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Re: None

Friday, 01/12/2007 2:54:46 PM

Friday, January 12, 2007 2:54:46 PM

Post# of 585
My pick is TSSW.OB

Company earned .014/share last quarter. Three solidly profitable quarters in a row (although no sequential growth). Heading into seasonally stronger Q4 and Q1. I think they could post earnings of .02/share for Q4. Should be another very favorable year-over-year comp. Annual numbers should look terrific as well.

Outlook for Q1 should be positive with the launch of Microsoft Vista later this month. TSSW will benefit from Vista in 2 ways. First, their Bios upgrade business should get a boost...perhaps a big boost. Second, the company announced earlier this week the release of Vista Agent:

http://biz.yahoo.com/bw/070110/20070110005260.html?.v=1

This useful little test should drive increased traffic to TSSW's other websites.

The Q4 report could be out next month (last year it was released on 2/27). I think the stock could pop 50% from here if Q4 earnings come in at .02/share. Longer term, they're going to have tougher comps in 2007. But I still think the stock could double or more this year after considering the following points:

TSSW is in the software/internet sector.

Margins are incredible (gross margins an eye-popping 98% last quarter!).

Share structure is attractive with only 12M shares O/S.

Balance sheet could be better, but it's ok.

Stock doesn't seem to have much of a following.

Company is not averse to putting out PR's.

Finally...revenues are still fairly small at $700-$800K each of the last few quarters. Company should continue to grow organically as well as through acquiring additional websites. If we see quarterly revenues of $1M+ this year, with those huge margins...it should translate into quarterly earnings of .03+/share.








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