December 6, 2004

SpeculatingStocks.com Stock Pick: Network Engines, Inc. (NENG)

Stock Price: $2.30 (long-term strong buy)

Network Engines is a leading developer, manufacturer and distributor of storage and security appliances. The company works with its partners to develop storage and security networking appliances for mission-critical applications.

A majority of the bad news is now priced into NENG. It appears to have bottomed and is now beginning to trade more volume as it trends higher.

The company is starting to turn around as they exit the business of distributing third-party storage networking products and begin their investments on further OEM appliance development and the new NS-series firewall appliance initiatives. We expect NENG to go higher as this new business strategy continues to be priced in.

There is $37 million in cash and cash equivalents on the balance sheet. NENG has a book value of $1.73.

SpeculatingStocks.com Target Price: We expect NENG to reach $6.00 within the next six to nine months.