Every investor should buy at least 20,000 shares of this for a potential 7 bagger! This company has been in business since 1952 and we believe that biui.pk will continue to thrive and that the smart investor that purchases common stock at current levels will profit handsomely!
May 27, 2008
-- BELL INDUSTRIES,INC. (BIUI.PK--.14 PINK SHEETS LISTED. WE
ANTICIPATE OTCBB SOON)
The company has two divisions: The Technology Solutions business offers a comprehensive portfolio of customizable and scalable technology solutions ranging from managed technology services to reverse logistics and mobile/wireless solutions. The Recreational Products Group is a wholesale distributor of after market parts and accessories for recreational vehicles and other leisure-related vehicle markets, including, marine, snowmobile, cycle and ATV.
The company during the past number of years has had very up and down results and recently sold a division that they had recently acquired. With recent management changes it is in our opinion, that biui.pk has begun to transform itself into a more lean and focused corporation. The company sold a division, cut corporate costs by 50%, consolidated its corporate office and reduced headcount and also has plans of reducing debt from the sale of \"SkyTel\".
The fundamentals of biui.pk are extremely compelling--based upon the 8.65 million shares outstanding ( fully diluted is around 11.4 million --the majority of these shares are based upon conversion of debt at $3.80/sh-- somewhat meaningless when you consider that the stock is around .14/sh--It is possible that the debt holders will get the price re-set to some lower price, but when and if that happens is anyone\'s guess.)the stated book value is around .66, at the end of the March Q the cash on hand was $1,000,000.00 or .115/sh in cash, for the first Q rev was around $23 million and net income/sh was .10 (from operations loss was $668k, but gain from sale of part of division was $1.5 million -yield a net of .10/sh). For the year ending Dec 2008 rev is anticipated to reach $100 million-In addition by the end of June 2008 the company will be receiving an additional $3 million dollars from the sale of the second part of a sold division--(during the next 2 years the company will receive an additional $5 million from said sale) that results in an additional .34/sh, which will be used to pay down debt and used for working capital. Only a few months ago biui.pk was trading on the AMEX, management decided to de-list to save money and list themselves on the OTCBB- currently listed on the pinks--we believe OTCBB listing will happen soon ( mentioned within the Q that they intend to list there). When biui.pk de- listed the stock \"crashed\" to the .10 level because \"some\" institutional investors couldn\'t hold stocks that are not listed - thereby in our opinion has created a very attractive buying opportunity at current levels!
At present the current market-cap is only $1.2 million, while the revenue base is $100 million. The book value is over 4X the share price and the cash per share before the additional .34/sh it will receive is almost equal, that is, .115 in cash while the share price is around .14!!
If all of this was not enough for the smart investor to deal with--how about the fact that biui.pk also has a large NOL ( $19.6 million ) - $2.26/sh ( based upon the 8.6 million basic shares outstanding)--this huge amount of NOL will shield biui.pk from federal taxes for many years or can be used for another acquisition or even a merger with a like company! This NOL is extremely valuable and adds to cheapness of biui.pk! Plain and simple-- This stock should not be sitting at the .14 level- In our opinion it is worth at least .75 -- A far cry from current depressed levels.
At present management owns around 13%,institutional investors own around 28% & the balance is owned by "Joe Blow"- when you consider that this company was formed during 1952 ,one must assume that a good percentage of the stock is lost or the owners are dead--all adds to the thinness of this issue.
During 2006 biui.pk share price ranged from $2.25 to $3.90 and during 2007 the stock reached $5.20 and a low of .82-- bottom-line; Everyone in this issue from institutions, funds, management, debt holders and investors are buried alive! Biui.pk is not going BK! The company is worth much more than the current price so in reality there is little to nil downside risk, while the upside potential is at least 7X your money with a little luck and a management team that has finally gotten the picture! When you consider that management has such a small level of control it would be very easy for a fund or even a corporation to tender and take over biui.pk--For a few million dollars either cash or "paper" a smart entity could acquire a $100 million rev based company for $8 to $10 million in cash or paper!
We first mentioned biui.pk during early Jan 08 at around $.90(before the company sold a $100 million division and de-listed) now the company is .14 and even a bigger bargain!
If saadvisory.com had a few extra million in cash we would tender & try & take control of biui.pk! By far this is the cheapest micro-cap around with a est. PSR of .01, trading @ 20% of Book, cash value by the end of June will equal around .45 ( partial payment of $3 million for division sold) 3X the current share price, a 56 year history of business, a 50% reduction in corporate overhead, to receive an additional $5 million during the next 2 years from sale of division and a "new" attitude from management to become lean and mean and make some $$$! We are not that sure that 08 will show any huge profits from operation because of the current state of the economy, but everyone may be surprised!
We rate biui.pk with a strong buy recommendation at current levels for huge upside potential during the next 6-12 months from huge value disconnect, Rev and earnings model and or a possible merger candidate!
This stock is a steal-
We have not been paid by the listed investment within this email alert! We may buy, sell &/or hold a position in biui.pk at our own discretion!
The opinion expressed in this email does not promise any results. If you cannot handle the risk that is involved in buying and selling securities then please avoid until you are able to understand all the ramifications.
For information concerning a hard-copy of the recommendations -cost/yr $200.00
For personal buy and sell recommendations before the herd is informed -where we call you direct--cost $850.00/yr
For more information call 801-272-4761
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S.A.Advisory
William Velmer
Job Title
phone:
9499229986
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