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STOCK:	WJ Communications
STOCK TICKER:	WJCI

DESCRIPTION:

WJ Communications, Inc., a radio frequency (RF) semiconductor company, provides RF product solutions to communications equipment companies worldwide. It engages in the design, development, and manufacture of products for wireless and cable networks, and RF identification (RFID) systems.

COMMENTARY:

WJ Communications, out of San Jose, has been taken way down with the rest of the tech sector here in this recent sell-off. It got all the way down to .40 cents! However, yesterday, perhaps the beginning of a short-term turnaround has started. WJCI came out with guidance on its upper-end estimate for the quarter, with the range now in the 10.5 to 10.7 million, up from 10.1 to 10.5 million. CEO Bruce Diamond commented: "Our fourth quarter revenue results were above our updated estimate announced earlier this month, and we are expecting to be profitable on a non-GAAP basis for the third consecutive quarter since we closed our wafer manufacturing facility in March 2007." He goes on to say: "I am also pleased to report that our customer, who had delayed qualification of several cost reduced parts during 2007, has awarded WJ a substantial portion of their next procurement, which will allow us to re-engage with this key customer. We expect to begin shipments to the customer in the second quarter of 2008 at the rate of approximately $400,000 per quarter,” said Diamond. A couple of important of pieces of information we can derive here: The closing of the wafer plant has scaled down this company to a more hardened cleaner version of itself, and two, the re-engagement of the key customer says WJCI is doing something better than before, or was rewarded based on a factor favorable to WJCI and its industry. So, either way, WJCI looks better right now. The company has over 13 million in cash, and is way down from its 50 day(70 cents) and 200 day ($1.09). With any kind of market momentum, we feel this company's stock could easily rebound from these levels. The stock was as high as 2 bucks back in April, and is down a whopping 60 plus percent. Way over-done, worth a nibble here. Now, again, this is a virtual penny stock, with a smaller float, and is not without risk of course. The stock price has been cited for deficiency, but that's not until June, and second, the company is burning cash. However, again, this is worth a small nibble, as the company closing a plant, and a customer now re-engaging, some of the receivables perhaps will now be coming in, helping stem that negative cash flow activity. Also, the market itself, is an issue, as many investors are very hesitant to step in on pennies. However, we're going to keep a close watch here, no doubt about it, as the price of .53 cents is very inviting! Combined with our suggestion yesterday at .61cents, this will now be eased in an average of .57 cents.

FINANCIAL SNAPSHOT (as of September 2007):

Price to Sales: .85
Industry Average: 1.37
Book Value: .34
Cash Flow based on recent financial (operating): Negative: Sep. 07
Current Ratio: 2.62
Cash Per Share: .19
Quarterly Revenue Growth: neg 22%
200 Day Moving Average: 1.09
50 Day Moving Average: .70
Stock Float: 16.81 million
Shares Outstanding:69 million
52 week Hi: 2.00
52 week Lo: .40
Market Cap: 37 mill

* Sources: Yahoo Finance

STOCK:	Eon Communications
STOCK TICKER:	EONC

DESCRIPTION:

eOn Communications Corporation engages in the development and marketing of communications solutions in the United States and internationally. The company offers the Millennium Converged Communications Platform and the eQueue Multimedia Contact Center Solution. The company has connections to China. On August 20th, eon Communications announced that Hang Zhou East Software Park (Spark) Corporation Limited, located in Hang Zhou, the capital of Zhe Jiang Province of the Peoples Republic of China, had selected eOn’s eQueue Contact Center Solution. The company is also attempting a play in to the VOIP markets.

COMMENTARY:

“This stock had finally hit its 200 DMA, finally, after many days of attempts. Posted a nice run afterward on decent volume, and we will continue to monitor its performance. It's got a nice short term entry point, and is not really over bought by any means. Hang tight, and let's look for the mid dollar range!"

FINANCIAL SNAPSHOT (as of September 2007):

Price to Sales: .98
Industry Average: 2.09
Book Value: .68
Cash Flow based on recent financial (operating): Negative April 07
Current Ratio: 4.22
Cash Per Share: .39
Quarterly Revenue Growth: 17.20%
200 Day Moving Average: .94
50 Day Moving Average: .79
Stock Float: 9.54 million
Shares Outstanding: 13.48 million
52 week Hi: 2.08
52 week Lo: .72

* Sources: Yahoo Finance

STOCK:	Synergx Systems
STOCK TICKER:	SYNX

DESCRIPTION:

SYNX, out of New York, through its subsidiaries, engages in such as items as fire and smoke monitoring, security in airlines and subways, municipals, hospitals, schools and many transportation outlets throughout the New York metropolitan area. Video, smart cards, voice commands are all part of Six’s portfolio in this sector. In its most recent deal, Synergx Systems Inc. announced a systems integration contract for the NYC Transit Facility. This alone was worth $375,000. On August 9^th, the company reported gains in revenues in quarter over quarter from the previous year. In addition, during the three month period the Company secured approvals to commence shipping a new $5.0 million project for a new New York City Subway station security system. Finally, management commented in it August 9^th earnings release, "We are pleased to report that the Company's order position reached $12.1 million at the end of June 2007. With our increased order position from our transit business and growing audio visual sales we do expect stronger revenues, which together with stable fixed overhead and improving gross profit from our service business should result in a return to profitability. We also expect to continue to book additional work, but there is a lag between securing large transit orders and obtaining releases for our transit backlog of projects and realizing revenues from these projects.

COMMENTARY:

When we issued this buy, on October 25. We were hoping to catch an earnings run, and this did move past its 200 DMA of $2.0, to $2.20, on fairly decent volume. However, its remained non-committal, but it's got tremendous support at the $1.80 price. We'll monitor, and hope we can catch fire. It can really move because of the low float, so remain patient.

FINANCIAL SNAPSHOT (as of September 2007):

Price to Sales:.61
Industry Average:1.33
Book Value: 1.12
Cash Flow based on recent financial (operating): positive year end '06
Current Ratio:1.94
Cash Per Share:.14
Quarterly Revenue Growth: 6.20%
200 Day Moving Average: 2.05
50 Day Moving Average: 2.00
Stock Float: 3.50 million
Shares Outstanding:5.21 million
52 week Hi: 2.72
52 week Lo: 1.33

* Sources: Yahoo Finance

STOCK:	WSI Industries
STOCK TICKER:	WSCI

DESCRIPTION:

WSI Industries, Inc. engages in the precision contract metal machining business in the United States. It offers metal components in medium to high volumes requiring tolerances in accordance with customer specifications. WSI Industries offers its products and services primarily to the aerospace/avionics/defense industries, recreational vehicles markets, and computer components and bioscience industries. The company was incorporated in 1950 and is headquartered in Monticello, Minnesota.

COMMENTARY:

WSCI is sitting at its 200 DMA, and is a steaming buy on anything under 5 bucks! On October 23, 2007, this company reported a net increases in earning of 30% percent. Here is what Michael J. Pudil, president and chief executive officer, commented: “Fiscal 2007 closed on several positive notes. First, our fiscal third and fourth quarters both finished with sales in excess of $5 million each, which equates to an approximately $20 million annualized rate. In addition to that, our new business in the energy field continued its dynamic growth with $1.4 million in sales in our fiscal fourth quarter. With the growth, we were able to increase our bottom line by 48% in the quarter.” Pudil went on to say: “As disclosed on October 17, 2007, we expect our energy business to continue its rapid growth with estimated sales of $10 million to $11 million in fiscal 2008. With the addition of this business, we have made substantial progress with our stated goal of diversifying our business base. Overall, we are confident with all parts of our business and we are anticipating that fiscal 2008 will be a year of solid sales and earnings growth.

With comments like this, a positive cash flow, and a company that even includes a dividend, this is one of the better companies sitting under 50 million dollar market cap, with tremendous upside potential. This last correction from $7.40 has resulted in a gift for the investor, and the time is now to get in to this stock, with a target approaching 10 dollars a share over the next year!

FINANCIAL SNAPSHOT (as of September 2007):

Price to Sales: .75
Industry Average: .54
Book Value: 2. 90
Cash Flow based on recent financial (operating): Positive: May 07
Current Ratio: 1.96
Cash Per Share: N/A
Quarterly Revenue Growth: 21%
200 Day Moving Average: 5.15
50 Day Moving Average: 5.30
Stock Float: 2.57 million
Shares Outstanding: 2.70 million
52 week Hi: 7.40
52 week Lo: 2.71
Market Cap: 14 mill

* Sources: Yahoo Finance