DFNS 5TH PICK FOR STOCKDOUBLING.COM PROJECT

My 5th pick for the StockDoubling.com Project is.....

I purchased 8000 shares at .50 of DFNS (DEFENSE INDUSTRIES)

DFNS Is an company based in Israel that deals with defense.

This company has announced some big orders for their products in the last couple of months. They should grow revenue dramatically especially for the first 2 quarters. The stock has moved up some already though due to that news. Last year they did roughly $10 million in revenue I would think they could do $15-$20 million this year. The Ceo owns 2/3rds of the stock but they are filing their 10k in a few days/week which I would rather have that information in front of me before buying. How much in earnings could they really do? I don't know could be .03-.10 if it is on the lower end the RISK of this stock could be a good deal. With roughly 30 million shares and if it does $15 million in revenue that is a 2 to 1 price to sales ratio. The real question is will the orders they have announced turn into additional orders for now and the future. In the past the company has been stagnate as far as growth so is this year a fluke or can they really continue to grow?

Their seems to be decent support at .45 and .40 if it breaks that then .30. I would probably exit the trade below .30 if it got that low. On the upside they have hit their 52 week high in the low .60's a few weeks ago. If that breaks it could head toward $1.

They should have a couple of monster Q1 (will be out by May 15th) and Q2 (Will be out by August 15th) year over year which could really move the stock. Especially if the company can produce a couple cents per share in each quarter.
It does have some risks if they can't produce additional orders or if they can't turn a profit this could go down to .30.






Here are the other 4 stocks that were in contention for my Stock Pick. They are inNo particular order. (I look through 100's and 100's of stocks. I narrow it downlittle by little usually to a group of 20-30 after a while than really go in-depth.I than narrow it to 5 and out of the 5 I pick the best.) I have always included theother 4 stocks in the original email. The other stocks have usually done pretty well also.
In random order! (I do not own any of these following stocks or plan to unlessotherwise noted. Stock symbols are given with April 4th closing price.)


GLDS .275 This company is buying a couple of other companies and combined revenues should reach $55 million for 2007. Insiders have been buying the stock in recent months. They have about 70 million shares outstanding but with all the additional buying of companies it will probably approach 100+ million. They may lose some money but if they can keep shares outstanding to a minimum they could be ok. A double in price would mean roughly 1 to 1 price to sales. Which wouldn't be bad. It is well off its highs it may take a while though to right the ship. (Has the biggest upside for a multiple gainer but biggest downside if they don't stop issuing shares and can't become profitable.)

AYSI .67 This stock has taken off in the last couple of months it is up from the .10-.15 range just a couple of months ago. They earned .03 EPS for the first quarter 07. They seem to have turned the corner on revenue and growth. This is a very small company they only did $3-4 million all year last year. However what matters is EPS. And its possible they could earn .08-.10 for the year. They said 2nd quarter results would be down from 1st quarter what that means I don't know. But if the stock price slips to the .50 range I think it would be a good buying opportunity. Insiders own most of the shares. (basically 2 guys) Investor relations aren't pleased with them though for various reasons. A decent amount of risk at these levels due to the quick move up. If it can come back down a little and after the 2nd quarter earnings. (which will be out by mid May) if the stock comes back to the .40-.50 range and it still looks like .08-.10EPS for the year could be a good buy there.


TSSW .76 This stock has also moved up a bit in the last month or two. They are also a very small company having revenue of just over $3 million for 2006. But they made .06 EPS and grew about 100% last year. They seem to have things together and their websites (which is how they sell) are ever increasing in hits each month. They also have plans for other products that could increase revenues. Insiders own a good deal of this stock (35%) Issue is I am looking for a double in price or $1.50 can this stock get there. A $1.50 stock price would mean a $20 million marketcap for a company that may do $5 million this year in revenue. EPS does matter but where will they be even with .10 EPS for the year I would need a 15 x EPS. Which for the industry they are in is very low but it is also a small stock. I think it has potential to go higher I would like to see a bit lower price though first.


CAGC $2.90 This stock deals with fertilizer in China they have opened a couple of factories the last few months and have a couple more coming on within the next 60 days. They are profitable company earning .29 EPS for 2006. So they are trading at roughly a 10x PE. With the additional factories coming online they should increase revenue and EPS a good deal. Their is good support at $2.40-.50 in this stock so the downside isn't too bad. Other factors that could cause this stock problems is CHINA. If China revalues their currencies the sales for CAGC will go down comparative. Also China has announced new tax laws going into effect Jan 1 2008 which when announced the rates could send ALL china stocks lower.(Assuming they are high) Both the currency aspect and tax aspect have me a little worried about the hits China stocks could take. I think the stock is very good though and will continue to grow and its hard to invest in WHAT IF'S. As if the tax rate is good then it would be a non event or if the currency doesn't revalue this year its a non event.
I would also need a $6 stock price in order to get my double. With 19 million shares out that roughly a $115 million dollar market cap for a company that will do $40 million in revenue or so. I would need a roughly 15x PE. As far as safety and longer term play I think this will probably be the one.

Thank you

Steve Hoven
alleycatnews@alleycatnews.net

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