Volume Flares Up on Micro Caps
 Lots of Action in our Micro Cap World This Week!Over the weekly hump and it has been a busy week thus far. Although we typically focus on just one company in each edition of our newsletter, an overflow of positive news from our portfolio companies this week has forced us to approach things a bit differently today and bring you our three immediate-term growth front runners. Before we get into today's news, we thought we'd mention that all of our previous newsletter editions and additional commentary can be found on the MicroStockProfit Blog. EXCS Sales up Nearly 60%
Execute Sports Inc. (OTCBB: EXCS) announced this morning that overall, year-to-date sales have increased nearly 55% over 2006. The jump from $935,541.31 logged in the first three quarters of 2006 to $1,444,743.67 in 2007 is probably the premier indicator that EXCS has embarked on a new era of growth. Record sales levels also exhibit the company's unique future potential with former Body Glove executive Celeste Berouty situated as President.
Check out our Blog entry from Tuesday for a rundown of exactly why I think this stock has to perform better over the next three to six months.
The market has reacted extremely well to Tuesday's potential $6,000,000 announcement out of Nighthawk Systems Inc. (OTCBB: NIHK) and should grow even more fond of the stock after today's news highlighting an order worth $488,050 - or about 43% more than total second quarter revenues - from a major customer. NIHK's decision to purchase the IPTV set-top box business assets of Eagle Broadband was a pretty slick move, particularly since the boxes are already generating sales for the company just days after the business segment was acquired. Nighthawk's current backorder of more than $900,000 exceeds the company's revenues for the entire 2006 fiscal year and exemplifies the forward direction that operations are moving in. Sure I'd like to see the bottom line tidied up a bit, but then again, if they were showing a profit, I'm thinking we'd be around $0.50 or higher versus $0.10. Don't forget that this stock
 Marmion Industries Corporation (OTCBB: MMIO) continues to execute on previously announced contracts. After a press release announcing a letter of intent last July, management noted today that they have received a work release notice for a change order valued at nearly $100,000 for a project at the Debakey High School in Houston, Texas. MMIO also has an additional 20 or so add- ons pending approval which will increase the project's ticket, which I estimate to be worth a hair under $1,000,000. Today's news is especially great in my opinion because it exhibits management's ability to deliver on contracts. It also helps to solidify Marmion's position in the commercial HVAC market which acts as a pretty nice complement to the industrial business. With ARC Advisory Group forecasting the worldwide market for HVAC control systems to continue growing at a compounded annual growth rate (CAGR) of nearly 4% over the next five years, growing from $10 billion in 2006 to nearly $13 billion in 2011; MMIO has a lot of room to grow. Management is ramping up sales/marketing efforts and for the first time and pursuing business rather than simply relying of word of mouth to drive revenues. Simply put, I expect monumental growth for the company going forward. With net income of $212,000, as of their last reporting period, continued near-term sales growth, such as that being exhibited recently, could turn this thing around in a major way. The foundation is in place for EXCS, NIHK, and MMIO and going forward all of these companies seem to do nothing but grow and improve. So why the poor stock performance? Obviously, value here is just increasing. Yet the market seems to waiver in it's faith daily. Eventually, these companies will get their legs in the market and today's prices will be yesterday's news. In the meantime, day traders and long term investors alike should find some good entry points this week. Labels: Body Glove, EXCS, Execute Sports, Marmion Industries, MMIO, Nighthawk Systems, NIHK
Sales Keep Heading Up Up Up!
 Yesterday was a good day for MicroStockProfit subscribers. If you jumped on our Monday morning pre-market Nighthawk Systems (OTCBB: NIHK) alert, you likely got a nice investment gain to go with your frenzied Monday morning. Closing Friday at $0.08, NIHK was on our radar for a strong following week in the market. Hopefully, many of you got to pull a little off the table as it traded up on HUGE volume yesterday morning and closed at $0.106 (just a hair off its intraday high of $0.107) - a gain of over 32%! Not a bad way to kick off your week. Now on with the show. . .
Over the past year, we have seen quite a bit out of Execute Sports Inc. (OTCBB: EXCS). The company has emerged from virtual upheaval and is reaching milestone after the milestone. Today, EXCS is out with yet another positive news release that should have investors and shareholders excited for the future of the rapidly emerging water sports player. According to EXCS, preliminary orders for 2008 OEM produced Life Vests will increase by nearly 61% over 2007 production. So applying a little "back of the napkin" math and making the assumption that overall OEM sales are growing at roughly the same rate as OEM life vests, pre-orders for 2008, which hasn't even technically begun yet, equate to nearly $1,600,000 in 2008 revenues. Even if life vest sales contribute only 30% to overall OEM sales and this is the only private label OEM product experiencing such tremendous growth, we're still looking at a very healthy increase since these are 2008 orders are being logged with about 2.5 months left in 2007. For a company that logged only $2,000,000 in 2006 revenues, this is a major deal - particularly since OEM/Private label sales make up only a small portion of the company's overall sales and we are only speaking in terms of preliminary orders. Actual 2008 OEM sales will likely be much higher given the many months that Execute now has to log more orders. Sometimes, a list is the best way to get a handle on company details. Let's take a look at some of the positive forces that are currently working in sync to foster a positive future for Execute Sports. Here are a few of my favorites in non-chronological order. 1. The Chart - EXCS shares have found support in the $.02 range and investors don't seem at all willing to part with the stock at lower prices. It appears that we have reached a bottom, and judging by the ongoing improvements being made on behalf of management, it doesn't seem like we can stay parked here forever. The company is simply performing too solidly, both from a financial and operational perspective for that to happen. 2. Record Sales - After announcing all-time record high sales for the second quarter back in July, Execute has issued a string of very positive corporate announcements regarding many aspects of their stellar sales performance. As of 9/27/07, Year-to-date internet sales had increased 38% over 2006 and Execute branded products were accounting for nearly ½ of ALL online sales in each of their core product lines. This rapid growth (online sales just started in March of '06) has been facilitated through management's ability to get their products online with leading retailers including: The Sports Authority, Dick's Sporting Goods, Joe's Outdoors, Sport Chalet, Modell's and MC Sports. 3. Recent $5,000,000 Sugar Sand Boat Acquisition - By purchasing Sugar Sand, Execute, recognizes the benefits of both a cash influx of $7-10 million during year one and the addition of a complementary brand. U.S. law stipulates that all recreational boats must carry one wearable PFD for each person aboard and that each passenger under 12 years of age must wear a flotation device at all times. Essentially, for every Sugar Sand jet boat that is sold, the company has the opportunity to sell a few additional PFDs. In addition, Sugar Sand has developed a very strong dealer/distributor network to which Execute can pitch its brand to for the first time. This move should also provide the cash and equity necessary to fund further growth through acquisition. How could management possibly pass this deal up? 4. Audited Financials Improving by almost every Conceivable Metric - The improvement to both revenue and gross profit over the trailing three quarters is a direct indication that management has got its act together and is ready to move toward profitability. Operating income improved during the second quarter over the previous reporting period and SG&A expenses stayed flat despite substantial revenue growth (44%). Simply put, the corporate re- organization was a smashing success and the company is much more operationally efficient now than it was just one year ago. I expect upcoming financials to bring more of the same improvement, but only time will tell. 5. Product Placement & Brand Recognition Have Never Been Better - With Kawasaki re-ordering, Execute products being prominently featured on major television outlets including MTV, ESPN, and the E channel, and the company's all-star sales team introducing its revamped 2008 line at the world's largest water sports expo recently, product placement and brand recognition have never been better. This bodes extremely well for future growth as the world is just getting their first taste of Execute Sports products.  Execute Sports Inc. keeps getting more attractive. Financial or revenue news is always a good jump start for EXCS stock but I think this little company is just getting started. Take, for instance, a look at the OTC Bulletin Board for companies currently trading in the $.02 range. Measure them against Execute's recent performance, its strong sales and revenue increase through 2007 and you will see why we like to call this one our diamond in the rough. I suggest watching this one closely over the next few months as the Sugar Sand segment becomes more integrated into Execute's daily operations, financials are released, and business as usual continues. It may take a while for the affects of the increased orders to be seen in the market, but EXCS is building a strong foundation for an explosive 2008.
Traders - We are looking for a similar performance from EXCS as we saw yesterday with NIHK. Labels: Breakout, Dick's Sporting Goods, ESPN, EXCS, Execute Sports, Joe's Outdoors, Kawasaki, MC Sports., Modell's, MTV, Nighthawk, Nighthawk Systems, NIHK, Sport Chalet, The Sports Authority
Executing on High at Surf Expo
 Just as Michael Jordan's appeal spawned Nike's growth to unprecedented levels years ago by adding credibility to the brand and helping the company transition its corporate image into the world's leading supplier of athletic shoes, apparel, and sports equipment; Celeste Berouty, the recently appointed President of Execute Sports Inc. (OTCBB: EXCS), has made all of the right moves in her first year with the company to help establish the Execute brand as a leader in the global water sports industry. On to Surf Expo Although Ms. Berouty's positive impact is already being exhibited by Execute's record sales levels, strengthening margins, prime-time OEM deals, improved distribution channel infrastructure, and product placement on major television outlets; her recent appearance at the annual Surf Expo in Orlando may be her biggest contribution to the company's growth made thus far.
Body Glove to Execute  After 20 years as sales director at industry leader Body Glove Wetsuits, this was not only Ms. Berouty's first time back at a trade show, but her first time back representing her own company. What better a time for her to rub elbows with her vast network of contacts than at the biggest water sports event of the year while Execute unveils its completely revamped 2008 product line? The Surf Expo is the biggest show of the year for the water sports industry and is attended by the vast majority of leading players, both domestic and international; including all major retailers, manufacturers, distributors, marketers, and of course consumers. With management stating in today's release that the show was a smashing success and that their exhibition booth was swarmed the entire time while more meetings were conducted than ever before, I'd say that it's not out of line to expect one or more of the following events to occur in the not so distant future: Another Kawasaki-esque OEM agreement. Repeat orders from existing retail customers and initial orders from retail organizations not already carrying Execute Sports gear. The formation of a distribution agreement, possibly with international focus, that helps to expand the company's geographic reach and revenue base. Kick off of a new advertising/marketing program that builds recognition for the new and improved '08 product line. Announcement of a strategic partnership or acquisition that further positions the company for stronger future growth. Stock Primed For a Pop - Management Executing on All Outlined Initiatives EXCS has been filling the presses with positive news since mid-April and announcements stemming from the recent Surf Expo have given investors new confidence. Couple that with upcoming news regarding the newly acquired Sugar Sand business, its affect on the continued success of Execute's water sports segment, and we should see some promising things from the company's books as well as from its stock price. The stock made a valiant run back in January and with the company's product rising in popularity, not to mention free exposure, connections in the industry being made and strengthened by the day and a new captain at the helm, we can't help but think we are seeing history in the making for this sometimes struggling diamond in the rough. Here is my thought process. . . For starters, investors involved in this deal seem to be head over heals in love with good news, and we're not just talking numbers here. Name dropping has proven to be just as effective, if not more, of a market mover than financial improvement. Sometimes the market just doesn't make sense. For example, after trading in the two cent range - roughly where we're at today - since November of 2006, shares surged up 50% on January 17, 2006 on news that water sports sales were up over 150%. Two days later, on news of an agreement with Kawasaki, shares doubled again, hitting a high of $.09 that day and closing at $.08 on volume that exceeded 22 million. After that, share price held relatively steady although it dipped a bit down into the $.06 range. And then . . . . . Total darkness! After divesting the Academy brand, Execute went back to the drawing board from an operational perspective - a move that is paying off nicely now as business processes improve - but wreaked havoc on market price as shares went into free-fall mode for nearly two months while zero corporate announcements were released. After that, not even a $5M acquisition could get this thing moving upward from current support levels. Simply put, the lack of corporate communication, whether warranted or not, killed the rally. Q3 Release Just Around the Corner
 Thankfully for all, it looks like EXCS's dark ages have finally reached their renaissance. If things continue the way they are and Celeste continues to utilize her extensive industry contacts in ways as productive as the Surf Expo, we should see more positive news out of EXCS over the next few months. Ideally, an optimal mix of releases that both highlight further operational advancement such as the recently reported 40% improvement in online sales as well as the inroads being made with manufacturers, retailers, distributors, marketers, etc., that stand to significantly improve financial performance will encourage the market to put their faith EXCS. Given the fact that the summer months are the strongest of the year for overall water sports sales as well as exceptional months historically for Execute, the Q, which should be out soon, ought to be a good one. In addition, I'd bet my dollar to your dime that Celeste and the crew came out of the aforementioned Surf Expo with at least one big name business associate. Long-term investors are smiling already. What is also clear is that there are a lot of eyes on EXCS. The stock has found support at current levels time and again and should react positively to a string of stellar news as it has historically done. The market also has to price in the future value of the company sooner or later, which has been increased exponentially by the recent Sugar Sand purchase. Having the boat company under the Execute umbrella provides a much needed cash influx as well as a world of new opportunities for more positive press and complementary water sports product sales. However, Sugar Sand aside, the overall progress being made on behalf of Exectue's thriving water sports business and its future potential is reason enough in my opinion to warrant consideration for higher market value. With lesser news, the stock returned some pretty hefty gains a few months back. The company's foundation and prospects for future growth was significantly weaker than it is today. As the company continues to trudge along improving its revenues and prospects, we expect great things from Execute's future. Labels: EXCS, Execute Sports, Execute Sports Inc.
Trading Tip - Three Golden Rules
 In my 10 year trading career, I have been head trader of a couple of trading desks, ran my own trading department and more recently traded stocks and S&P futures for a living. In the world of trading, there are a few rules that, when broken, could become disastrous.
Rule #1 Use proper money management - "Limit Your Risk" Rule #2 Never meet a margin call Rule #3 Do not average down. 
THE RULES.......
These are only a few of the many rules or "guidelines" one must follow to make a success of the trading career. But, as we have all heard (and more than likely done) rules are made to be broken and guidelines are just that, guidelines. And of course, these rules vary slightly depending on which of the slew of resources on trading you follow.
With a perfect trader, if rule #1 was followed, "Use Proper Money Management", the other two would not even come into play. Every trader has a tale of how they bought XYZ stock at 10 cents and it ran to $4 or how they shorted the market right before a big dip. What you rarely hear are the much more common horror stories that exist in EVERY trader's career. Due to the recent influx of calls and emails about Execute Sports, I will use it as our example. For simple math, all calculations will employ round numbers.
THE TRADES.........
 Lets say you bought $10,000 worth of EXCS @ $0.10 or 100,000 shares. Before the trade was even entered, your money management system should have been in place. Everyone has a different risk tolerance. Therefore there are many different systems used. For simple math, and because this is a micro cap situation, lets use 30% or $0.07 for our stop loss exit point (30% is a very large stop when trading higher volume larger stocks and suicidal when trading the futures, but with small and microcaps, some of these stocks can fluctuate 30% on a daily basis). Back to our scenario. We now own 10,000 shares of EXCS with a cost basis of $0.10 per share with a $0.07 protective stop in place.
Here is where the other two rules/guidelines come into play...EXCS's share price dips into the $0.07 range but closes up. Therefore, you decide, or your system dictates, "Well, it closed above my 7 cent stop, therefore I am still in". Now this decision is not a good or bad one. If your systems says, "on a closing price basis", then it was a good one. If your system says otherwise, it was a bad decision and should make you wonder why you even have rules.Needless to say, after flirting with the $0.07 area for some time, the stock dips below $0.07 and even $0.06. Now, not only has the protective stop been blown, you may be faced with a margin call (I do not know of any firms that would allow margining of a micro cap stock, so just humor me).
Now we are faced with one of our other rules, "Never Meet a Margin Call". After some serious deliberation, anxiety and possibly even loss of sleep, the margin call is met and you are back in the game with hopes of getting your money back. Unfortunately, things do not go as planned, wished or hoped for, and the stocks continues to trend downward. We now have 100,000 shares of EXCS trading at $0.02 per share and our cost is 5 times that at $0.10 a share. You need a 500% run just to get back to even. AND THE TRADE GOES ON.....
 Finally, our " Never Average Down" rule has made it to center stage. I can count on my fingers how many times I have averaged down in my trading career. It is a big " NO NO" unless it was part of the original plan (building a position). I must say though, of the few times I have been faced with the decision to do so; I have fared much better than I would have had I strictly followed the rules. So, you broke rule #1 and #2. What are you going to do now? This is where you evaluate the fundamentals of your investment. In a case like EXCS, the company is fundamentally strong. It is cutting costs and has just begun the reign of its new and experienced president. Couple that with the fact that it has strong support at the range of $0.013 (its all time low) and $0.016 (where its run began in January reaching a high of over 11 cents) and you have a tough decision. You still like the investment but it would take another break of the rules to continue. These kind of risky decisions are what make and break trading careers. The reason I use EXCS as our example is because it is a great illustration of high risk/high reward investment. Let's assume for the moment that you evaluate the risk/reward ratio and decide to average down. The new math...We spent $10,000 to buy 100,000 shares of EXCS - a per share cost of $0.10.Let's say we buy another $10,000 of EXCS at the current trading price of $0.02 cents. We now have an additional 500,000 shares.Now we have a total of 600,000 shares of stock with a $20,000 cost or $0.035 cents per share. Rather than needing a 500% run to return to a break even situation, only a 67% increase is needed. The deciding factor here is whether you have done your due diligence on the company. Fortunes can be made by taking risks on small companies but you have to know your animal. I am typically vehemently against averaging down in my investments but do think there are instances where the increase in risk is worth the reward. It also goes without saying that this can only be done with the strictest discipline and in a moment of deliberate consideration and not panic. The reason this rule exists is because most traders cannot execute it successfully but do so in a moment of crisis. If ever faced with the temptation of averaging down, REMEMBER - rules can be broken occasionally but only intelligently. If you would like to see more trading tips in our newsletters, please drop us a line!As always, do your due diligence and happy trading!
Sincerely, Micro Stock ProfitLabels: EXCS, Execute Sports, Execute Sports Inc.
Stocks To Watch (pt. 2)
 Execute Sports Inc. (OTCBB: EXCS) is showing improvement coming out of its recent corporate reorg. Announcing this morning that not only were December '06 sales up more than 700% over December of 2005, but that the company has repeatedly received 100% on-time performance marks from its Internet sales partners, EXCS seems to have turned things around in a major way. Up nearly 18% this morning on heavy volume approaching the 5mil mark, we suggest taking a look soon before today's breakout continues. Now 100% Dedicated to Maximizing Shareholder Value,we feel that Execute Sports Inc. is extremely well positioned to deeply penetrate the Personal Watercraft ‘PWC’ (market size of >$1 billion and approx 20 million active users) and Recreational Boating ($23.7 billion in 2005 – global, 71.3 million U.S. participants) industries. Labels: EXCS, Execute Sports, Internet, Online Sales
1000% Plus Gains For EXCS WaterSports Div.
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Lots of Action in our Micro Cap World This Week!
