Dow Jones 12161.92 +28.52 12:35 pm PDT, March 15, 2007 NASDAQ 2376.86 +5.12 For info, visit access.smallcapnetwork.com S & P 500 1392.68 +5.51 Change your subscription status here Russell 2000 781.64 +5.96 VOLUME 07: ISSUE 29 Last Chance To Make Any Necessary Changes! This is it! The next Small Cap Network Newsletter will be delivered from a different e-mail address and sender. In order to ensure you continue to receive our e-mails, you may need to take action today. To try and minimize any problems with receiving the newsletter in the future, we highly recommend at least taking these two actions....    'Whitelist' all email with 'smallcapnetwork.com' AND 'smallcapnetwork.com' in the 'From' (or Sender) header.  If modifying an existing whitelist entry for the newsletter, replace all occurrences of 'smallcapdigest' with 'smallcapnetwork'. Also, replace 'lyris.smallcanetwork.net' with 'lyris.smallcapnetwork.com'.  For additional help on whitelisting, please see our instructions located here. For additional assistance getting the newsletter delivered, please write to our webmaster.  On with the show.....    Stockgroup Set to Soar in '07  Hot off the presses (literally)! Time is of the essence today, as we want to make sure all of our readers receive and read today's newsletter before 4:00 p.m. EST. Why? Because you may want to jump in on Stockgroup Information Systems' (OTCBB: SWEB) conference call - so you can get the whole scoop on their earnings announcement, which was just released at 3:00 p.m. today. We think you'll be as excited as we were.  Total revenues for 2006 came in at $7.7 million versus $6.1 million from the year before...a 27% increase. Advertising revenues increased by 36% in 2006 from 2005, and represented 55% of total revenues in 2006. Financial Software and Content Systems revenues increased by 18% in 2006 from 2005, and represented 45% of total revenues in 2006. Due to some expansion expenditures incurred in 2006, we saw a net loss of $791K. We feel the loss was a good one to take though, as it meant the further development of products and the company's sales force. See the press release below.  Th numbers were right in line with our expectations. However, there's a major difference to note about the prior year and the coming year...and the impact it had on those reported numbers. In short, comparing 2006's to 2007's results is like comparing apples to oranges. Why? Some of the key revenue drivers weren't launched until mid-year, if not late in the year. Plus, some new revenue centers weren't even launched until 2007.  StockStream - the company's subscription-based market data service - wasn't launched until mid-2006. StockStream Platinum wasn't launched until Q4 of 2006, and really wasn't kicked off until February of this year. Stockgroup bought the Mobile Finance Division of Telecommunication Systems Inc. in early February of this year. The mobile finance enterprise did about $6 million in profitable revenue last year. Those sales won't show up in the 2006 results, but will in 2007. Reuters plans to launch a wireless data service of their own in 2007 that will use the StockStream platform, which will show up in 2007's sales where it didn't last year. So, while 2006 looks plenty good enough, there's a major gap between 2006's full-year numbers and what's currently up and running for fiscal 2007. The current year stands to look a whole lot better right off the bat. Investors take note - as you'll read below, based on the launch and growth of all these new profit centers, we think SWEB is looking like an outstanding idea with major growth potential.    A Realistic Valuation Scenario After adding in today's numbers to the acquired company's sales from 2006, and assuming nothing at all changes for either enterprise in 2007, then we'd guess Stockgroup is probably on track to do about $14 million is sales this year. The company's market cap, on the other hand, is still only about $25 million. So, SWEB's valuation is still a little less than 2 x sales.  Folks, we'll repeat now what we've been preaching for a while....we just think that's too low. Comparable companies have been acquired by larger media firms for as much as 4 to 5 x sales.  As an example, Dow Jones bought MarketWatch.com for $519 million when the website was only generating $80 million in annual revenue. The price tag was 6.5 times sales. D&B bought Hoovers for $117 million, though Hoovers only saw sales of $32 million over the twelve months before the acquisition. That's 3.6 times annual revenues. And the list goes on and on.  Even a conservative market valuation estimate of 3 x sales would put the market cap around $42 million....and put the share price somewhere around 70% above current levels.  But here's the thing....who'd be crazy enough to think Stockgroup isn't going to experience some serious sales growth? Not us! Check out some of the recent high points we've covered in just the past few weeks....  StockHouse.com is the 2nd stickiest Canadian website  StockHouse.com is ranked the #1 (Alexa) Canadian site for retail investor-generated content  BullBoard.com is the top-ranked investing board in Canada, and ranks in the top 5 financial communities in North America  Stockgroup's StockHouse.ca is ranked #1 in Canadian user page views  How can you look at those facts and not think they'll be able to keep growing revenues in a huge way?  Point being, Stockgroup just seems undervalued in our eyes whether they ever get bought or not. We suspect each dollar they put on the top line is going to be magnified at least 3 to 4 times in terms of valuation...and that means some major upside possibilities could be in store for interested investors. If sales get to, say just $20 million, and the valuation reaches a modest 3 x sales, you're looking at a market cap of $60 million.....more than twice what it is now.  When the rest of the market finally figures out just how big the opportunity is here, we think SWEB shares stand to gain big-time. In fact, investors may be warming up to the idea already...    The Breakout, Part II ? We may have already seen some evidence of the rest of the market 'figuring it out'. Take a look at the nearby chart. We first mentioned a breakout was looming back on March 9th when the stock was attacking 'new high' levels. At the time, that line in the sand was 77 cents. The high of 81 cents and the close of 79 cents on the same day pretty much convinced us our opinion was right.  But, we've gotten some more evidence in the meantime....SWEB has not only reached those newly-achieved trading levels, but has held onto them for six straight trading days now. We think a new, higher foundation has been laid. Heck, today's strength practically qualifies as yet another breakout to us.  So, the only thing today does for us is confirm our initial expectation that good corporate performance would be translated into good results for shareholders. Don't worry of you weren't on board yet though....we don't think the party's over yet. Our view is the same as it was - we think aggressive traders could still do very well with a little exposure to the SWEB opportunity. Our target remains at $1.51...nearly 100% above the current trading level.  Anyway, that's our take. If you want to hear it straight from the horse's mouth (figuratively speaking), then keep reading....you'll get your chance in just a few minutes.    Conference Call Begins Shortly (Literally)  Ladies and gents, everything above is just a sampling of what an investor may want to know. To get the whole story and more, we recommend you listen in on the conference call at 4:05 p.m. EST today. YES...just a few minutes from now (assuming you see this shorty after we first published it).  To participate in the conference call, just dial 1-866-400-2280 five to ten minutes prior to the start time. Or, to just listen to the live webcast, please go to www.stockgroup.com. (Webcast participants should have Windows Media Player installed prior to connecting to the call.)  No agenda for the call has been established yet, but obviously they're going to be discussing results for the previous fiscal year, and things to look forward to in the coming year. It should be a great chance to gather up more details than we were able to lay out for you in this limited time.    Stockgroup Announces Record Q4 and Fiscal 2006 Year End Revenue 16th Consecutive Quarter of Revenue Growth    Thursday March 15, 2007 -- NEW YORK, NEW YORK -- Mar 15, 2007 -- Stockgroup Information Systems Inc. (OTC BB:SWEB.OB - News)(CDNX:SWB.V - News), a leading financial media company focused on user-generated content and collaborative technologies, announced today that it reported record revenue for Q4 and fiscal 2006. A conference call will be held today at 4:05 PM EST to discuss the results.    Selected comparative financial information for the three-month and twelve-month periods ended December 31, 2006 and 2005 is shown below (All numbers expressed in US dollars):  Stockgroup(TM) reported record Q4 revenue of US$2.3 million, up 28% over the previous year and 21% over Q3 '06, and Q4 earnings of US$88,000. The Company ended fiscal 2006 with US$7.8 million in revenue, an improvement of 27% over fiscal 2005. The Company posted a loss of US$791,000 or US$0.02 per share for 2006 due to the previously announced investment in product development, sales, and leadership to support the Company's growth. The Company used US$290,000 of cash from operations for the year and maintains a strong cash balance of over US$2 million. "We are very pleased to have finished a record year with a strong 4th quarter. The leadership team we have built over the past sixteen months has demonstrated execution success," stated Marcus New, President and CEO. "Web 2.0 is creating some of the fastest brands in history and we believe that the progress we made in 2006 has positioned us well to capitalize on this trend in 2007." 2006 Review  Last year, Stockgroup set three key objectives:  1. Focus on building the StockHouse(TM) brand in its existing community of users and extending this brand throughout North America to capture a larger segment of the online advertising market.  Significant components of StockHouse were successfully launched in 2006, including enhanced collaborative functionality in the form of StockHouse Blogs. StockHouse Editorial also grew significantly in the number of industry articles produced, thus offering greater depth and diversity in editorial content to users.  The Company's success in meeting its objective can be measured by record traffic on StockHouse with an average 767,000 unique visitors per month, up 30% over 2006, and an average 74 million page views per month, up 27%. StockHouse.ca was ranked #1 in Pages Per Visitor by comScore Media Metrix Ad Focus report in December 2006, delivering more pages per user than any other online entity in Canada. comScore reported that the average minutes per visit on StockHouse by visitors 35+ was 5 times that of Yahoo! Finance Canada, Sympatico MSN Finance and The Globe and Mail's Globe Finance in the Business/Finance - News and Research category. Advertising revenues for 2006 increased 36% over the previous year to US$4.2 million.  2. Take Stockgroup's core strengths in collaboration technologies, portfolio management tools and analytics, and the enablement of social networks to the professional portfolio solutions market, where it will participate in an estimated $2 billion market opportunity.  The official launch of Stockgroup's portfolio management solution, StockStream(TM), took place in 2006 and represents the only web-based portfolio management application on the market that combines tools and analytics with a variety of news and investment-related information, including user-generated content from online social networks. This fee-based application on StockHouse allows users to view their favorite online content while monitoring their stocks. StockStream Platinum, the licensable version of StockStream, uses Stockgroup's collaborative technologies to strengthen the advisor-client relationship through co-browsing, model portfolios, advisor set alerts, and extensive functionality to enhance business knowledge for the advisor and the firm.  3. Invest in product development and marketing to increase Stockgroup's position in its selected North American markets. This includes expanding the community aspect of StockHouse and integrating collaboration technologies into the Company's portfolio management and desktop applications to enhance Stockgroup's leadership position in the North American media and software markets.  Stockgroup's new product offerings discussed above are examples of the Company's success in delivering on its third objective for 2006.  In addition, the Company continued to build its executive leadership team and board, adding proven experienced leaders in finance and sales and two outstanding industry executives to its board.  Thomas Baker, Stockgroup Board of Directors  Mr. Baker has more than 25 years of experience in print and online media. He was the founder and general manager of The Wall Street Journal Online (wsj.com), a publication of Dow Jones & Company, where he led the start-up effort and grew the Online Journal into a $60 million business unit and the largest paid news and information site on the web.  Steve Zacharias, Stockgroup Board of Directors  Mr. Zacharias is the founder and managing director of Transact Capital Partners LLC, a Richmond Virginia based investment banking firm serving small to middle market privately-owned businesses. Before founding Transact, he served as corporate treasurer for Media General Inc (NYSE:MEG - News), a Fortune 1000 TV and newspaper media company, where he was responsible for more than $2 billion in debt and equity financings.  Focus for 2007  In 2007, Stockgroup will continue to fulfill its mission of helping investors create and manage wealth through its platform of Analytics, Content - aggregated and proprietary user-generated - and Collaborative technologies. The core initiative will be the launch of the next generation of StockHouse. This next generation of StockHouse will combine the Company's existing financial community focused on user-generated content with its collaborative technologies and some of the best social network functionality to create the next generation of how investors communicate in the financial markets.  The following objectives provide the framework through which Stockgroup will achieve its goals:  1. Continue to invest in product development and launch the next generation of StockHouse, to transform it into the leading Web 2.0 financial portal in North America.  2. Internal growth and a recent acquisition will enable the Company to increase its revenue by more than 100 percent over 2006 results.  3. Extend Stockgroup's existing backend infrastructure to create a more scalable and secure platform. This will enable the company to gain a greater market share among intermediaries and individual investors.  4. Continue to evaluate strategic acquisitions.  In January 2007, Stockgroup acquired the Mobile Finance Division of TeleCommunications Systems Inc., a Maryland based provider of wireless data solutions. Stockgroup gained a proven set of wireless financial products for migration onto the Company's platform, which saves Stockgroup significant development costs and go-to-market time. The Company also gains a large customer-base through which it can leverage its existing product line.  Conference Call Details  To participate in the conference call, please call 1-866-400-2280 five to ten minutes prior to the start time at 4:05 PM EST. To listen to the live webcast, please go to www.stockgroup.com  The earnings call will be recorded and accessible on our website for a period of one month. Participants intending to access the webcast should have Windows Media Player installed prior to connecting to the call. (For full results, click here.)  About Stockgroup Information Systems Inc.  Stockgroup(TM) is a financial media company focused on user-generated content and collaborative technologies. The Stockgroup platform for web-based portfolio management and financial content is licensed to top North American brokerage firms and media companies. The Stockgroup platform is also extended through StockHouse.com, a leading online financial portal owned and operated by Stockgroup. StockHouse.com is home to BullBoards(TM) message board - Canada's largest community of active investors. Recognized for its engaged audience, StockHouse.com provides a sought-after demographic for advertisers.  Trademarks  Stockgroup, StockStream, StockStream Platinum, StockHouse, BullBoards and @ The Bell are proprietary trademarks of Stockgroup Information Systems Inc. and/or its affiliates. Other names may be trademarks of their respective owners.  To find out more about Stockgroup (OTCBB: SWEB, TSX-V: SWB), visit our website at www.stockgroup.com.  This release contains "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be "forward looking statements." Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through the use of words such as "expects", "anticipates," "estimates", "believes", or statements indicating certain actions "may", "could", or "might" occur. This release should be read in conjunction with the audited consolidated financial statements and the accompanying notes thereto, and other parts of Management's Discussion and Analysis included in our Report on Form 10-KSB filed on www.sec.gov for the year ended December 31, 2006, and other recent periodic reports which are on file with the SEC and available at the SEC website at www.sec.gov. Stockgroup undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date of this press release. All forward looking statements are qualified in their entirety by this cautionary statement.    The TSX Venture Exchange and the OTCBB have not reviewed and does not accept responsibility for the adequacy or accuracy of this press release.  Contact: Contacts: Stockgroup Information Systems Inc. Steve Gear Director of Capital Markets (604) 288-2861 or Toll Free: 1-800-650-1211 Website: http://www.stockgroup.com Source: Stockgroup Information Systems Inc.   We Value Your Feedback   Got comments, questions or suggestions? Send 'em on over: Email the Editor 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 CEL-SCI's Informed-Investor Webcast Now Available CEL-SCI Corporation (AMEX: CVM) has posted their newest investor webcast. Go to this page to review the whole presentation in its entirety. Everyone is encouraged to take a look, but if you're not familiar with the company or its drug, then it's definitely a good idea to pop in.   Challenger Adds Six Dealers To The Sugar Sands/Gekko Team The march continues. Tuesday morning, Challenger Powerboats (OTCBB: CPWB) announced they've added six more dealers to their Sugar Sands and Gekko distribution network. Already 100+ strong, this latest batch of additions will put the two boat lines in front of new customers from coast to coast.  As a quick reminder, the Sugar Sands and Gekko franchise was good for about $12 million in sales last year with roughly 100 dealers. Having added six new ones in just the first couple of months after Challenger acquired the company, we have to think this is the shape of things to come. If they can add six new dealers every two months, that's 36 new dealers per year.....about a 30% increase. Maybe that's low, or maybe that's high. But, we don't think it's unrealistic.  And let's not forget that Challenger - as it stands right now - only has two dealers (though more are in the works). Previously, the company sold boats directly to consumers....a tough way to go. So, for these higher-end Challenger boats, the sky really is the limit in terms of getting more people to push them.  The company (Challenger) did about $1.7 million in sales in 2005, and we're guessing about $1.0 million in 2006.....with no dealers. With a built-in 100+ dealer pool to market themselves to, we feel the Challenger footprint could grow at an even stronger pace than the Sugar Sands/Gekko network could.  For more on the additional dealers, click here for the press release.  Subscribe Information is power and timely information is profitable. Become informed and profit from Small Cap Network Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. 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