Dow Jones 13110.05 -120.96 5:19 am PST, November 16, 2007 NASDAQ 2618.51 +0.00 For info, visit access.smallcapnetwork.com S & P 500 1451.15 +0.00 Change your subscription status here Russell 2000 771.60 +0.00 VOLUME 07 : ISSUE 108 Smart Energy Enters 'Renaissance' Era, Stockgroup Q&A Smart Energy's wingspan continues to grow, this time reaching into the Philippines. The company just announced a new distributor has been signed on there, and their second order with Smart Energy has already been placed. We've got the details and impact on that below.  We've also got some follow-up thoughts about Stockgroup, its shares, and Thursday's response to Wednesday's earnings and conference call. Let's just say it wasn't good, but we also want to point out how a bit of a blowout may have been exactly what the doctor ordered here.  Let's start with Smart Energy....    Smart Energy's New 'Front Man' Smart Energy Solutions (OTCBB: SMGY) newest Philippine 'front man' is Renaissance Pacific Energy Solutions, or REPESA for short. REPESA isn't your typical automotive aftermarket supplier. In fact, they're not an aftermarket supplier at all...they're really more of an energy-efficiency product wholesaler, with a penchant for environmentally-friendly technology. The Battery Brain (tm) is still a good fit within their product mix though. Personally, I like the idea of a slightly different feel to the way it's positioned as a 'you need this' product.  The distributorship deal with Renaissance Pacific - as you'll read in the press release below - will focus on getting the Battery Brain marketed in the Philippines. It's no small market though...the automotive aftermarket there is worth about $2.5 billion each year. Capturing a mere 0.1% of those dollars could mean sales of $2.5 million for Smart Energy's Battery Brain. What got my attention is something you won't find in the press release.  REPESA not only has relationship and alliances in the Philippines, but also in other Asian regions, North America, Europe, South and Central America, plus Europe (which I guess pretty much covers the whole globe). Though the deal being highlighted today is only for the Philippines, I have to wonder if Smart Energy has a good shot at tapping into Renaissance Pacific's wider network sometime down the road.  Earlier this week Smart Energy also released their quarterly numbers. Operationally they were pretty close to the prior quarter's numbers, though the company expects the top line to improve in the current quarter. For the full details and my take on Smart Energy's fiscal past, present, and future, click here for the blog entry.  As for the stock, not a lot has changed since the last time we looked, though the pace of the September/October pullback seems to have slowed a bit. In terms of trading levels, we're basically where we were at the end of October. The thing that impresses me is how firm the accumulation has remained firm even while the stock has fallen back. That just means the 'up' days are made on higher volume than the 'down' days...even if there are more or bigger down days. It hasn't paid off yet for the folks hanging onto their shares, but it does bode well that a relatively high number of interested parties are buying on this dip.  We remain patient.    Stockgroup Q&A Buy the rumor, sell the news? It looks like Stockgroup Information Systems (OTCBB: SWEB) a least experienced the second part of this Wall Street axiom on Thursday, even if it was a delayed reaction. The earnings news came out about 3:15 PM EST on Wednesday; the selling didn't get hairy until the next day - after the 4:00 PM EST conference call on Wednesday.  What happened? I only have two guesses as to what happened...(1) most of the market didn't get the numbers until after the closing bell rang on Wednesday, or (2) something new came out in the conference call.  I'm not going to restate the quarterly numbers, as they haven't changed since we sent them out Wednesday before the call. If investors just didn't see them until after the trading day was over, then that's just the way it is.  The other possibility is that something was said in the conference call.  Remember how I pretty much pounded the table on Wednesday for everyone to go to the call and ask their relevant questions? Though I hate to see SWEB shares fall back, if it happened because valuable information was drawn out via the Q&A, then I'm at least satisfied. If you didn't make it to the call and don't have time for the replay, you're in luck...yours truly here has the goods. Here are the questions and answers I found to be extra-insightful (paraphrased quite a bit)...  Q. What are you doing to improve gross margins? A. We've made a detailed analysis of duplicated or inefficient costs, where certain fixed costs don't generate a bigger benefit (like for Swedish market users, where the cost of data is greater than the revenue generated by Swedish investors). But, bear in mind the big hit on gross margins was largely one-time items. By Q1, gross margins are expected to be back in the mid-60% range, and then onto the low 70% range. Q. Can you comment on the decline in ad revenues, and per-user revenues falling from $6.00 to about $4.25?  A. There are two primary reasons...change in sales leadership, and the delay in launching the new Stockhouse. Advertisers were waiting for the new site to be launched before making a buy decision. The addition of Joe McWilliams should help, and another key sales employee has been added as well. So, we expect the numbers to start trending higher again.  Q. What are your thoughts on growth in user numbers, but not in page views? What metrics are in place that you can share?  A. A large part of that is attributable to summer being a slower time of year. Parts of the new Stockhouse are still in beta as well, and will be through the end of the year, which may have been a factor. Fine tuning all the beta pieces is necessary, and should ultimately enhance the numbers of users, page views, and revenues per user. That said, traffic is up 20% for the month, and engagement (stickiness) is still high.  Q. When is the Yahoo! Finance-Canada/Stockhouse feature going to launch?  A. Their site was going through a redesign, which delayed the initiative. We'll have two sections on their new site...one on the front page of the finance area, and the other is a Stockhouse-branded page on the personal finance area. That site is now in place, and traffic should have started stemming from it as of a couple of days ago. There's still some tweaking to be done there.  Q. What can you tell us about the smaller revenue stream products (like Reuters-Connect and Stockstream)?  A. We saw a 42% increase on the subscription side, mostly from Stockstream. There's not a lot of new traction from the Reuters-Connect program. We're still working on developing that area.  Q. What are advertisers saying about the new Stockhouse site?  A. Two key things from their perspective...the rating system allows quality commentary to be identified, while weeding out the lower quality comments. And, the cleaner-looking site has been well-received. Both were key to potential advertisers/customers. Overall the feedback has been positive  Q. How can you reconcile the generally-unhappy users who don't like the new site, compounded by diminished traffic, despite the larger number of users?  A. We've listened to and addressed the voiced concerns about the new site. Our goal is to make the content and community a highly-valuable resource. That's what the beta was for, and we're addressing those concerns every day. But, higher-quality content is the key to investor success. The majority of the community has provided positive feedback, realizing the new suite can help make that happen. The negative feedback seems to be the minority. Page views may be down, but traffic is actually up (they're not the same thing). You also have to factor in the site change and seasonality. Over the last month (roughly the first month of the new site), we logged about 1 million unique users...well up from the prior quarter's monthly results. Like I suggested would be the case, a lot of the buzz seemed to be centered around sales, the sales team, and advertising revenues. I think the company is getting pretty serious about pro-actively marketing themselves. I still suggest carving out some time to listen to the entire call.  As for the stock, it was the highest-volume day since June on Thursday - most of it bearish. However, I've also seen how these ridiculous volume days are also pivot points for a stock. In other words, this may have cleared the decks for a renewed growth period (sort of a mini-capitulation). The other thing I noticed about Thursday was a fairly good-sized recovery effort late in the day. It didn't get back to Wednesday's closing level, but it was well off the low. This suggests the bulls took the reigns from the bears around mid-day. I believe we need to see some confirmation of a reversal - in the form of another move higher - before getting too excited. But, this big devaluation has certainly caught the interest of the bargain shopper in me. It'll be interesting to see where this goes today and next week. It may well be a chance to enter or re-enter. More on that later. In any case, here's the Smart Energy news...    Smart Energy Solutions Signs Distributor Agreement with Renaissance Pacific Energy Solutions (REPESA) Philippines Distributor  POMPTON PLAINS, N.J., Nov. 16 /PRNewswire-FirstCall/ -- Smart Energy Solutions, Inc. (OTCBB: SMGY), developer and manufacturer of the innovative Battery Brain(TM) product line of vehicle and marine devices, announced today that it has signed an exclusive distributor agreement with, and already received a second order from, Renaissance Pacific Energy Solutions (REPESA), an authorized Distributor in the Philippines. Renaissance Pacific Energy Solutions delivers various quality solutions technologies and products that will establish a close synergy between environmental development and energy efficiency.  "Battery Brain(TM) is one of the most innovative products of this decade, proven to optimize the life of batteries, and significantly improve work productivity by empowering people and businesses to gain better control over their travel time, and to enhance vehicle safety and security," stated Lilibeth Mediavillo, President of Renaissance Pacific Corporation. "It is truly a cutting edge solutions technology that will underscore the marked difference between mere integrated product innovation born out of a pre- engineered systematization of some existing technologies, and real product development, one that evolved from a synthesis of scientific ingenuity, critical analyses, technological integration, and practical pre-engineered design, in accordance with consumer needs, market place demands, and the industry challenges of the rapidly growing U.S. domestic and international transportation sectors." "The Philippines is a growing market. In 2006, the Automotive Aftermarket and Service market was $2.5 billion and 99,541 motor vehicles were sold," stated Pete Mateja, CEO of Smart Energy Solutions. "We are pleased to have Renaissance Pacific Energy Solutions, an established and recognized Philippine distributor, as our exclusive partner. The fact that they've already given us two orders to start is a great beginning."  Battery Brain(TM) is Smart Energy's flagship device that constantly monitors electrical discharge of the battery for nearly all kinds of vehicles including autos, SUVs/trucks, medium and heavy duty trucks, military, buses, RV's, boats, commercial vehicles and personal watercraft. Should Battery Brain(TM) detect that the battery is losing the required charge needed to start the vehicle's engine, the device automatically disconnects the battery to preserve its starting power. In addition, Battery Brain(TM) offers a built- in anti-theft feature and will extend the life of the battery.  About Renaissance Pacific  Since its incorporation in 2003 in the State of Texas, Renaissance Pacific has evolved into two sectors - the Energy Efficiency Division which covers various solutions products on the KVAR Power Factor Optimizationfor AC inductive motors, the IceCOLD Catalyst for air conditioners/heat pumps, the Structural Insulated Panels (SIPs) for the creation of a thermal envelope framing for energy super-efficient constructions, the incorporation of various Solar Energy Applications, and the Battery Brain for more efficient battery systems; and the Bio-Engineering Division which includes various coconut fiber bio-engineering technologies under the umbrella of the Cocochoice Solutions for environmental remediation and infrastructural projects, and the Everseal Pre-Applied Thread Sealant to eliminate the unnecessary leakage of gasses and emissions that harm the environment.  About Smart Energy Solutions  Smart Energy Solutions, Inc. (OTCBB: SMGY) is the developer, manufacturer and marketer of the Battery Brain line of vehicle accessory products for nearly all kinds of vehicles including autos, SUVs/trucks, medium and heavy duty trucks, military, buses, RV's, boats, commercial vehicles and personal watercraft. These products resolve the threat of a dead battery, extend the life of the battery, and offer a built-in anti-theft feature. The Company is headquartered in Pompton Plains, NJ, with operations in, Zhuhai, China, Petach Tikva, Israel and Pompton Plains, NJ. Visit http://www.smgy.net. Forward-Looking Statements:  Actual results could differ materially from any forward-looking statements contained in any Smart Energy Solutions press release. All statements made in this press release are made as of the date of the release and could change due to unknown risks and uncertainties.  Source: Smart Energy Solutions, Inc.    We Value Your Feedback   Got comments, questions or suggestions? 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