Sometimes it's the companies with the strongest business models, showing the greatest growth potential that struggle the most in their early stages of market trading.

There are many companies out there that don't have a product, service or leg to stand on in the market but trade millions of shares daily. It comes down to staying power. Is the company you invest in today going to be around in 2 years? How about 10 years? Will it be a fly-by-night winger or the next Coca-Cola. I guess that all depends on the foundation the company is operating on.

DineWise Continues to Flourish

Case in point, DineWise Inc. (OTCBB: DWIS).

With sales associated with their trademark DineWise® brand experiencing record growth in eight (8) consecutive quarters and related first half revenues increasing nearly 430% over last year, sales alone should be driving a boatload of attention to the company's stock, particularly at the low levels we are seeing now.

Toss a partnership with MasterCard into the equation, which exposes DineWise products to global purchasing volume of $1.4 Trillion, and a price of ten cents should be almost laughable.

In addition, take into consideration the fact the DineWise is rapidly establishing itself as the leading in-home dining solution provider to some of the most lucrative, yet currently under-served consumer markets, and we should be in the half dollar range at least, pending any huge blemishes on the balance sheet. Right? Not in this case.

For today's discussion, let's take a look at some of the biggest reasons that we feel DWIS is currently under-valued in the market today and why the company should show some nice improvement in the future.

3 Key Reasons DWIS Shares Are Under-valued

1 - The Company's Ongoing Record Sales Growth and Financial Improvement

With 8 consecutive quarters of record revenue growth under its belt, the DineWise® brand has improved sales from $81,000 during Q1 2006 to $693,000 during the second quarter of 2007. Branded products, which accounted for just 6% of total sales during Q2 2006, pitched in a heftier 24% during the second quarter and likely are attributable to an even larger piece of the pie today.

This isn't shocking when you consider how hard the management team (reason 3) has worked to expand catalog circulation, build a beautifully entrenched online position, and forge relationships with key players in all key target markets.

A drastically improved net loss per share figure of $0.01 loss per basic and diluted share for the second quarter represents a 79% jump from a loss of nearly $1.9M or $.07 during the corresponding period in '06. Driven largely by steady total first half sales that reached $5.5M, the company experienced a significant improvement over the first half of 2006.

Growth in total sales is especially nice to see as DWIS continues to transition historical customers away from their traditional brands and towards the franchise DineWise® brand with seeming ease. It's not easy, but they sure make it look as if it is.

2- DineWise Inc. is intelligently Targeting Under-Served Markets with Enormous Growth Potential

For those of you that have not seen this before, here is a sampling of the key markets currently targeted by DWIS, as well as a brief description of how the company is approaching them. Yes, we do mention these often in our coverage but capitalizing on some of these key, and virtually untapped, markets is what sets the DineWise brand apart. (If you are fully briefed on which markets DineWise is strategically targeting, feel free to skip straight to the next section.)

Low-Carbohydrate Dieters - an estimated 10% of U.S. is now on "low-carb" diets. DWIS recently announced the addition of Low Carb chef prepared meals to their nutritional product line in response to enormous consumer demand for gourmet quality, chef-prepared, low-carbohydrate dining solutions.

Overweight/obese - >65% of U.S. are now "overweight", and > 39% are "obese", in addition, approximately 33% of U.S. is on a diet, while >70% vow to diet. This is currently driving a $42B market which is growing by 3.5% per year (Datamonitor). DWIS provides fast weight loss meal plans that include low-calorie selections and more than 1.000 fully prepared customized meal choices for diet conscience consumers focused on addressing weigh management issues.

Diabetic - nearly 60 million of U.S. is now classified as either diabetic or pre-diabetic. DWIS recently announced the introduction of the ExtendBar ® a healthy snack for the country's growing diabetic population that complements its full line of diabetic products.

The on-the-go, health conscious consumer - 76%of U.S. consumers are now making some type of effort to improve their health. DineWise has successfully tapped into this growing market by providing, tasty, easy to prepare, fully customized dining solutions that can be shipped anywhere your heart desires.

Senior Caregiver - an estimated 20-25% of Americans are now providing care to a loved one. DineWise home delivers automatic dining solutions that provide seniors with the essential vitamins and nutrients necessary to ensure a long healthy life.


3 - The Depth and Breadth of DineWise Management Team

The company's CEO spent nearly a decade helping to lay the foundation for greatness at Rollins, Inc. (NYSE: ROL) as chairman and CEO of the Protective Services Division. Shares currently trade in the $20 - $30 range. In addition, Rollins logged net income applicable to common shares of $57.8 during 2006, and has a seven year EPS growth rate of 33.8%. Enough said.

In addition, both the VP-CFO and VP-CMO have extensive experience at the helm of thriving NYSE and NASDAQ companies as well as with leaders in the private sector. Further, the CFO possesses extensive knowledge surrounding the intricacies and nuances of the SEC process that rivals just about anyone representing any public company.

And it doesn't end there, I've had the personal pleasure of speaking with many other key personnel at DineWise, and I can say this with absolute certainty, the company is operating as if it is a NYSE traded organization.
Quite frankly, I'd bet that the current management team is counting down the days until shares trade on a senior exchange. These guys have experience in building and maintaining highly successful public organizations. You'd better believe they're applying it every day.

Let's talk stock...

At a closing price of $.11 on Wednesday, DWIS is coming out of the summer lull at a 52-Week low. With a thriving national brand (good enough for the likes of Mastercard's elite members) that has experienced record growth in eight consecutive quarters and possesses a tried and true management team with the proven ability to build successful NYSE and NASDAQ companies - we feel the upside vastly outweighs the down.

Remember, shares did trade in the $.70 to $1.20 range last fall shortly after trading commenced on the bulletin board. DineWise Inc., which has had remarkable success while still in its infancy, has done nothing except grow exponentially since then, all the while sewing seeds for remarkable future expansion. Meanwhile, shares have been trading at a huge discount.

But don't let that fool you. DineWise may look small, but that's just a disguise. While a DWIS investment can still be small, we see big returns down the road. Sooner or later, the market will wake up and smell the coffee. As for those of us current, die-hard DineWise fans, we know our day is not far off.

Labels: DineWise Inc, DineWise Inc., DWIS, DWIS.ob, OTC BB: DWIS, OTCBB: DWIS