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Neo Material Technologies Inc. (NEM.TO)

HOLD
(Market Call Minute.) Fabulous company but no short-term catalyst to the upside.
BUY
Been disappointed with name. Either it’s a value trap or people don’t believe in the future growth of the company. Industries fine, earnings are OK yet no one cares. Very cheap with decent potential.
DON'T BUY
Disappointed in the stock reaction, not the execution of the company. Doesn't know if it's a value trap, people don't believe in the growth of the company, their competitors are doing fine, the industry is doing ok, their earnings are pretty good, but nobody cares. Very cheap stock with a lot of potential, and it should be doing better. His buying style is to buy on strength, so he wouldn't buy it.
STRONG BUY
Manufacture magnets for miniaturization products. Business is fine and they will be debt free this year. Trading at about 12X earnings so it is very, very cheap. They have the ability to make acquisitions utilizing their balance sheet.
BUY
Manufacture industrial powders such as metal powder that is used in TV screens, etc. Have technology that purifies them to a level that is very interesting to electronic companies. Trades around 12X earnings. There is good potential.
TOP PICK
Produce neodymium, which goes into magnets and lanthium. With any PDA, cell phone or electronic appliance, they use neodymium. Prices are increasing which indicates demand increase. Have a very good supply source. Lanthium goes into flat-panel screens. The company has a very big global opportunity. They have great sales and great management and well financed. Trades at about 12 or 13X earnings and yet revenues are starting to grow.
COMMENT
A great business that is generating good growing cash flows. They have patents that he views that the business could fall right off the table in 2013/2014. Apparently have made some developments that give it a more sustainable story. Will be revisiting this stock.
BUY
Had a big base building between 2004 and 2006 and broke out at about $2.50. Since then it has done very well and has been hugging its 200-day moving average and still continues to do so. The recent selloff is just profit taking and wouldn't worry about it too much. Use a mental stoploss of around $3.80 - $4.00,
BUY
Manufacture neodymium for high intensity magnets. Used for automobile power seats, power doors, etc. There is a question as to whether they are actually going to make their numbers this quarter as some customers may have been pre-buying. But their largest customer is expected to have strong sales. Ranks #23.
BUY
Deals in rare earths and zircomium. Has a market cap of 1/2 a billion. Trading at 15 times earnings. Not a big cap or well established. Don't use the rainy day money, but worth it for a "flyer".
WAIT
Manufacturers high-density magnets, which has a high demand. Ranks 28 in his model, so is roughly in the top 5%. It is still unclear as to whether they can extend the patents. Expected to earn $0.27 and trades at a 14 P/E. Wait until there is a decision on the patent.
BUY
Cheap. They work in high-density magnets. A key date is roughly June/07 when they are expecting to know if they can extend their patents.
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