BreakAway Hotline

It's earnings day for Armor Holdings (AH:NYSE) and Concur Technologies (CNQR:NASDAQ). Below, I've got my take on any new developments from the conference calls as well as an update on Natural Gas Services Group (NGS:AMEX) . But first, I want to get some other things out to you…

Well, I asked and you delivered. Thanks to everyone that sent me their success stories on acquiring shares of Silex Limited (SLX:ASX ). Some of you even had success picking up the pink sheet version of Silex, (SILXY:pinksheets).

Keep in mind a pink sheet is almost the exact same thing, but each Silex pink sheet is equivalent to five shares of the Australian version of the stock. So though they may be a little bit more or less expensive, the prices are very similar.

The last trade for Silex's pink sheet was for US$26.50. That equates to US$5.30 per normal Australian share. And since the Australian dollar/U.S. dollar (AUD/USD) exchange rate is currently 1.2871-to-1, the pink sheet costs about AU$6.82 while the last trade on the Australian Exchange for Silex was $6.89.

Companies will list on the pink sheets to make international transactions easier. But the real reason is they won't be subjected to U.S. accounting and SEC regulations. This doesn't mean they're all up to Enron-like activities, it's just that it's too expensive for some of these small-cap companies to pay to keep two sets of books, fly in outside auditors and meet all the other qualifications required of them to list on exchanges like the Nasdaq and NYSE as ADRs.

Below, I've compiled a list of some examples and resources many of you used to get into this play. Here are a few of them:

C.L.: “Today I purchased shares of Silex Ltd through Fidelity Investments . The Broker told me that Bank of New York has an ADR that trades under the symbol SILXY. ”

B.B.: “I bought Silex through TD Ameritrade . The broker had had to do it for me and it was done in about 6 minutes and he gave me Internet buying rates. I was very pleased and be sure and to tell everyone to use a LIMIT ORDER. ”

D.S.: “I purchased my shares through TD Ameritrade with no problem. The symbol is silxf for the trade.”

J.M.: “I bought shares at Charles Schwab . Schwab made it very easy. Try the retail side of Schwab. ”

D.B.: “I called the `foreign' office of Fidelity . No problem buying on the Australian Exchange. They recommended a `5 times' ADR. [That's the pink sheet]

The bid price was 25 and ask price was 27. And I paid normal online commissions. If I had gone to Australia there was a $50.00 fee. ”

M.G.: I had an existing account at EverBank and Ever Brokerage . They were able to buy the stock for me and gave me a choice of buying in US or Australian dollars. The fee was a flat $50 since the stock couldn't be purchased on line. Limit orders were only good for a day, so I requested a market order. Although, the minimum purchase was $20,000 if the buy was to be in a foreign currency; otherwise there was no minimum.”

C.P. “I purchased Silex Limited through UBS Financial Services in Kansas City.”

I'm sorry, didn't have room for everyone's, but your responses were very helpful. Hopefully, that should put everyone on the same track with this play.

One of the best companies around that I just recommended in the February issue is Concur Technologies (CNQR:NASDAQ) , posted a solid earnings report this afternoon.

I think the company's CEO said it best, “We started fiscal 2007 with an exceptional quarter, as we exceeded our revenue, gross margin, operating margin and earnings targets. Even as we invested across the business to drive better than 50% top line growth, we were able to grow operating margin by 74%.”

Again, it's imperative to see continued operating margin growth. And I can live with 74%. That growth proves to me Concur is growing without mortgaging its future and Concur's management has developed the product lineup and customer base to make this pick into a true BreakAway stock.

The markets liked it too. Minutes after the conference call, Concur's stock was changing hands for a 3% premium above today's closing price at $15.56 per share in low-volume after-hours trading.

The evening went almost as well for Armor Holdings (AH:NYSE) . Armor beat Wall Street's expectations for profits by five percent, or five cents per share, and announced that it expects 46% revenue growth over the next year.

Although, sales growth will undoubtedly be strong, profits will be lagging behind next year with an expected growth rate of 41%. That equates to shrinking margins, which will weigh down a stock price over the long term.

Overall, it was a pretty boring report for Armor. But what do you expect when you have a $2.1 billion company that relies heavily on government contracts for its revenues?

Over the next couple of days, I'll be reevaluating whether this stock has the true Breakaway potential we're looking for. Until then, it's a safe investment to have that also has some upside potential.

Finally, in Tuesday's update, I didn't mention Natural Gas Services Group (NGS:AMEX) . The reason is because this is a very quiet company. It's a small company that doesn't want to fall into the trappings of many other small-cap stocks, and that's hyper-publicizing everything they do.

You aren't going to see a press release each time this company delivers a new compressor or books a new customer. When I visited this company and sat down over a mouthwatering barbecue lunch barbecue lunch, I learned the company was run by a few stand-up Texans that are genuinely interested in growing their business. They're not into pumping up its stock price, selling out, and running away. It was nothing but firm “look-you-in-the-eye” handshakes from every one of them.

But more importantly, this attitude that proved they had nothing to hide. It was a “this is what we do, how we do it, and the growth opportunities we're going after.”

As a result, you're not going to hear too much from them. Every quarter, we'll get a full update on how things are going and their success in growing the company. Until then, we'll have to be patient and let Wall Street drive down NGS' stock price when natural gas prices get volatile.

This stock is going to be a big winner, but it's going to do so very quietly. I like to think of it as the end results are the same regardless of which road is taking when investing in a top-notch company, a much higher stock price. That will be true even though the road traveled to get there will have some occasional volatility like we've seen over the past couple of weeks.

Right now, I'll be answering all of your e-mails that you sent me while tinkering with the Level 6 Trader institutional investor tracking system. In case you missed the big news, Michel Dell is coming back to his company as CEO, Dell's stock is up more than a dollar in after-hours trading, and Level 6 Traders stand to make about 50% when the market opens tomorrow.

I just wanted to get all this information out to everyone as early as possible so anyone that hasn't had a chance to buy the stock can rest easy and wake up with a nice little plan of action. You'll be hearing from me soon. And if anyone else has any questions about anything at all, just e-mail me at taipan@taipangroup.com and I'll do what I can.

Finally, at risk of thanking everyone too much because it eventually becomes simple pandering, I want to say thanks again to those of you who dropped me an e-mail. This type of response really gets me excited and leads me to think (although I'm probably pretty biased in this case) that we're up to some big things here at BreakAway Investor and that we're really sticking together.

P.S. Here's a link to the pink sheets quote for Silex Limited (SILXY:Pinksheets): http://www.pinksheets.com/quote/quote.jsp?symbol=silxy