Wednesday, January 2, 2008

2nd Project? and DFNS NEW YEAR!

Hello StockDoublers,

I hope you had a good Christmas and New Year.

I wanted to update on a few things...

1. Thank you for taking part in the poll I will PROBABLY come out with a 2nd StockDoubling project at some point but it won't happen until at LEAST the end of January or the beginning of Feb. So don't look for another pick until than. I, will of course update you when things are closer and I have more information on it all etc...

2. DFNS is trading at .27 right now not many shares trading yet this morning. It is still odd to me why its down this low. Unless something underlying is going on as far as slow growth going forward etc.. It just seems way undervalued.

Book Value is .24
The 4th quarter just ended a few days ago we won't see any news on that until the end of March or early April.

With roughly 29,000,000 shares outstanding and a .27 share price it puts the market cap of the company under $8,000,000. The company should do at LEAST $16 million for the year just ended so we are trading at well less then 1x Price to sales. The company grew at a large rate this past year on earnings and sales yet is lower in share price then it was at this time last year very odd.

I know the SEC issue is there but from what it looks like is quite small and much to do about nothing. We will see if the sales are in the $3 million + range for Q4 and if they can make money I don't know if they will or not.
But aside from the company imploding it just doesn't look like a lot of downside at this point so I don't see a reason to sell. Even if the company could only do $10 million in revenue next year it is still trading at less then 1 to 1 Price to sales and just over 1 to 1 Price to Book. So I see no point of selling at these levels. If new information comes out etc... I may change my mind but at this point I think its bound to rebound some.

Last year in January the company came out with a news release that the Israel Defense Ministry just ordered $5 million worth of products which sent the stock soaring. I don't know how the budgets are in Israel if its based on the calendar year etc.. But if it is then this month maybe a good one as far as new releases of new orders. Assuming of course they actually get new orders. I wouldn't expect any BIG orders or orders at all from the Israel Defense Ministry as they still have a backlog that they have to run thru and how many vests etc. do you really need? I would love to see some bigger orders for the buses or wall covering etc.. I think that would be a positive sign especially if its from other countries.

A lot of times to start the year you see rallies in stocks that are considered "VALUE" plays. Companies that seem quite undervalued. DFNS actually has rallied nicely to start the year each of the last few years. We will see if that trend continues for it this year or not. Hopefully it will.

I would hope to see some news from the company either on the SEC and/or New orders over the next 60 days. Failure to see ANY news from those two fronts wouldn't be good news going forward in my opinion.

Right now we are in wait and see mode. I have confidence that the stock will rebound to prices that reflect the business facts.

Have a good day
Steve Hoven

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