Value Microcaps Motherboard

[whyme2005]

EXXA $2.0..FORTUNE MAG: EXXA IS AMERICA'S 8TH FASTEST GROWING COMMPANY.

Fortune Magazine just named EXXA as No. 8 among America's fastest growing companies....and that does not include last month's $40 million/year DaimlerChrysler contract announcement:

http://www.fortune.com/fortune/articles/0%2C15114%2C1075252%2C00.html?promoid=marketwatch

DaimlerChrysler (DCX) this month has become Exx Inc.'s largest customer after recently awarding two Newcor Divisions three large multi-year powertrain contracts.

Exx inc. (AMEX: EXXA or EXX/A) owns 99% of Newcor, Inc., which in turn owns several divisions employing over 1000 people worldwide in all areas of design, engineering, and manufacturing of a variety of products, principally for the automotive, heavy-duty, agricultural, industrial, and defense markets.

The combined revenue from the DCX contracts will exceed $40 million/year...or twice the current market cap of this unbelievably undervalued company. DaimlerChrysler's contracts will represent about 25 % of the total projected $160M - $180M/year EXXA revenues in 2005/2006. EXXA's market cap in contrast is only $22 million!

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 and continuing gradually throughout 2006.

EXXA warned that the loss of business from AXLE 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 three new DCX contracts will exceed the AXLE business lost according to the most recent EXXA/DCX contract announcement (FYI, 10% of EXXA's revenues correspond to about $15 million/year):

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

In May 2005, DCX awarded a Newcor subsidiary its largest contract ever, a $25M/year multi-year commitment for two powertrain programs.

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

According to this announcement, Newcor began production of DCX parts during 2Q 2005. This means that EXXA will likely report improved revenue and net income numbers in 2Q 2005 next month. EXXA should easily exceed the 4c/share reported in 1Q 2005

Revenue and income will likely be much higher in subsequent quarters because there will be an overlap in the production of DCX and AXLE parts. This is because:

--- Newcor has begun manufacturing DCX powertrains in 2Q 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.

I expect that EXXA will report over $160M and earn over 40c/share in 2005. 2006 will be a monster year for EXXA IMO.

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 after the 2Q earnings are announced next month. The investors' love affair with low-float profitable companies is a hot as ever.

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 = $22MILLION
* 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


My target price is $30+ within a year. Do your own DD..............


ABOUT Newcor Inc.

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