Dow Jones 7822.10 -87.40 10:00 am PST, February 26, 2003  NASDAQ 1312.62 -16.36 For info, visit access.smallcapnetwork.com S & P 500 830.31 -8.26 To be removed, please click here Russell 2000 358.47 -2.73 VOLUME 03: ISSUE 01  Where's the %$*&^^#  Remote? Is your coffee table littered with more electronic gizmos than the bridge of the Enterprise?  If Tuesday's consumer confidence number-at 64, the lowest in almost a decade-is any indication, war, snow, job insecurity and crappy markets will keep everyone close to home for the foreseeable future. And that can mean only one thing: time to buy a new remote control. If the looming war on Iraq plays out like the last one, we'll all be glued to our TV's as CNN and MSNBC pull out all the stops. Unlike Afghanistan, the Bush administration apparently has a vested interest in allowing the public to follow the progress of what, by all accounts, should be a quick and surgical strike--the ultimate Reality TV.  One can only hope that 'Are You Hot?' meets the same fate, but I digress. One For the Money Without a remote, electronic devices are just so much noise. Over the years, there has been a myriad of handheld devices that have attempted to bring a jumble of controllers onto one platform. In the old days, a universal remote could access some, but not all of our gadgets. The process was an exercise in frustration as we moved to satellite dishes, DVD players and digital TV. Fortunately, those days are over. And that's good news for California-based Universal Electronics (UEIC: NASDAQ). The story is surprisingly simple. UEIC develops devices and solutions that allow universal wireless control of virtually any combination of entertainment platforms through the world's largest database (140,000) of infrared codes. Couple that with 80-plus patents held (or pending) by the company along with software, licensing and micro-controllers and the story deepens.  Growth Prospects aren't Remote According to media researcher Paul Kagan Associates, homes with interactive TV's will grow to 45 million by 2005 and 60 million by 2010. Consolidation of this home networking trend is obviously still a large growth sector.  Original equipment manufacturers make up the majority of UEIC's customer base. The list of corporate clients with which it has forged strategic alliances reads like a who's who of the electronic home automation and entertainment market.  Universal Electronics' OneForAll remote control is the number one handheld controller worldwide. One of the company's newest products is Kameleon, a state of the art, Digital Ink touch screen controller. With UEIC's new Nevo software, it plans to make inroads into complimentary computing platforms with customers such as Hewlett Packard and Viewsonic. R&D will continue to keep products current as intellectual property and patents are expanded. My personal favorite is the Midas wristwatch/remote controller. Nirvana.  Surfing the Fundamentals Universal Electronics should also be of interest from a fundamental perspective. The stock's trading at $9.50; the company boasts $3 per share in cash and has no debt. First Call's analyst consensus has the company posting 43 cents for fiscal 2003 for a forward price/earnings ratio of around 20 times. Sales got whacked a bit in 2002 as the company reported $104 million versus $119 million for 2001. Earnings halved as well at 42 cents for 2002 against 78 cents for 2001. With entertainment systems slowly but inexorably converging with computers, simplicity will be needed as that division ultimately disappears. Lest we forget, it was not too many years ago that more VCR's had a flashing 12 o'clock than didn't. Universal wireless connectivity becomes increasingly important as the systems become more complex. Being on the cutting edge of this trend will likely yield decent returns for shareholders in the medium and long-term. Look Beyond the Conventional Small Cap Digest illuminates nifty companies that don't get the kind of broad exposure that the usual group of suspect's garner. Floating around the market are interesting small cap companies such as UEIC, that have found a niche and are managing to expand their businesses and make money for their shareholders. Granted, no company is going to flourish all the time. The trick for investors is to factor in those economic and social trends that paint a positive backdrop for a company's goods or services and establish an entry point that makes sense in their individual case. Then watch it like a hawk. D I S C L A I M E R : The SmallCap Digest is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. SmallCap Digest is not a registered investment advisor or broker-dealer. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward  maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, this publication accepts compensation from third party consultants and/or companies which it features for the publication and circulation of the SmallCap Digest or representation on SmallCapNetwork.net.  Likewise, this newsletter is owned by TGR, LLC.  To the degrees enumerated herein,  this newsletter should not be regarded as an independent publication. Click Here to view our compensation on every company we have ever covered, or visit the following web address:  http://access.smallcapnetwork.com/compensation_disclosure.html for our full compensation disclosure and http://access.smallcapnetwork.com/short_term_alerts.html for Trading Alerts compensation and disclosure. TGR Group LLC has not been compensated for this report. All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. The editor, members of the editor's family, and/or entities with  which the editor is affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication. The profiles, critiques, and other editorial content of the SmallCap Digest and SmallCapNetwork.net may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein. THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN  SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN  CONSENT OF THE EDITORS OF SMALLCAPNETWORK.NET. We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at  http://www.sec.gov/consumer/cyberfr.htm . Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.