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May 13, 2005 Stock Pick: NewMarket Technology, Inc. (NMKT)

Stock Price: $0.425

NewMarket Technology, Inc. is in the business of continuously launching emerging communication technologies in the telecommunications, homeland security, healthcare, and financial service industries. They create economies of scale across these various industries through their robust service, support, and integration organization known as NewMarket Strategic Sourcing.

We released NMKT as a stock pick a month and a half ago before their fourth quarter and annual numbers were released. Annual revenue for 2004 was $24.98 million including a small profit of $574,000. Fourth quarter earnings were $808,000 on $6.82 million in revenue. Gross profit was $4.34 million. Within 12 trading days of our stock pick, NMKT hit $0.575 for a 31% gain.

We expect first quarter earnings to be released during this coming week. Company guidance for the first quarter includes revenue of $10 million. We believe that profit will exceed $1 million for the quarter as the company continues to cut costs and take advantage of their economies of scale business model.

The company just forecasted $8-$10 million in VoIP sales this year and $50 million in annual revenue possible through three letter of intent acquisition candidates in China. A $6 million contract was just signed by Xiptel, their VoIP subsidiary run by former Qwest COO Peter Geddis.

We expect NMKT to be accepted onto the AMEX by the end of summer.

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