S.A. Advisory E-Mail Update
March 6th, 2003
New Buy Recommendation from S.A.Advisory for March 26, 03 and Oil and Gas drilling update( we will have a Producer)
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NEW RECOMMENDATION
IEC ELECTRONICS CORP ( OTC-BB- IECE)
CURRENT PRICE $. 48
The company is an independent electronics manufacturing services (ems) provider
of complex printed circuit board (PCB) assemblies and electronic products and
systems. Utilizing computer-controlled manufacturing and test machinery and
equipment, the company provides manufacturing services employing surface
mount technology (SMT) and pin-through-hole (PTH) interconnection technologies.
As an independent, full-service EMS provider, IEC offers its customers a wide
range of manufacturing and management services, on either a turnkey or consign-
ment basis, including design, prototype, material procurement and control,
manufacturing and test engineering support, statistical quality assurance, complete
resources management and distribution
Upon reading and reviewing recent sec filings and current press releases it is our
opinion that IECE is an EXCELLENT SPECULATION with HUGE UPSIDE POTENTIAL!
Most investors realize that during the past few years that most "tech" stocks have
been terrible investments and that many are trading near multiple year lows. IECE
is a great example of a stock that was $27.00 during late 97 and todate has drifted
lower ever since with it usually trading in the multiple dollar range. During 02 IECE
was at a major turning point! It was either going to "die on the vine" or slim down and
refocus and reduce debt and get lean and mean!
SELECT FINANCIAL DATA
YEAR ENDING SEPT 30TH QUARTERLY RESULT FOR 03
2001 2002 1Q 03A 2Q 03E
REV $114 million $39.3 million $9.6 million $11 million
income/sh
(loss) ($2.28) (.49) .06 .12
According to management: The fourth Q of 02 rev was $8.6 million with net income
/share ( continuing opps.) of .18. On Feb 03 management released first Q for fiscal
03.- rev of $9.6 million with net income from continuing opps. of .06/sh. On March
25, 03 management released est. for second Q of 03--management believes that
earnings/sh for the second Q will equal .12/sh from continuing opps. THIS RESULTS
IN .18 FOR THE SIX MONTHS ENDING MARCH 31, 03. THIS IS TERRIFIC NEWS FOR
SHAREHOLDERS OF IECE! WE NOW HAVE A .48 SHARE PRICE WITH EARNINGS OF
.18 FOR THE SIX MONTHS! If we assume that earnings will continue and IECE earns
.15 for the balance of 03-- this will result in earnings of .33/sh for 03! This is highly
likely when you consider that this company is earning "REAL" money in a soft
environment- if the tech sector gets even mildly stronger this could result in even
stronger earnings potential. We now have a stock that is trading @ .48 and earnings
potential of .33 for fiscal 03 -a PE of 1.5X+ is calculated--this ofcourse is "crazy"!
IF WE ASSIGN A CONSERVATIVE PE OF 10X- RESULTS IN A PRICE OF $3.30
--A FAR CRY FROM CURRENT LEVELS, THAT IS .48. THIS RESULTS
IN A SHARE PRICE OF 7X THE CURRENT LEVEL OF IECE .
MORE STUFF!
1. Management has been buying stock during the past year.
2. Sold unused facility for $1 million
3. Settled lawsuit for $3.1 million ( anticipate total payment by Oct 03)
4. Refinanced debt and continues to reduce debt
5. IECE is a full service, ISO-9001 registered EMS provider
6. Under 8 million shares outstanding
7. Severely undervalued based upon real fundamentals
8. Review March 25, Feb 11 and Jan 15 2003 press releases
THIS SITUATION IS A GREAT BUY @ CURRENT LEVELS. IF MANAGEMENT
CAN CONTINUE TO DELIVER WITH RENEWED GROWTH AND SOLID GROWTH
IN EARNINGS THEN THIS STOCK HAS ONLY ONE DIRECTION TO MOVE IN
AND THAT IS "SKYWARD". WE RATE IECE WITH OUR STRONGEST BUY RATING
AND WILL MONITOR IECE FOR PERCENTAGE GAIN PERFORMANCE.
STOCKS THAT WE RECOMMENDED ON JAN 01 03 AND FEB 23 03
SYMBOL RECOMMENDED PRICE CURRENT PRICE B/H/S
AES $3.02 $3.54 B
CPN 3.26 3.20 B
MIR 1.87 1.62 B
ELNK 5.45 5.79 B
TYC 17.08 13.10 B
ELN 2.46 2.81 B
VTSS 2.18 2.43 B
SLR 3.55 3.14 B
SANM 4.49 4.41 B
TOY 10.00 8.90 B
INTC 15.57 17.94 B
CSCO 13.09 13.72 B
FDRY 7.04 8.36 B/H
IMAX 4.00 4.97 B/H
LU 1.26 1.52 B/H
NITE 4.79 4.28 B
NT 1.61 1.51 B
PVN 6.49 6.58 B
SUNW 3.11 3.53 B
CC 7.42 5.72 B
DYN 2.03 2.34 B
WMB 3.58 4.39 B
AFPC .14 .14 B
DHB 1.66 2.30 B
ETEC .36 .35 B/H
MCTL .22 .22 B/H
FSPX .09 .14 B
MEAD 3.12 2.68 B/H
PDGE .23 .18 B/H
SETO .27 .24 B
SOCR .30 .30 B
DFNS .60 .45 B
TARG .15 .30 B/H
IECE .48 STRONG BUY
YOURS TRULY
WILLIAM VELMER
S.A.Advisory--started in 1983
www.saadvisory.com started in 1996
8012724761
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