S.A. Advisory E-Mail Update

New Buy Recommendation On ALJJ.PK
This steel company has the potential to be a 10 bagger easy!

For .29/SH you get a rapidly growing steel company that has a $268 million NOL. Estimates of .16 to .20 net income/SH for 2008 is a real steal for steel when the share price is only .29.

Please review the Jan 1 2008 e-mail alert.

We recommended PAL @ $3.69 - now $8.46 and PAL-WT @ .65 now $4.75 Wow!

Mar 05, 2008 As you know the Palladium and Platinum markets have rallied sharply because of power problems in South Africa! The returns from these investments have been like rocket fuel. We still anticipate further gains - so profit from your gains but would not divorce! ADG--Allied Defense Group, our stock pick of the year --recommended @ $4.50 within Sept 16th email alert has performed like the "star" that it is--Rome is burning all around and ADG is up around 75%--earnings due out around march 11th or so - anticipate additional contracts--remains a strong buy in our huge and ever expanding brain--thank God that I am not a Dem!! Alj-regional holdings,inc. Aljj.pk (pinksheets-- current price around .29)

ALJJ.PK is the parent company of KES Acquisition Company dba Kentucky Electric Steel.

The steel mini-mill is located in Ashland, Kentucky. The company produces 2 kinds of steel bars- MBQ Bar flats for generic types of applications and SBQ Bar flats- special production procedures to insure that the finished product meets critical end-use performance characteristics. The company manufactures over 2600 different Bar flat items, which are sold to volume niche markets!

For the year ending Sept 2007 total rev reached $150 million and net net was around .08 (actually the number was .16 - we sub out interest payments and other one time lines -- being very conservative and fundamentally strict)

The "monkey on the back" has been debt and will remain an item to deal with during the next few years-- maybe!!! During the past year or so the company has reduced debt from $77 million to around $53 million -- very impressive feat because we at www.saadvisory.com believe that management is a class act and aim to be strict balance sheet players with no smoke and mirrors!

For the first Q of fiscal 2008 rev reached $37 million and net was around .12, but we sub out debt payment and other line items and get a .04 net net number that in our opinion gives a more crystal clear account of aljj.pk!

Concern a conversation with management, we envision a continual strength in their business model and see little evidence that aljj.pk cannot earn a whopper of cash yielding .16 -.20 net net for fiscal 2008 ending Sept 30th.

During the past few days all major steel producer raised their prices for finished products. Aljj.pk follows the lead of NUE.

If you look at Wall Street during the past 6 months or so- there is not much to cheer about unless you short stocks and then you have been lick your chops, but if you are a buy side investor type you have been mangled and roasted (housing,financials, insurers and banks and just about everything else unless you played the resource sector and believe it or not -- the STEELS!!!). Most steels are trading near 52 wk highs--NUE, X & AKS.

Please recall we first recommended Aljj.pk within our May 14th and August 12th 2007 e-mail @ .25 & .27 respectively.

One of the most important elements that needs to be addressed is the NOL of $268,000,000.00 that aljj.pk retains that can be used to offset future federal tax obligations--this equals around $6.38/sh in NOL (based upon 42 million shares fully diluted and outstanding). Actually this valuable asset could be used for an acquisitions or even a merger between aljj.pk and another steel player! This item we can't stress enough the value of this entity!

What we have here is a steal of a deal for steel! At .29 you get an estimate .16 -.20 earnings/sh for 2008 yielding a PE of under 2X, an NOL worth over $6.00/sh, serious debt reduction--they mean business--a management that has and continues to deliver the "goods", an industry that is pushing thru price increases and a industrial group that is making new highs!

You have to own some of this micro-mini!

If we assign a conservative PE of 10X we get a $1.60- $2.00 share price based upon current estimates. The PSR is .08 and if we use the $53 million in debt the PSR is .40 -- most steels are trading @ over 1 times sales and they sport a PE of 15X!

The company does file complete Q's and K, but is not fully reporting with the sec -- actually this saves the company over $400k/yr - for the time being and we can live with it!

Aljj.pk is extremely undervalued- we repeat extremely undervalued! We believe that Aljj.pk is a juicy takeover candidate and/or an attractive merger partner!

When you consider that demand has been growing faster than supply for each of the past 6 years and that global inventory is low and that steel prices have been rocketing since Oct--this a recipe for huge upside potential for the steel group as a whole and will of course benefit aljj.pk!

The industry pundits agree that during the next 6-12 months the price of steel will continue to increase---this is the place to be--end of story! We have not been paid for this recommendation and own a position in aljj.pk. We may buy, sell and or hold without obligation. At present we own 70k.


GPS chip sets and software

Cash $2.32, BK $8.49, has 0 debt, 60 million shares outstanding and has a huge short position of 16 million shares--very bullish-- trading near 52 wk low --high of $30.61, even with recent earnings downgrade of .45 for 08 and .75 for 09 this stock looks and feels cheap! Could also be a juicy takeover candidate--we like it and rate with a buy!

The directions to get to this stock was a "no-brainer"!

CRLI.OB--the sleeper of sleepers--one day it will erupt and it will be to late for the lazy investor---read past emails and recommendations on crli.ob --read the press and the 8K and Q's.

IMB-NYSE- $5.10 down from $37.50- new 52 wk low--Indymac Bancorp, Inc--another banking super blowup--should survive or even merged--speculation down here.

I have always hated real estate and every aspect of the business--shame on you banks for causing this financial meltdown!


Sub information:
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www.saadvisory.com has just had its 24th birthday--we had our first car phone back then-now we have cell phone chaos

Heading for Montana for some turns and then getting my neck sliced for disc problems

William Velmer
Job Title
phone: 9499229986


William Velmer
Job Title
phone: 9499229986

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