We believe we have found gold this week! Well, maybe not. We have been optimistic before, but check this out… Our pick, INSCI Corp. has reported 5 consecutive quarters of profitability, and also announced that for the fiscal 2003 second quarter ended September 30, 2002 revenues were $2.3 million with net income of $472,000 compared with a net income of $177,000 for the same period last year… an increase of 167%. Looks like INSCI Corp., a former Nasdaq listed stock that traded as high as $8 a share before the market meltdown, may very well be an undiscovered turnaround play trading at only 7 cents!!

INSCI Corp. is a leading provider of digital business solutions for high volume email storage and retrieval and long-term preservation of essential documents such as invoices, contracts, and reports. The company has strategic partnerships with Xerox and Unisys.

Not only has INSCI Corp. returned to profitability, it looks like a company with the right product hitting the market at the right time… Has anyone heard of Rule 17A-4 (SEC) and Rule 5015.2 (DOD) ? If you haven’t, you soon will. They are recently enacted regulatory laws requiring companies to store and retrieve electronic correspondence. Companies that do not comply are subject to very heavy fines. The rules require companies to keep such records for up to 6 years to resolve disputes and regulatory questions. Recently, five Wall Street brokerage firms were fined a total of $8.25 million for not preserving memos and emails, a discovery made as investigators probed whether analysts had issued bogus buy recommendations to win business from the companies they covered. The five - Citigroup Inc.'s Salomon Smith Barney, Morgan Stanley & Co., Deutsche Bank Securities Inc., U.S. Bancorp Piper Jaffray Inc., and Goldman, Sachs & Co. - agreed to pay $1.65 million each and to review and report on procedures for keeping e-mails.

All this is not just good news but great news for INSCI. The company in addition to announcing its fifth consecutive quarter of profitability also introduced several new products designed to take advantage of the growing market for compliance retention of customer correspondence and other important business content. During the year, INSCI released ESP+mailstore for the storage of electronic mail. ESP+mailstore is the fourth new product release from INSCI in the past year. The application automatically captures electronic messages and transfers them to an ESP+archive server for long-term storage. ESP+archive automatically indexes e-mail messages by key criteria such as Send Date, Send To Address, Send From Address or other important information. The system allows users the ability to instantly and intelligently retrieve stored messages. Retrieval automatically launches the appropriate desktop application tool, such as MS Outlook, and displays the email for viewing. Once retrieved, the email may be viewed and processed as normal email, exported to ESP+cd for distribution, or printed.

Company CEO Henry Nelson stated, “INSCI has been a leader in the science of highly scalable electronic document solutions for more than 15 years. Our products are specifically designed to provide long-term storage of personalized electronic documents such as bank and credit card statements, trade confirmations or invoices. Email storage is a natural extension of our industry proven technology… A significant portion of our business is from industries such as financial services and healthcare organizations which are required by regulation to store certain correspondence including email. Because of recent legal action such as that highlighted in The Wall Street Journal, ESP+mailstore is not only important for INSCI, but for our customers as well.”

Nelson added, “Some companies have initiated the storage of corporate email on tape backup systems. However, storage has limited value without intelligent retrieval of the messages when they are needed. INSCI's indexing software provides users instant access to any document stored in our repository. Stored email can remain online and available for retrieval for as long as regulations require, which in the case of SEC Rule 17A-4 is for a minimum of six years.”

We believe that this stock could be volatile. It is relatively thinly traded, and it has a float of only 40 million shares which is extremely low for an OTC BB stock. Also, there is talk of the company contemplating a reverse split to bring the share price back over a buck and getting back on the Nasdaq. And, actually, given the fact the company has retuned to profitability, that is really not a bad idea. Remember you saw it first at Stockprowler.com… Stockprowler.com did not receive compensation of any kind from the company or third parties for writing this report. Readers are urged to read the company SEC filings and do their own due diligence before investing in this or any other stock mentioned on this website.