Value Microcaps Motherboard

[whyme2005]

EXXA $2.19 up 7c. Blue Skies Above $2.25. Radar it.

EXXA has the potential to become the next BOOM. Read the recent MONSTER news about this profitable company, with only 4.7 M shares on the float, and currently trading at a ridiculous 0.16 P/S.

http://finance.yahoo.com/q/h?s=exx-a


6/28/05...Fortune Magazine ranks EXXA as No. 1 in revenue growth, and 8th overall, among America's fastest growing companies.

http://www.fortune.com/fortune/fsb100/topperformers

NOTE: The numbers used in the Fortune study do not include last month's $40 million/year DaimlerChrysler contract announcements.


6/17/05. DaimlerChrysler (DCX) awarded a second large multi-year powertrain contract worth about $15M/year in revenues to Newcor Inc., a 99% owned EXXA subsidiary. Full production will begin in the 3rd quarter which already started on July 1.

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


5/9/05. DaimlerChrysler (DCX) awarded a Newcor Subsidiary a contract worth about $25M/year in revenues for two new powertrain programs. Production has started in May during the 2nd quarter ended June 30.

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


DaimlerChrysler is now Exx Inc.'s largest customer. 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!

I expect that EXXA will report several double-digit-income quarters, starting with 2Q 2005 which is coming up shortly. My estimate for FY 2005 is 40 - 50c/year net income on about $150M in revenues. This includes the 4c/net income EXXA reported in 1Q 2005.

My estimate for 2006 is 50 to 80c/share net income on revenues of $160 to $180 million. A wide range because there are a lot of uncertainties.

EXXA's float of 4.7 million shares lends itself for a monster breakout after a monster quarter, or two. EXXA has gained 300% in one day before after a solid quarter at a time when the whole market was down during the height of the Iraq war, and when investor confidence was at an all-time low. This time is different, we are in a bull market, EXXA has gained a lot more visibility since then (the Fortune article, the DCX contracts), the love affair with profitable low-floaters is at an all-time high, and EXXA has cut its long-term debt in half in less than 2 years to little over $20 million.

Having loyal/dependable DaimlerChrysler at the cornerstone of its customer base is a tremendous intangible. People on the industry know that DCX does a tremendous amount of DD before entering into multi-year agreements with outsourcing companies. DCX wants/demands that critical-componet suppliers be in business for a long time. EXXA's Newcor division has been in business for over 30 years.

EXXA has the production capability to produce all the powertrains required by DCX. In fact, EXXA was planning on shutting down some facilities later this year because one of its customers, American AXLE, will start producing some of its components starting in 3Q 2005. This means that EXXA already has the infrastructure to produce the DCX parts. EXXA announced in August of 2004 that the AXLE exit will be gradual throughout 2006. EXXA went down hard after the announcement of the AXLE pullout. The nex DCX business will exceed the AXLE business lost by about 50%. This means that EXXA will be stronger than ever before.


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 = $24MILLION
* 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

MORE ON NEWCOR:

Newcor was founded in 1933 as National Electric Welding Machines Company and changed its name to Newcor in 1969. On January 31, 2003 the company was purchased by Exx Inc. (AMEX: EXX.A.... EXX/A in Scottrade's order entry form).

Newcor, Inc., 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. a publicly held company traded on the American Stock Exchange under the symbol EXX.A and EXX.B.

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. The following link describes some of Bay City Automotive-componet development and production capabilities..http://www.baycity.newcor.com/autocomp.htm

Always do your DD