iHUB MVPs

[Ben Bernanke]

SAPX DD

BY DAMNGOOD PICKS

Good Morning!

And I hope you're ready to rock with SAPX! This is my follow up email to the one issued last night.

What if I told you there is a company on the NASDAQ right now that is trading at about 1/5 its book value? That would be amazing right? I simply couldn’t wait any longer. I’ve been scouring the screens and message boards looking for a company that isn’t just undervalued, it’s dirt-cheap. SUCCESS!

Introducing: Seven Arts Pictures PLC (NASDAQ: SAPX)

Before we get into the meaty stuff, allow me to tell you about the company:

Seven Arts Pictures is an independent motion picture production company engaged in developing, financing, producing and licensing theatrical motion pictures with budgets in the range of $2 million to $15 million for exhibition in domestic (i.e., the United States and Canada) and foreign theatrical markets and for subsequent post- theatrical worldwide release in other forms of media, including DVD, home video, pay-per-view, and free television. The Company endeavors to release many of its motion pictures into wide-theatrical exhibition initially; however, certain of the motion pictures will either receive only a limited theatrical release, or may even be released directly to post theatrical markets, primarily DVD. Those pictures that receive either a limited theatrical release or a post theatrical release typically benefit from lower prints and advertising ("P & A") costs and, in turn, may enjoy greater gross profit margins.

In case you missed it, SAPX was the stock to watch in the summer of 2011. This thing ripped from $0.90 (ninety cents) all the way up to $5.75 in a matter of a few days.

Since then the company has removed over $10M of debt off the books (http://7artspictures.com/news/view/69). If you review the link you will see that SAPX is trading at a fraction of what the real book value is!

The company’s book value is at around $18,000,000 and if you divide that by the number of outstanding shares (32M) you will see that this company is trading dirt-cheap right now. It’s actually trading for 1/5 it’s book value! http://7artspictures.com/news/view/69

Shares for this company should be trading for at least .55!

Let’s leave the financials behind for a minute. SAPX is in a great position as we look forward to the rest of the year.

Why?

One man is the reason: DMX. DMX is a multi-Platinum American rapper and actor. Earlier this year SAPX acquired all of the assets of United Music and Media Group and they released news in November that with that comes two unreleased albums by the artist. This is great news because DMX is a proven industry winner. He is the only artist in the history of The Billboard 200 to reach No. 1 with his first five albums!

Just how much money can a proven artist make the company that owns their rights? Soundscan reports that DMX’s music has pulled in over $140 million over his career and that each album averages just over $35 million in revenues each.

DMX, whose real name is Earl Simmons, has his upcoming album set to release on August 26 of this year and it will feature guest appearances by Busta Rhymes, Tyrese, Jennifer Hudson and other heavy hitters in the hip-hop/rap and R&B scene.

Now, I’m not going to act like DMX hasn’t been gone for a few years. That’d be a lie. However, I’m not going to pretend that interest in his music has faded one bit. Check out this link to his song “Already” which will be on this album. It was never released on an album and the unofficial “release” put up on YouTube has generated significant interest with over 2 million views -

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Not only is that video getting views, but DMX was recently at LIV Nightclub on South Beach and was on stage with Lil’ Wayne and the crowd WENT NUTS. Check it out!

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And let’s not forget what SAPX has been focusing on for the past few years – movies. Independent movies have been growing exponentially over the past few years. Independent films are gaining much more focus from larger studios given the lower budgets and high potential for success. Lions Gate Entertainment recently announced the acquisition of Summit Entertainment for a whopping $412.5 Million in cash and stock. http://blogs.barrons.com/stockstowatchtoday/2012/01/13/lions-gate-buying-summit-entertainment-for-412-5-million/?mod=yahoobarrons

With government incentives at the state level allowing more productions to get financed, this effect is trickling down into the independent filmmaking industry. Technology has given independent filmmakers unparalleled opportunities to break into the industry and allowing films to be produced much cheaper, with greater efficiency, and more scalable to any budget, giving more margins to smaller films and making independent films attractive to larger studios. http://www.nytimes.com/2012/01/14/business/lions-gate-to-buy-summit-entertainment.html

In a 100 billion dollar film industry, independent films are growing rapidly to make up more of the films produced, and companies like SAPX are in a unique position to leverage those trends into big gains for investors, as evidenced by their past successes as well as the current momentum leading up to a very promising future.

Later this year SAPX is set to begin filming the movie Neuromancer which will star Bruce Willis. This movie is based upon the 1984 novel by William Gibson, a cult classic and the godfather of the cyberpunk genre.

Neuromancer has a budget of $60 million and the buzz is already out there and people are chomping at the bits for a trailer! William Gibson is best known for coining the phrase "cyberspace."

SAPX has it all: revenue, low debt, real product placement, and celebrity affiliations! How often do you receive an alert with all of the above? Not to mention this company is on the NASDAQ! Let’s not forget that this company is currently trading at ONE-FIFTH THE BOOK VALUE.

This alert is not like our others. While I think this one is an excellent company to day-trade, I also think that this company is an ideal one to hold on to at least until the summer. This company has an incredibly sexy story so I feel much more comfortable holding on to this one versus a Pinksheet company.





I think SAPX could flirt with .20 within a few days. What I’m really looking forward to is the summer as the DMX album drops. I think we will see these shares skyrocket above .50 if his album gains traction like I think it will.