To OTC Journal Members:
 

Year End Wrap Ups in December

It's getting to that time of year when I start publishing year end reviews on the microcap companies we follow. Of the nine the OTC Journal currently follows, several will be dropped to make room for others with more upside. In the microcap world you are inevitably going to have some losers and some disappointment. The best microcap investors know and accept this fact of life, and are not afraid to move on without spending too much time looking in the rearview mirror. Before's year's end you might want to lock in some tax losses on one or two that haven't worked out, or add to a position if the stock provides a favorable entry level.

NetWork Installation issued a press release today identfying the direction the company will take in '05. This give us an ideal opportunity to lead off with NWKI, a company I believe can repeat if not better in '05 their 100% growth rate from '03 to '04. We will definately be following this one into 2005 because the company doubled in size from '03 to '04, and the market for their products and services is projected to grow ten fold by 2007.

We are also going to be introducing a new component to the OTC Journal service which will provide live commentary during active trading days. This should help us maximize return and minimize trading mistakes. Stand by for more details before year's end. We are working on the technology right now.
 

NetWork Installation (OTC BB: NWKI); Strategic Initiatives for '05

NWKI issued a press release after the close today highlighting '04 achievements and covering their strategic initiatives for '05. NWKI provides communications solutions to a vast number of high profile clients. Names include LA County, Orange County, UCLA, USC, Safeway, Wells Fargo, WalMart, and many others.

The company is intimately involved in the nationwide roll out of Wi-Fi networks. They are also focusing a lot of their energy on VOiP installations for corporations. During the course of the year they started doing telecommunications installation which provide a recurring revenue stream.

Their growth rate slowed a little in the 3rd quarter as the company completed the integration of the Del Mar Systems acquisition, and spent some time setting its sites on ways to accelerate growth profitably in '05.

Discussions with the company lead me to believe they can match '04's 100% growth rate in '05 from simple organic growth. They will be benefitting  as installations get started for the next generation of Wi-Fi known as Wi-Max. It's like Wi-Fi on steroids. At the same time, the company is actively pursuing strategic acquistions which could include regional companies in the same business, or companies with proprietary communications technologies.

As you can see from the chart, the stock has been all over the place in '04. I have followed the company for roughly 18 months, and have observed its personality. The stock tends to have big price and volume surges three to four times a year.

The May to August sell off was particularly tough on NWKI. The stock dropped from a high of $2.60 in April all the way to a low of $.84. The stock has now more than doubled since the August low, but has yet to achieve the high set in early 2004. It made a valiant effort in October, but was pushed back down.

However, since the August low was established, the stock has been in a solid uptrend. The lows are continuing to get higher, and the highs are getting higher. Until that trend is reversed with a solid break below the red line, you can assume this stock has more room to run to the upside.

While there are certainly no guaranttees, look for NWKI to pull a major coup of some sort early next year, which should result in another major volume and price spike like we had in March and October. Hopefully, we will eclipse the October high, and shareholders who have been accumulating will be rewarded for their patience.

Management at this company is aggressively pursuing a sensible growth stategy. When they find the right fit, look for more exciting action. In the interim, I strongly recommend continued accumulation. This company is in the right industry at the right time. 

Here is the complete text of today's news release for your review:
 

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