Dow Jones 11960.51 +12.81 6:43 am PDT, October 16, 2006 NASDAQ 2357.29 +0.00 For info, visit access.smallcapnetwork.com S & P 500 1365.62 +0.00 Change your subscription status here Russell 2000 762.65 +0.00 VOLUME 06: ISSUE 82 Execute Sports is Playing Like an All-Star Never let it be said we didn't give you plenty of fair warning. Back on September 25th, then again on October 3rd, we mentioned this outfit was on the right track. Sure enough, the company made good on their potential. Execute Sports (OTCBB: EXCS) just released a glimpse of how their quarter is going for their water sports business. Would you be impressed by a sales increase of about 800% so far? That's exactly what they reported...and the quarter isn't even over yet!  Better yet, shares of this company hit an all-time low on Friday. Translation? It's a big opportunity for owners. Even if EXCS shares only reclaim their all-time high of 55 cents hit in March (they've only been public since February), then it would still be more than a gigantic 500% increase above Friday's closing price of 8 cents. And truthfully, that may be cutting their appreciation potential short.  So, if you're like us, and constantly scouring the market for undervalued stocks, then this is easily one worth considering. After all, how long can a company with monster-sized revenue increases - and not just in one division - see its shares continue to sink? We don't think it's a scenario that's going to last very long. Eventually, the rest of the market should see the same potential in Execute that we see.  To reiterate the point we made on October 3rd....when stocks don't reflect company results, opportunity appears. In this case, the opportunity is in owning a piece of a company that may be on the verge of proven viability. The numbers certainly look impressive, making the stock a turn-around candidate. All that's needed is a catalyst. Today's news could do the trick, but if not, it's not like the company isn't doing plenty of other great things to tout as well. We think any of this good news could spark a fire, quickly shutting this window of low-price opportunity. Read on.    The News In a nutshell, Execute's fourth quarter sales of wetsuits, vests, and rash guards are 800% better than where they were at this point in Q4 of last year. And no, it doesn't appear to be a fluke - the sales were earned due to the efforts and overhaul of Execute's water sports division. There are two key contributing factors to their success.  First, their typical selling season has been started earlier. Previously, most of these water sport items were sold between January and June. Now, however, a stronger market presence is allowing the company to push products out more consistently year-round - resulting in a particularly nice boon for Q4. Recent agreements with distributors have made this change possible. For instance, in May, Execute entered into a new partnership with Rincon Distribution. Rincon is a supplier to over 500 retailers. In July, we learned June's online sales volume had more than tripled since its March launch through leading retailers including Dick's Sporting Goods, The Sports Authority, Sport Chalet, Sports R Us, GI Joe's, Fog Dog, and others.  Neither of those partnerships was in place last year. Both of them, though, are enormous doorways into the water sports market.  Second, as we mentioned the last time we looked at Execute, the company has the right 'people power', from top to bottom. The most recent addition was hiring former Body Glove Wetsuit Inc. Director of Sales Celeste Berouty as Execute's Vice President of Sales. We knew it was a significant victory for the company when the news was originally released. But, investors as well as industry insiders are still buzzing about Berouty's move. Apparently she was regarded as one of the main reason for Body Glove's wetsuit success. Another key human asset is Craig Warner, one of Execute's vest and wetsuit team members. Warner just won the world championship in his class of PWC (personal water craft) racing. Needless to say, his status and visibility while wearing Execute gear is the kind of advertising you couldn't pay for if you wanted to.  Better still, there's even more business in store next year for Execute's water sports division. Remember the Kampus-branded wakeskate venture Execute forged in the middle of last year? The product line will be all new business in 2007...within a $150 million annual market. Even just a small sliver of that pie would be an enormous boost for Execute's bottom line.  And the stunning part is the company is expanding its snowboard business in a similar fashion. Don't forget, in September, Execute signed a five-year deal with a major European distributor. Under the terms of the agreement, UDT has exclusive resell rights in Europe, but must sell a minimum of 80,000 units. Priced at about $400 each, the math works out to be a pretty sweet deal for Execute.    An Undervalued Stock? The point is, Execute appears to be setting themselves up for a very prosperous future...and they've done it all within the last six months. Assuming even the worst-case scenario with all of these partnerships, we'd be very surprised if the company didn't do much better than their historical results. As such, the stock may still be an outstanding ground-floor opportunity...one worthy of a little risk.  While buying a stock at a low point is a little like trying to catch a falling knife, in this case, there's a little bit of built-in risk control. At only 8 cents, the maximum per-share loss you could take is....8 cents. Of course, that would still be a 100% loss if you're betting the farm, but obviously that wouldn't be prudent. EXCS is a penny stock, and should be treated as such. However, the potential reward is more than commensurate with the potential risk here. And, being relatively oversold right now makes an upward move above the current trading level just a little more likely.  One of the other key bullish attributes about this chart is not something that we see, but something that we don't see. Despite the fact that the share price is less than half of what it was in July, the high-volume selling has dried up. In other words, it may be possible to chalk up the recent weakness to market drift, rather than a concerted selling effort. That's good news for any buyers, since it means you're not likely to be fighting any particular counter-trend. In fact, we've seen the buying volume perk up over the last few days, even if the stock hasn't been able to move much yet.  In our opinion, the company's revenue-building efforts are becoming a reality, making Execute a trading idea with a balanced risk and reward. And, it doesn't hurt that investors are seeing a much lower price now than they were just a few weeks ago. Speculative investors may want to take a very close look. Here's the press release:    Execute Sports Posting Stronger Year-Over-Year Sales in Watersports Division for the Fourth Quarter -- Up Approximately 800 Percent for the Quarter-to-Date  SAN DIEGO, Oct. 16, 2006 -- Execute Sports, Inc. (OTCBB: EXCS) announced today that fourth quarter sales for its water sports business are up approximately 800% over the same period last year.  Geno Apicella, VP Watersports, stated that, "We are pleased to see stronger penetration into a number of key accounts with our wetsuit, vest and rash guard products, which has resulted in stronger fourth quarter sales for our business. Historically, our water sports sales have been heavily weighted in the January through June period but we expect to see this trend of expansion in our selling season continue. We are committed to building a strong line of rubber products under the Execute brand that appeals to the consumer from both a performance and price perspective." Apicella added that, "A number of key factors should continue to drive our growth in the water sports business going forward, including the recent addition of Celeste Berouty as our VP of Sales (formerly Director of Sales for the wetsuit division at Body Glove), the expansion of our sales focus into the PWC (personal water craft market), and our debut in 2007 of our patent-pending Kampus water sports shoe line to the market."  Execute Sports also wants to congratulate Craig Warner (Kampus and Execute team pro) for winning the PWC racing National Championship this year in the Pro Runabout 1200 division.  About Execute Sports, Inc.  Based in San Clemente, California, Execute Sports, Inc. develops performance products including wetsuits, vests, rash guards, snowboards, wakeskates, bindings, bags and apparel for the action sports industry. The Company's brands include Execute Wetsuits, Academy Snowboards, Kampus Wakeskates and Kampus Shoes, Collective Development Bindings and Collective Development Bags. For more information, go to http://www.executesports.com and http://www.academysnowboards.com.  Contact:  Execute Sports  Todd M. Pitcher  (858) 518-1387  Todd.pitcher@executesports.com    We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 4653 Carmel Mtn Rd Suite 308 #402 San Diego, CA 92130 Don't Miss Eagle Broadband's Mid-Quarter Conference Call If you're following the emergence of Eagle Broadband (AMEX: EAG) along with us, then you definitely don't want to miss their mid-quarter conference call this coming Wednesday (October 18th) at 5:30 PM EST. The company gave the completed IPTV broadcast reception station in Florida as the main discussion topic, but we suspect there will be a lot more put on the table than that old news....it was finished and became operational several days ago. And although we don't know exactly what else is going to be said on the call, we have little doubt it's going to be worth the time, whether you're already a shareholder, or just an interested party. And if you're not following the emergence of Eagle Broadband as a key IPTV player, you may want to think about it. The stock is up 46% from September's low of 52 cents, and is up 28% since we began covering it on September 15th. However, the recent rally has only scratched the surface of how much more recovery room lies ahead. Be sure to look through last week's Eagle-focused newsletter edition to get caught up.  In the meantime, you don't want to miss this call.....err, webcast, actually. To listen in, you'll need to use a computer with speakers, rather than a phone.  To submit questions, or to learn how to participate in the call, click here.    On The Go Just Keeps Raking Sales In Although we've been telling the same story almost ad nauseam, it's still a story we're glad to be able to tell. On the Go Technologies (OTCBB: ONGO) has made yet another big sale, this one to a financial service firm. The order - for $75,000 worth of servers - will be shipped to one of the firm's Toronto office (presumably the one responsible for technology), although the company serves clients across the globe. We won't repeat ourselves here, but if you want to catch up on all the good news, you may want to scan through all of our recent blog entries and newsletter editions covering On The Go. Just click here.  And yes, we think if you're looking for a higher-odds turn-around play, this may be one worth a much closer look.  Subscribe Information is power and timely information is profitable. Become informed and profit from SmallCapDigest Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the SmallCapDigest Email Newsletter on a regular basis. To ensure newsletter delivery, you can add any additional email addresses you may have to the SmallCapDigest Member List. Receiving the SmallCapDigest Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the SmallCapDigest recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery. 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