Value Microcaps Motherboard

[whyme2005]

EXXA $1.92: DaimlerChrysler Becomes EXXA's Largest Customer.

EXXA was AMEX's 4th largest % price gainer on Friday. My target price is $30/share plus within a year.

DaimlerChrysler has awarded Exx Inc. (AMEX: EXX.A or EXXA) two major contracts within a month. The combined revenue from these contracts exceeds $40 million/year.....or twice the current market cap of this unbelievably undervalued company!!.

DaimlerChrysler (DCX) has now become EXXA's largest customer (about 25 % of the total projected $160M - $180M/year EXXA revenues in 2005/2006).

EXXA announced on (6/17/05) a second major powertrain contract from DaimlerChrysler (DCX). This contract is for about $15 million/year.

http://biz.yahoo.com/prnews/050617/daf007.html?.v=14

Last month DCX awarded EXXA its largest contract ever, a $25M/year multi-year commitment for two powertrain programs.

http://biz.yahoo.com/prnews/050509/dam061.html?.v=4

EXXA could easily become the next BOOM, IPII, or HURC (same sector as EXXA). EXXA's symbol is EXX/A in Scottrade and EXX.A in other platforms. Mention Exx Inc. to your broker so that he/she can find the symbol and place an order for you if you have problems.

Two years ago EXXA was trading in the $6 plus area. In August of 2004, EXXA announced that it was losing a significant customer (American Axle) starting on 3Q of 2005. Although the AXLE exit would be gradual, it would materially affect the company's financial results for the foreseeable future. The pps started to drop after that announcement and has never recovered...until now.

The two new DCX contracts exceed by a mile the AXLE business leaving starting in 3Q of 2005 and continuing gradually throughout 2006.

I expect net income to exceed 10c/share and revenue at or above $40M in 2Q 2005. Revenue and income will likely be even higher in subsequent quarters because of the overlap caused by a rapid ramp up in production for DCX's powertrains and a slow and gradual exit by AXLE.

EXXA is a low-floater and the few available shares are held very tightly. You almost invariably have to pay for them at the ask.

EXXA's liquidity will likely increase sharply as it shocks the street with mind-boggling financial performance for a company with about $20 Million market cap.


EXXA HIGHLIGHTS:

* LOW FLOAT = 4.7 MILLION SHARES
* 2004 REVENUES = $143 MILLION
* 2004 NET INCOME = $1.5 MILLION
* O/S SHARES = 11.3 MILLION
* MARKET CAP = $20MILLION
* HEAVY INSIDER BUYING. INSIDERS OWN 54% OF COMPANY.
* Long Term Debt HAS BEEN CUT IN HALF IN 4 QUARTERS TO LITTLE OVER $20M.
* SHAREHOLDERS' EQUITY IS A HEALTHY $1.8/SHARE


BACKGROUND:


--- The DaimlerChrysler deals completely replace (and actually exceed) the business lost from American AXLE announced in August of 2004 (reason for pps decline that started soon thereafter).

--- EXXA is starting to manufacture parts for DCX in this second quarter of 2005 ramping up to full production by 4Q 2005.

--- American AXLE will start manufacturing some its own parts in 3Q 2005 and will conduct an orderly and greadual transition throughout 2006.

--- The overlap caused by a fast ramp to full production for DailerChrysler parts, and the gradual pull out by American AXLE will cause EXXA to generate record revenues and net income for several quarters to come.


ABOUT EXX Inc.

Newcor Inc., EXX.A's largest subsidiary operates seven companies employing over 1,000 people in virtually all areas of design, engineering, and manufacturing of a variety of products, principally for the automotive, heavy-duty, agricultural and industrial markets.

Newcor focuses in two areas: precision machined components and molded rubber and plastic products. Newcor reports its businesses under two product segments: Precision Machined Products and Rubber and Plastic Products. Newcor also operates the Bay City Division, which designs and builds state-of-art welding and forming equipment.

Always do your DD.