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SMTR Smart Tire Systems(.18&32.5 mill shares) Companies, such as car companies, are increasingly burdened by government rules and regulations. But then, other companies can profit by finding ways to comply with these regulations. SMTR is one of these companies, and it is not only going to profit by them, it is going to PROSPERE FROM THEM. The US National Highway Traffic Safety Administration (NHTSA) is concerned that underinflated tires decrease fuel efficiency (tire efficiency is reduced 1% for every 3 psi that a tire is underinflated and tires loose 3 to 8 psi a year) and also that 23,000 crashes a year are related to tire blowouts and flat tires. They want tire pressure and temperature to be monitored and displayed for the driver to see. Therefore, they have passed a regulation that 10% of all cars and light trucks must be equiped with tire pressusre monitoring systems (TPMS) by 31 Oct '04, 35% the next year, then 65% and 100% after that. Some other companies came up with indirect ways of measuring tire pressure, but after a review NHTSA decided that they were not accurate enough. SMTR has developed wireless microelectronic chips that transmit tire pressure, temperature and acceleration directly to a monitor that can be installed on the dash board. They are THE ONLY COMPANY WITH SUCH A DEVICE. Other countries, including China, have also decided that this is a good idea. SMTR has just finalized an agreement with Beijing Boom Technology to be the master distributer of their product in China. They will have to buy $1.5 million for the after market in the first year and $3.9 million the next year if thsy want to keep being the master distributer. SMSTR has also signed an agreement with Hyundai to develope TPMS for their large trucks and busses as well as cars and light trucks. SMTR is interested in having a world wide base and now have offices in Europe as well as America. They have signed agreements with distributers in Australia, Norway and Canada. They have also signed agreements to produce their devices for motorcycle tires as well as RV's and trailers such as boat trailers. Since 100% of cars and light trucks will have to have tire pressure/temperature measuring devices in 4 years, the company should show explosive growth over that time period. Already Hummer H2 has signed an agreement to have their product listed in their upscale vehicles as part of their accessory package. Not only will it be part of the new car mandate, but it can also be added to cars already on the road, the after market. Over a year ago the stock was much higher, it has been in the teen range for quite a while, but now with these contracts, I think that its long base building period is over and that it is primed to start rising. Therefore SmarTire may be a smart buy.
Posts: 580 | Registered: Oct 2003
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