services and total systems assembly and integration. It also delivers manufacturing and test engineering services and materials management, with flexible and service-oriented manufacturing and assembly services for its customers' high-tech and rapidly changing products. ..


DO YOUR DD!!