Value Microcaps Free-For-All

[Marvelmeister2002]

WLSA could be a ZipCodeChanger.

Below is a quick overview of the investing thesis here, as I see it:

WLSA has been working through significant selling pressure the last few weeks (some of it was tax loss selling) which artificially depressed the stock price. I believe that this has created a very strong buying opportunity.

Simmonds may buy more shares personally in the next couple of weeks. I feel that he will, simply because he promised more insider buying during the last two conference calls. The last time he bought, the stock popped about $.40 in a day (from about $1.30-$1.70, if memory serves). I think it's reasonable to expect at least a .20 pop from a second round of insider buying. With any luck, that takes us over $1. Of course, it's possible that further insider buying won't materialize. But I think highly of Simmonds, and expect him to keep his word.

Over the intermediate/long term, I see no reason to think that WLSA won't be a huge winner. The recent news flow from the company has been encouraging: (http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=7076888&tid=hrc&sid=7076....
http://news.moneycentral.msn.com/ticker/article.asp?Feed=BW&Date=20050105&ID=4172054&Sym....

And, overall, I just see a lot to like here. CEO Simmonds has a tremendous track record (http://www.wireless-age.net/investor/corp_profile/ ) and I expect him to create huge profits for WLSA shareholders, time given, as he has always done in the past. Financials have been solid and improving. And the company expects at least 85 million in revenues for 2006. http://www.thewirelessage.com/i_default.asp . Keep in mind that this forecast assumes nothing from the disposable cellular phone initiative, which has promise: http://www.thewirelessage.com/extras/Cyclone_Phones_files/frame.htm. That's tremendous growth. And not just top line growth either. EBITDA margins will be at least 10%, once the company hits critical mass (which happens at about 50-million in revenues) So we're talking roughly $9 million in EBITDA for 2006, conservatively speaking. And the o/s won't be greater than 33 million, per Simmonds' conference call comments. That gives us a projection of about $.28 EBITDA for 2006. That's exceptional for a .79 stock with excellent growth prospects.

I still expect Simmonds to do here what he always does- engineer a buyout within a couple of years, for a very large premium to the current price (likely $4-plus), and to see steady gains along the way as financials become increasingly impressive and WLSA emerges from obscurity (the stock is still virtually unknown). The tipping point in terms of exposure will be when WLSA makes the jump to AMEX. I think that this will probably happen sometime in 2005, and I expect the stock to top $2 when it does.

Don't forget that Simmonds bought 400k shares at $1.50 earlier this year. He's going to make money on that purchase (imho), and probably a lot of it.
Meister