SXCI

SXCI, a Toronto based micro-cap (market cap of $66 million) healthy care service company, just announced its Q2 results this morning and it was excellent. Revenues up 52%, EBITDA up 80%, and EPS up 20%, booking up 12%, and raised 2006 revenues, EBITDA and EPS guidance. The company is in a very defensive sector (healthy care processing and services), therefore, can be bought even in today's market environment, and a significant portion of its top line are recurring. Valuation is very cheap, trading at about 16X of its 2006 EPs when it grows at more than 50% annually. Clean balance sheet with a lot of cash. It dominates in Canadian market share and is expanding into US market. With its balance sheet, cash reserve and strong share price, it will continue to expand by both organic growth and acquisition. I believe there will be additional catalysts in near term as I believe SXCI will continue to announce signing of large contracts, particularly with large institutions. This company was only listed on NASDAQ in late July, and a lot of US investors are not aware of this name, although it is rather well-known in the investment community in Canada. I believe this will be a $20 stock by the end of this year.