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WEX getting attractive again near $5. The IBD crowd pushed this one to the $7's after a blowout Q2 report. Company had Q2 fully-taxed earnings of .16/share on a 22% rise in revenues. But there was some cause for concern. Biggest customer will be adding additional suppliers in mid-2006. Backlog was down sequentially. And on the CC, the CEO said gross margins were likely to decline from Q2 levels.

That said, there have been some positive developments recently, including the announcement of a couple of new customers:

http://biz.yahoo.com/prnews/050825/clth504.html?.v=11

http://biz.yahoo.com/prnews/050913/latu013.html?.v=24

According to the 8/25/05 deal with DFIB, WEX received $1.8M in initial purchase orders. $600K had already shipped, which should give Q3 revenues a nice boost.

According to the 9/13/05 PR, WEX received initial purchase orders of $4.5M, with some revenue from this agreement to be recognized in Q3.

There was also the $4.5M extension order from Select Comfort announced back on 4/20/05. This order was to be filled over 8 months, which means Q3 could see the greatest benefit.

WEX announced some new environmental sensor products on 7/28/05. Nothing major, but can't be bad for Q3 reults.

http://biz.yahoo.com/prnews/050728/lath019.html?.v=21


Depending on margins, it sounds like Q3 could match (or possibly exceed) the .16/share earned in Q2. If that happens, stock should see another pop. Especially if the company continues to win new customers and lessen their dependence on Select Comfort.