Value Microcaps Pick Six Lotto 15

[gilead23]

NSOM challenge picks

DGSE - Company sells bullion, jewelry and coins. There isn't much to like in their last couple earnings reports however I picked it for 2 reasons. The first was a pending settlement of debt which has now happened. They will eliminate about 11 million in debt from their balance sheet and presumably record a large one time gain. The second reason is the company is suggesting they are going to have a blowout quarter with revenues in the 30 million plus range which is about a 70% sequential increase and should result in EPS of between .10 and .20 depending on margins. Looks like a bargain in the 2's.

SYBR - Interesting case here. Its cheap on the surface in terms of earnings trading around .80 with eps of .04 and .05 the last 2 quarters. I added this one on a speculative bet. The company is rolling out a Paula Deen cake mix line and I noticed their inventory levels doubled this quarter to the highest I think they have ever been. I am speculating that buildup is for a wide rollout and that you could see a significant sequential increase in sales and EPS. If not its still cheap trading at a forward PE of about 4.

SMTX - EMS provider. The story is pretty well known but they have earnings momentum with .14 in eps last quarter and their outlook is strong. It looks cheap trading in the mid-3's and I see it as a victim of overzealous tech selling

KLIC - EPS of .28 last quarter but the company is guiding for a massive revenue increase in the current quarter. Analyst estimates are for .55 next Q which seems in the ballpark given their revenue guidance. Anything like that should send the stock upwards from its current 7.00 price unless there are signs tech spending is collapsing.

PNS - Another tech play. The company manufactures electronic components and provides repair services. They have put together 2 nice quarters if you take away one times from a couple quarters back. They earned .04 in the latest quarter against a 1.05 price. The company is suggesting the outlook is also strong with an expectation for improving results.

TORM - Company primarily manufactures Titanium Dioxide but also some other coating products. They earned .28 last quarter but they see huge operating leverage as revenues increase. The company seems to think they will see additional sequential increases this quarter. In addition competitors in the TIO2 market have been raising prices with several increases this year. If similar increases happen at TORM as I would expect there should be significant EPS gains in the coming quarter. The company also trades at a significant discount to tangible book value of about 12.00 a share. EPS of .50 in the current quarter is not out of the realm of possibility which I think would send this 7.00 stock well into double digits.