February 8, 2006
SpeculatingStocks.com Stock Pick: Simclar, Inc. (SIMC)
Stock Price: $3.41 (long-term strong buy)
"Simclar works with data processing, telecommunication, instrumentation, and food preparation companies to provide customer specific electro-mechanical products."
Industry: Diversified Electronics
Market Cap: $22.05 million
Price to Sales: .39
Price to Earnings: 17.67
SIMC News Stories
February 6, 2006: Simclar, Inc. Announces New CFO
December 22, 2005: Simclar, Inc. Announces Agreement to Acquire Litton Systems...
November 18, 2005: Simclar, Inc. Announces Third Quarter Profits
Bottomline: SIMC is a solid company in the manufacturing space about to become more of a player within the Diversified Electronics space after the acquisition of Northrop Grumman-owned Litton Interconnect Technologies. Simclar just added a new CFO, who will come on board this Monday. Revenue for the most recent quarter was up 25.4% to $16.59 million. Net income came in at $242,000, or $0.04 per share. As noted above, SIMC is trading at a market cap of only $22.05 million. SIMC is trading at only .39 times sales and at a P/E ratio of only 17.67.
Right now... The stock is near the $3.47 price of our first SIMC stock pick, shares later hit $4.80. We expect the stock to return to this price or greater in the near future. There is major support at this price for SIMC, and there is no reason for support not to hold here.
On major volume, SIMC could move much higher than $4.80, but we are not counting on major volume, this stock can move to $4.80 on its normal volume if a few buyers move into the stock. The acquistion of Litton will demand a higher stock price. Also, investors are still looking for the undervalued stocks to limit downside risk.
SpeculatingStocks.com Target Price: We expect SIMC to reach $4.80 within the next one to three months.