Small Cap Network Blog

I never thought I’d be saying this about a small cap stock pick we dropped months ago, but Execute Sports (EXCS) has my attention again. Something has clearly changed investor’s minds for the better the last few days….though I still have my doubts (a lot of them, actually).

Had it not been for the chart, I probably wouldn’t have even thought about it. But, EXCS’s high-volume gain from the 14th has stabilized around that day’s closing level. We haven’t seen this stock hold on to any gains in a long time, so the fact that we’re doing it now has piqued my interest.

The nice part about this particular move is how it’s being backed by good news. The surge from the 14th was prompted by the announcement that 114 Sugar Sands jet boats had been sold. On the 18th we learned the company would be getting some nice exposure in ‘Wakeboarding’ magazine. On the 19th they got an order for ten boats from a new Russian dealer….perhaps planting a seed in a budding location.

The burning question is obvious - is this evidence the company can finally get something going? They’ve tried aqua-sports, snowboards, motorcycle apparal, and others. Nothing seemed to work for them. Are boats (of all things) going to do the trick?

As it stands right now, my vote is no. I’ve been wrong before, but so has Execute Sports. Here’s why I’m hesitant to dig in too deep….

If you’re having deja vu all over again, it might be because you remember the name Sugar Sands when it was a property of another of our ill-fated small cap companies….Challenger Powerboats (CPBI). Challenger acquired Sugar Sands and Gekko brands in early 2007. They then proceeded to shrink the top lines of all three brands. A few months later they got rid of the Sugar Sands line by selling to you know who…Execute Sports.

Here’s my issue - if Sugar Sands was a winner, why did Challenger get rid of it? Challenger’s expertise was boats, while Execute’s expertise was extreme sport equipment and apparel. If anybody could take Sugar Sands to the next level, it was Challenger. The deal should have buried EXCS…and still may.

Like I said above, I’ve been wrong before. That’s why I wanted to bring it to your attention - EXCS may be worth a look. I think it would be a short-term look at best, but who knows? Maybe Execute can actually start increasing the pro-forma top line.

On that note, do be aware of their Q-O-Q comparisons. Execute has been touting some big revenue increases, but considering they bought a revenue-bearing property, they should be making what appears to be top line progress. Just be sure to look closely at the quarterly numbers to make a fair comparison.

Bottom line - I’m not convinced of EXCS’s potential yet, despite the recent pop. I want to see a few quarters of real improvement before I jump in again; this company has had too many problems in the past to ignore now. Anything’s possible though. Maybe Execute will finally deliver, but it’s still too soon to say with any confidence. That’s my only point for now.

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The blog’s ‘Comments’ sections have been busy lately….seems like some of you really have some insightful thoughts about On The Go’s (OTCBB: ONGO) bizarre market cap numbers, and how the stock can continue to deteriorate. Other readers have turned their focus on Execute Sports (OTCBB: EXCS), thinking the company may have finally gotten itself on track after divesting the snowboard division, and inking the deal with Kawasaki.

To jump into the mix for On The Go, click here and look for the ”Got a question or comment?” link at the bottom of each blog entry. (The number in parenthesis is the number of comments submitted about that blog entry so far.)

If you want to read or post additional comments regarding Execute Sports, click here. Same drill…then click on the ‘Comments’ link.

Don’t be shy though! If you’ve got something to say or ask about any of our companies, just post a message on the appropriate blog page. It’s ridiculously easy, and yes, we review and respond to each post you make - as long as it’s legitimate.

We try to respond to all reader inquiries, whether by e-mail or the blog (as posted via the ‘comments’ section). But, when we get one we think everyone could benefit from, we like to share it with all our readers. Hence, today’s blog entry regarding Execute Sports (OTCBB: EXCS). This is a recent reader’s unedited e-mail……….

I understand that the SmallCapNetwork has officially ended it’s coverage of Execute Sports, but I was curious to know if you would still honor a question about it’s recent movement or lack thereof considering all of the positive news.

I jumped on EXCS at around .04 so at this point in time I’m still positioned to make a profit if I sold this very moment (@ roughly .06). The very unusual thing though that I’ve noticed is that we can’t seem to break the .06 - .07 range even though the company continues to dish out positive press releases. You previously mentioned that EXCS has had a very difficult time generating attention and thus the lack of momentum; do you still believe that the lack of attention is the primary reason for this stale side-ways trend?

There are rumors on various boards that there are some trust issues with regards to all of the PR’s, that these may in fact be false statistics/metrics and therefore people are hesitant to purchase shares. All in all I strongly believe that this company is extremely undervalued and that the new leadership team is focusing on all the right plays in order to increase shareholder value. Is it somewhat safe to say that all this company needs is time and a few quarters of growth under its belt before it begins to generate the hype it deserves?

Thoughts?

Thanks for the question. We’re glad to address any concern regarding previously profiled companies.

In a nutshell, yeah, we still attribute a lot of this stock’s problem to a general lack of interest. Though not without problems, as you said, much of the recent news has been really good. Though still very speculative, the company has proven to us they can sell the heck out of watersports equipment, even if they can’t sell snowboards.

You’re the second person to ask about the possibly-falsified info in the recent press releases. Anything is possible, but we don’t necessarily think it’s delilberately misleading. Press releases are created to put a company in a positive light….and they’re written by the company. So, that’s why it all seems so powerful. However, you have to take it with a grain of salt.

I’m assuming the metrics you’re referring to are the ridiculously huge increases in watersports equipment sales. Quadruple digit gains? Yep. What’s a little less emphasized, however, is the fact that they were selling practically nothing (relatively) in the watersports arena a year ago. So, any improvement is going to look enormous….on a percentage basis. It’s still a tiny sliver of the overall pie. Or at least it was…..they sold the snowboard division back to its original owners a few weeks ago, and are now focused solely on watersports.

So, we don’t doubt the news - you just have to know how to read it.

By the way, these bulletin board stocks are still under SEC scrutiny, so we have to think the folks running the show are smart enough to know that anything deliberately or materially misleading could result in huge penalties, and even jail-time. So again, we don’t think it’s pure fiction.

As far as the stock goes, anything is possible. Maybe a few quarters could indeed solve the problem, but even then, there’s no assurance the stock will follow the corporate performance - especially when the market knows so little about them (still).

As far as the future goes, we’ve been unimpressed so far, so we’re a little jaded about the opportunity going forward. Your entry at 4 cents is a heck of a lot better than the 50+ cents some folks own it at from last March. Then again, only risking 4 cents makes it much easier to be bold. If you believe in the opportunity, then you’re in at a good level. For us, we think some serious mending would need to be done before we got back on the boat - we were touting it when it was around 50 cents.

Though we’ve only been following the story from an arm’s length, the recent news of the sale of a division is big enough to merit a mention here. Execute Sports (OTCBB: EXCS) announced on Monday they’ve sold the Academy Snowboard business back to its original owners. It was only acquired in early 2006, but having never been able to make it fruitful, Execute has decided to focus on the piece of the pie that is doing exceedingly well - its watersports business.

We think it’s a good idea all around, and is probably going to benefit shareholders in the long run. The deal significantly reduced debt, and simultaneously streamlined Execute’s product line to one that’s very clearly growing like crazy.

For the full press release, click here.

Although we have to continually clean out older stock ideas to make room for new ones, for the ones we found compelling, we may still follow the story - and the chart. Over the last few days, we’ve seen not one, but two of our 2006 trading ideas really come to life. Hopefully you stuck with them, even if we couldn’t.

First up, Novelos Therapeutics (OTCBB: NVLT). After a year-long downtrend, the volatility that was stirred up in Q4 of last year was enough to at least break the stock out of the rut. Since then - and for the first time in more than a year - we’ve started to see the stock make higher highs and higher lows. Still volatile? You bet….maybe even more so. But, it’s an impressive recovery all the same….made even more impressive by the fact that it wasn’t news driven. There was a bullish opinion issued by a reputable research firm around the time of the upside reversal, although we doubt that was the key reason. In any case, the chart’s looking a lot better.

Specifically, shares are back above the 200 day moving average line, for the first time since late 2005. We think that’s a pretty straight-forward indication that the momentum has shifted for the better. From here, I’d say don’t expect any less volatility. It’s possible a support line (dashed) has been established in the short run. That may be a better entry spot - if it dips - for anybody still interested in the opportunity. 

The other blast from the past is Execute Sports (OTCBB: EXCS), We blogged a couple of the recent news items, but we think it’s well worth being a little more explicit….it looks to us like the stock may finally be coming to life. Shares made a huge upside breakout a few days ago, and have followed through reasonably well. Apparently sales are just sky-rocketing.

You might recall we were big fans of the company and the success they were creating, but being as small as they were ($2 million in annual sales), the idea never seemed to get traction within the investment community. Looks like that changed in the last couple of weeks….somebody’s obviously buying the stock now. We think it may be worth a look if you have a little speculative itch you need scratched.

We knew things were firming up for Execute Sports (OTCBB: EXCS)…their Q3 sales surged from $96,000 a year earlier more than $500,000, and last October, they reported (mid-fourth-quarter) that water sports equipment sales were ahead of the same quarter a year earlier by 800%.

Frankly though, today’s announcement is just stunning…..the grand total ended up being a 1125% increase in Q4 water sports gear sales. No details on the dollar amount - at least not yet. But, we estimate that since Celeste Berouty (formerly the Director of Sales for Body Glove’s Wetsuit Division) has joined the Execute team, water sports sales have roughly been half of Execute’s total sales.

Is this a big deal? Well, we think so. Before Celeste got on board, water sports sales (again, just an educated guess) accounted for a tenth or less of Execute’s total revenues.

We’ll try and get the specific breakdown for you. In the meantime, two things to keep in mind…..

First, regardless of the exact sales-by-division figures, we’re very certain the improvement in water sports revenue will make a big impact once full Q4 results are released.

Second, those Q4 results could be coming out any day now. 

And here’s the incredible part…..you may recall a few days ago Execute announced they’d be making a line of PWC (personal water craft) accessories for Kawasaki. Well, neither today’s announcement nor the upcoming Q4 results will reflect that deal’s revenues. So, Q1’s figures could see a jump of the same magnitude.

As we mentioned a few times recently, this company and its stock may finally be getting some real traction. If you’re interested in a high-potential speculative play, we’d say this is one well worth thinking about. 

Here’s the full press release.

Wow! A little news goes a long way, at least when you’re a micro-cap outfit that just landed a big deal with a major name in the watercraft world.

This morning, Execute Sports (OTCBB: EXCS) announced they had reached an agreement with Kawasaki Motors Corporation to design and manufacture a line of JetSki products. The Lycra rash guards, Neoprene boots, and Metalite top will be delivered in March. You’ll see them on shelves shortly after that.

And Execute’s shares? Through the roof, up to a hair over 6 cents from yesterday’s close around 3 cents. The stock was at a mere 2 cents just four days ago, so needless to say, those patient investors who kept the longer-term potential in mind were at least partially vindicated today.

There’s still a long way to go before getting back up to the all-time high of 55 cents, reached in March of 2006 (this stock only went pubic last February). However, today’s volume is by far the biggest volume day ever. Perhaps this company has finally gotten the attention of the market. We certainly think it deserves to.

You may recall we had a very positive opinion of the company, but being so new and unknown, the story could get very little traction within the investment community. As such, we finally had to drop our official coverage in search of better-responding ideas. Perhaps being linked to a name like Kawasaki finally put Execute on the map.

We’d say it’s worth a little time to browse back through all of our blog entries and newsletters regarding Execute Sports (click here). We kept pretty close tabs on things, and we suspect today’s interest is reflective of some of the things we discussed as much as it is the Kawasaki news. (Here’s the press release.)

Just wanted you to be aware, as many of you may still own it, or still be interested in it.

We’ve been discussing the notion for a while now, but Execute Sports (OTCBB: EXCS) verified the idea during their Q3 with a noteworthy improvement in cash flow.

On a quarter-over-quarter basis, revenues increased from $96,000 to $531,000. Over the last nine months, the company has pulled in $1.6 million in sales, which is a significant improvement over the $1.3 million in sales they had logged by this point last year.

Expenses were up though (primarily advertising and selling expenses), so the loss increased from $340,000 to $1.0 million. On a nine-month basis, the $2.9 million in losses so far is just a hair above last year’s $2.8 million loss they had at the end of their ninth fiscal month.

Our view is a mixed one. We think it’s fantastic to be able to increase the top line - a feat that Execute seems to now be adept at, as we’ve illustrated in our blog entries. On the flipside, we feel the bigger loss despite the improved revenue leaves a ‘doing less with more’ aftertaste. However, it doesn’t necessarily change our recognition that this is a turn-around story; we don’t feel these numbers are entirely out of line for a company that’s been where they’ve been, yet appears to be going where they’re going.

For the full earnings details, click here. To review the entire company overhaul story, click here.

Earlier this week when we highlighted Execute Sports (OTCBB: EXCS) gigantic increase in their quarter-to-date sales of water sports gear, we - along with our readers - were impressed by a hefty 800% improvement. What was missing, however, was an actual dollar amount. What did an 800% increase actually mean in terms of the company’s bottom line?

While the original press release didn’t go into the details, we still think it’s a fair question. Here’s what we’ve managed to learn in the meantime about the increase (and keep in mind these are completely unofficial numbers)…

As of that time in the same quarter last year, Execute had sold about $14,000 worth of ’rubber’ - the slang term for body suits and related items. As of the same time in Q4 of this year, the company had booked about $140,000 in water sports sales.

A couple of key notes about the data… 

First, the math doesn’t exactly work out. The actual dollar increase cited above is actually a 1000%, versus the company’s stated 800% increase. Not a big deal - maybe the timeframes in question weren’t exactly synchronized. Maybe the difference had something to do with when the sale is booked and when the check is cashed. It doesn’t matter. Either sales increase is impressive, so we’re not concerned about a little disparity between our unofficial calculation and the company’s official announcement.

Second, keep in mind that the increase was in reference to just one division, and wasn’t even based on a full quarter. Just for perspective, Execute racked up $507,000 in sales during Q2 of this year, and did about $2 million in sales last year. So, an increase of that magnitude should make a significant impact when they finally report Q4 figures next year.

In any case, there’s the answer, and we still think it’s an impressive one.

Press Release:

Celeste Berouty Joins Execute Sports, Inc.

SAN DIEGO, Oct. 3, 2006 — Execute Sports, Inc. (OTCBB:EXCS) announced today that it has hired Celeste Berouty as the Vice President of Sales. Ms. Berouty formerly served as Director of Sales, Wetsuit Division at Body Glove Wetsuit Co.

Todd Hahn, CEO of Execute Sports, commented that, “We are extremely excited to have someone of Celeste’s caliber joining our team here and continue to be impressed by everything that she brings to the company, from her deep industry experience and proven success over the past 18 years with Body Glove, to her commitment to building a successful program here at Execute Sports. We are committed to upgrading the Execute brand in the water sports industry both in terms of our product offerings and also in terms of the marketing of the Execute vests, rash guards, wetsuits and wake skates to the consumer. Celeste will be instrumental in helping us achieve these goals.'’

Celeste Berouty, Execute’s new VP of Sales added that, “I am impressed with the Execute organization and look forward to the opportunity to help take them to the next level.'’ Ms. Berouty will be responsible for developing the Execute brand of vests, rash guards and wetsuits, wake skates and the Kampus footwear line for both the mass retail and the specialty markets.

About Execute Sports, Inc.
Based in San Clemente, California, Execute Sports, Inc. develops performance products including wetsuits, vests, rash guards, snowboards, wake skates, bindings, bags and apparel for the action sports industry. The Company’s brands include Execute Wetsuits, Academy Snowboards, Kampus Wakeskates and Kampus Shoes, Execute Moto Graphics, Collective Development Bindings and Collective Development Bags. In addition, Execute has an exclusive worldwide license to design, produce and distribute EagleRider apparel through EagleRider’s 35 franchises and through the Company’s eCommerce site, http://www.eagleridergear.com. For more information, go to http://www.executesports.com and http://www.academysnowboards.com.

Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include expectations regarding the ability of the company to continue its growth and the financial performance thereafter. These statements involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this release. These risks include the ability to accomplish goals and strategies, anticipated revenue enhancements, general economic conditions and the level of consumer spending, and numerous other factors identified in the Company’s Form 10-K and other filings with the Securities Exchange Commission.

Contact:
         Execute Sports
         Todd M. Pitcher
         (858) 518-1387
         Todd.pitcher@executesports.com

Yesterday, Execute Sports (OTCBB: EXCS) announced they would be hosting a conference call in the middle of the quarter, on September 28th…well before they had any official results to discuss. What’s the hurry? Good question - we don’t know either. However, we are taking Todd Pitcher’s statement at face value…

We…understand that, as an early-stage player in the marketplace it is important to provide our investors with visibility and a reasonable level of access to the management so that they can better understand our business, the implications for our business in light of various announcements both financial and otherwise that we have made throughout the quarter and year, and also our business plan.

The concept isn’t new to us…CEL-SCI (AMEX: CVM) utilized the idea just yesterday. For the same reasons it was good for CEL-SCI, we think it’s a good move for Execute. If the company wants to gain favor and legitimacy with investors, they’re going to have to be transparent as they work through these early stages of their growth. Plus, it’s sends a message they’ve got nothing to hide.

To listen in on the call (and we encourage you to do so), the toll-free call in number is 1-800-819-9193 and for international, it is 1-913-981-4911. The teleconference call is scheduled for one hour, starting at 1:30 p.m. PT (4:30 p.m. EST).

Don’t forget, SmallCap Digest offers free stock ideas and market commentary through our e-newsletter. Be sure to sign up today using the link in the top left corner…and don’t forget to respond to the confirmation e-mail.

With all of the market’s hot-and-cold activity recently, we haven’t had much of a chance to review Execute Sports (OTCBB: EXCS). However, some big company news today merits a quick refocus on what’s going on over in San Clemente, California. Execute, on behalf of their Academy Snowboard brand, just signed a multi-year marketing agreement with European sports gear outfit UDT. And we have to say, it’s a pretty good deal for our favorite snowboard manufacturer.

The basics are simple - UDT has exclusive distribution rights, but must meet minimum sales quotas in each year from 2007 to 2011. If they achieve the minimum sales required, they will have sold more than 80,000 snowboards by the end of the agreement’s timeframe.

To see the whole press release, click here.

As usual, we’re far more interested in numbers, like the potential bottom line. Although nowhere in the press release does it talk about revenues (potential or otherwise), we still felt compelled to pull out our calculator and do some very rough math with those 80,000 or so snowboards. Here’s what we came up with…

Priced at an average of $400 (which is on the lower end of the spectrum), selling all of those snowboards would translate into approximately $32,000,000 in total business. Of course, UDT gets a healthy piece of the action, and obviously it’s not free for Execute to make snowboards. But, just assuming a mark-up of a standard 50% (i.e. if it retails at $400, Execute sells it to the dealer/distributor for about $200), it’s still a respectable chunk of change for Academy/Execute. Just for some perspective, in 2005, Execute’s total revenue for all of its divisions was $1.39 million. Even if our ad hoc calculations are way off the mark, it’s still going to be a huge win for the company.

The news wasn’t quite enough to get the stock going today, although in our opinion, it should have been. However, we also have the advantage of seeing each of the distribution deals and key personnel acquisitions Execute has come up with in recent weeks, which the market can tend to forget. Each of them is logged in our blog, which you can review here. As you’ll see, there’s actually a fairly lengthy string of small victories for the company…the combined effect of which may still be unrealized by the investing community.

With shares stuck just above 12 cents for over a month now, we can see the sellers are pretty much done. But so far, there hasn’t been an effective upside catalyst. But, stocks and stories like these - mostly off the radar - can start to move without warning…it just takes a nudge However, the nudge can leave you behind pretty quickly if you aren’t already in a position. In any case, EXCS is obviously a risk, but what isn’t? After taking a look at all these deals the company has been setting up, if you’re like us, you’re thinking Execute is still an outstanding, undiscovered opportunity, with a risk-commensurate reward.

Over the course of the last several weeks, we’ve touched on several of Execute Sports’ (OTCBB: EXCS) initiatives designed to get top line growth going, so the bottom line earnings line would get out of the red. Today, the quarterly results release tells the story…Execute made some huge progress. The company’s 2nd quarter loss narrowed from $2.5 million in 2005 to only $1.0 million in 2006. On a per share basis, an 18 cent loss from a year ago is now only about a 5 cent loss. The six-month results are about as equally dramatic.

While the sales and marketing enhancements are a key part of the turnaround plan, Execute did just as well (maybe better) at cutting out the expenses from the middle portion of the income statement. The trend bodes well for the company, and for shareholders. As aggressively as the company is promoting itself, opening new lines of business, and fostering new distribution networks, we don’t think it’s going to be long until the scales are tipped towards profitability. Of course, to reap the full benefit of that, you’ll want to own shares before then.

To get the whole scoop, click here.

Execute Sports (OTCBB: EXCS) announced today the addition of Craig Warner to its vest and wetsuit team, as well as the Kampus Footwear team. Warner, a tough personal watercraft competitor, is on the leaderboard of the American Power Boat Association season standings. More than that, he’s within striking distance of the title, with only one race to go before the world championships.

Associating with a winner is important for any company, if only for sheer publicity reasons. But, bringing Craig Warner into the fold actually opens up a few new doors for Execute. Prior to signing Craig, most of the company’s publicity focus was within the world of wakeskating and wakeboards; there was no personal watercraft icon for Execute to tout. Now, there is. While it may still be a niche market, brand loyalty and name-association are powerful forces in the action sports arena. In other words, this is a big deal.

Although it’s not the only reason, this is yet one more reason to purchase EXCS shares. The current price of 13 cents is a bargain, and we’re seeing some support here after July’s tumble - the dip may be over. Plus, the stock is very oversold, and ripe for a bounce.

By now it’s no secret Execute Sports’ (OTCBB: EXCS) core strategy is in developing the right alliances. We recently read about the wake skate partnership with Jet Pilot, the exclusive deal with Eagle Rider (a motorcycle gear retailer), and the agreement with Rincon Distribution (a supplier to over 500 retail stores). Aside from being high-profile ventures, they also just make good sense. True to form, Execute has cracked yet another nut…this one with a slight twist.

Officially named ‘The Council’, this division of Execute sports will provide marketing, research, and business development services for other action sports manufacturers and distributors. In other words, they’re going to tap into their own expertise (and they are experts) to help other companies mirror Execute’s success. The Council intends to provide the industry with a “fresh approach to marketing through providing customers with the ability to design and produce their own branded products, in addition to connecting brands with athletes and the creation of high-impact print and multimedia campaigns”. Per Todd Pitcher, President of Execute Sports, the venture is described as “providing customers with a broad range of services, ranging from web and interactive media to creating branded and private label solutions around products that we have also developed and built for them, to consulting services.'’

Our take, to put it in gen-X and gen-Y terms, is ‘cool’. It’s a new revenue source, but not one that poses a lot of risk. Execute’s top staff is already doing (heck, living) this stuff anyway, so there’s minimal cost to the company. And, perhaps along the way (and this is what we think the ultimate benefit will be), Execute will be able to develop even more alliances. There are no public forecasts or potential bottom line impacts “The Council” may have on Execute Sports’ balance sheet. However, it’s a low-risk/high-potential effort that should be exciting to see developed.

As for the stock, it’s been quietly cranking out gains over the last few days, perhaps gearing up for a bigger move soon (the calm before the storm?). That’s why we’d recommend getting in now…26 cents is a great price, especially when shares are making higher lows, and keep pressing upward. If/when the resistance at 26 cents breaks, the flood gates could open and send shares up like a rocket. 

Although ‘firing on all cylinders’ is a little cliché, it‘s still a fitting description of Execute Sports’ (OTCBB: EXCS) last few months. The company really is firing on all of its proverbial cylinders. For instance, last Friday, we learned how June’s online sales of wetsuits and vests were three times as strong as March’s revenues (when the online sales venue was launched). That was announced just a few days after a partnership was forged with Jet Pilot to begin production of a new wake skate line. Before that, Execute saw a 51% (year-over-year) increase in European sales of Academy snowboards. And even before that, we saw comparable increases of domestic snowboard sales. See the trend?

So, it’s no surprise today to learn Execute’s private-label XPS flotation vest sales through Bass Pro (a leading water-related retailer) are up in a major way. On a year-over-year basis, they’re up by 63%. Same-store sales of XPS vests are up 45%. Either way you slice it, it’s a huge increase in market share, and should ultimately be a huge win for the company was well as shareholders.

Although shares haven’t been well-loved by the market recently, you have to weigh the current momentum against the perpetual improvements in the company’s top lines…something’s got to give soon. We still suspect investors are going to be impressed by real results, and end up pushing this stock higher with a solid buying effort. In fact, we may already be seeing early hints of such an effort. Although it hasn’t necessarily moved higher recently, a clear support base has been established at 23 cents. That just may be the springboard the stock needs, now that it’s been in a consolidation mode since late June.

Execute Sports (OTCBB: EXCS) announced today a major surge in online sales of wetsuits, vests, and rashguards.

Since launching the program in March through big-name retailers (the likes of Dicks Sporting Goods, The Sports Authority,Fog Dog, etc.) Execute is capturing a lot of market share in a short amount of time. However, that’s nothing new - Execute has been red hot for months, expanding its market share footprint in all of its markets.

Our take is the same as it has been - you want to own stocks of companies that can and will go out and make it happen. Execute is one of those companies, with shares attractively priced right now at 25 cents, Plus, a close look at the chart shows a base is being formed - perhaps an omen of bullish things to come?

The Execute Sports (OTCBB: EXCS) Board of Directors announced today that Todd Hahn has been hired as the company’s CEO. From our perspective, he certainly has the leadership skills as well as the industry knowledge needed to keep pushing the sports equipment maker to the top of its game (pun intended).

Hahn had previously been with action sports agency Familie, although he actually got his start as a sports agent when he co-founded Action Sports Management - another action sports agency. Mr. Hahn has represented several of the top snowboard, skateboard and BMX athletes in the industry, so he’s clearly not in unfamiliar territory at Execute’s helm.

Prior to that, he served as Marketing Director and Retail Manager for Big Deal.com, and also as a national sales rep for World Industries. So again, he’s not unfamiliar with the process of getting products into distribution channels, and ultimately getting them into consumer’s hands.

In a recent edition of the SmallCap Digest, we compared news from small companies to a lightning strike - it can happen anytime, anywhere…without warning. But when it does, it’s a big deal. Well, lightning struck yesterday when Execute Sports (OTCBB: EXCS) announced a 181% increase in European orders for snowboards in 2006/2007. That raises overseas sales by 51% on a year-over-year basis. For lack of a better way of saying it, that’s not too shabby, especially considering European snowboard market is estimated to total about $100 million on an annual basis.

Just for some perspective, Execute’s 2005 revenue totaled about $1.4 million, which included domestic (U.S.) sales. Needless to say, even just capturing a small piece of the European snowboard market share would still be a big boost for the company’s top and bottom lines. Based on the way Execute is fostering the foreign market, they’re on track to take a big piece of that pie.

By the way, Execute’s snowboards are marketed under the ‘Academy’ brand name.

As for the stock, it hasn’t necessarily been easy to own lately.  The question is just one of when all this good news will start to get some traction with the investing community. It’s a great corporate story…Execute’s products are top-notch, and they’re getting their stuff to the consumer through some powerful distribution channels. Yet, this recent IPO has had a tough time getting attention. We still like the company and the stock, and if you do too, the recent share price of 24 cents makes for a great entry point - especially as oversold as it is right now. Just keep in mind how young stocks like these can take some time for other investors to find. But when they do, they have the potential to grow exponentially. 

On a side note, we are relieved that the recent pullback has not been made on heavy volume. If anything, it’s been a light-volume selloff, which is a subtle hint the masses aren’t absolutely terrified to own this stock. We attribute a lot of the recent weakness to general market malaise.

If you’re new to this site, or unfamiliar with the company, it might be worth taking a look at our initial profile on Execute Sports by clicking here. You’ll be able to see the reward potential is still pretty high, despite the risk.

In our last update on Execute Sports (OTCBB: EXCS), our take could have been considered luke-warm. The then-current price of 32 cents was 3 pennies under our suggested stop level of 35 cents (and remember, use mental stops whenever possible). Plus, there was nothing in particular the company saw on the horizon that was going to jump-start a wave of buying. Of course, we didn’t see any bullish catalysts either, so we acknowledged that it was getting tougher and tougher to stick with the stock.

Since then, though nothing has changed about the company since the last blog entry, the share price has at least managed to work its way back above that 35 cent level. In fact, we saw a high of 38 cents today, with the per-share price spending most of the day in the upper side of its range. Yes, it’s only a nickel from that low point we were lamenting, but in terms of percentages, we’re fairly pleased with a 15% recovery move.

We’re not going to imply that it’s grins and giggles from here on out; there’s still a lot more work that the company - and the stock - has to do to really satisfy us. We just wanted to be fair to everyone in how we report and analyze. The bottom line is that things look a little better for shareholders than they did a few days ago. That’s all.

Looking forward for the stock, there’s still going to be resistance around 39 cents. We’ve already seen it once in mid-May. If we can get past that level, then it really will become much easier for the bulls to justify scooping up some shares.

On a side note, one of the most compelling parts of Execute’s recent chart is not so much the progress we’re finally seeing again, but the higher volume that we’re seeing on bullish days. Likewise, we’re seeing lower volume on any bearish days. The technical terms are accumulation and distribution, but that’s just a fancy way of saying ‘there are more buyers than sellers’.