As a quick update on the blog - summary on SRRY.OB:
What they do
Sancon Resources Recovery, Inc. is an environmental service and waste management
company that operates recycling facilities in China and Australia. Sancon
specializes in the collection and recovery of industrial and commercial solid
wastes such as plastic, paper, cardboard, and glass. The recycled materials are
re-used by Sancon's manufacturing customers in China to make a wide variety of
new products including outdoor furniture, construction materials, building
materials, road surface, and various new products. Sancon's China operation is
licensed by the Chinese government for waste management services, and is
certified with ISO 9001 and ISO14001 standards. Sancon currently ships more than
25,000 tons of recycled industrial and commercial waste material annually to its
customers in China. Sancon's main operations and services include industrial
waste management consulting, collection and reprocess of recyclable materials
such as plastic, glass, cardboard, and paper sourced from suppliers such as
Hella, Toyota, Full Views, Wastech Holdings, Supagas, and Priority etc, before
its re-entry into manufacture cycles as raw materials. Sancon also provides its
full waste management services to large consumer products maker such as Pernod
Ricard. The use of recycled material is both environmentally friendly and is a
key part of today's competitive manufacturing process to lower costs. As China
gains global manufacturing dominance and oil price soars, Chinese manufacturers
are increasingly turning to recycled materials to lower its costs, resulting
tremendous demand for recycled materials import. The major customers for Sancon
are Chinese manufacturers and recycled material traders which are located mainly
in the Chinese provinces of Guangdong, Zhejiang, Fujian and Hong Kong.
Sales
Sales are generated by service charges and the sale of recyclable materials. The
sales in Q2 2008 were $2,940,268, representing a 251% increase compared to the
sales of $838,658 in same period of 2007. The sharp increases were mainly due to
the significant sales amount contributed from Sancon SH and CS, which started
their operation in Q3 2007 and Q1 2008. On August 15, 2007, the Company
completed the acquisition of 70% of the equity interest in Sancon Resources
Recovery (Shanghai) Co., Ltd by exercising its option to convert $200,000 of
convertible promissory note. On November 17, 2006, the company completed the
acquisition of 100% equity interest in Crossover Solutions Inc from Fintel Group
by paying $1 for the transfer of one share of Crossover Solutions Inc. being the
total number of outstanding share of Crossover. Crossover did not have any
operations or assets/liability prior to 2008. The both companies are engaged in
recycling material trading business. And sales for six months ended on June 30
for the year 2008 and 2007 were $5,889,264 and $1,531,706 respectively.
Financials
- O/S = 21.7 mil
- Market cap roughly 12 mil
- 6 months sales = 5.8 mil
- Margins increased from 17.9% in 2Q 2007 to 46.2% in 2Q 2008
- Gross profit increased to $2.87 million in the 2008 six months compared to $0.31 million in the year-earlier period
- 2008 net income for the first six months was $1.03 million, or $0.05 per diluted share, compared to a loss of $(0.22) million, or a loss of $(0.01) per share in the year ago period
Business Outlook
The Company expects to generate 2008 revenue of between $11 million and $12 million and net income between $2 million and $2.1 million and $0.09 to $0.1 per share
“We are pleased that we have achieved another profitable quarter, while positioning the Company for growth throughout 2008 and 2009,” said Jack Chen, Sancon’s Chief Executive Officer. “The recent announcement that we have been selected by the largest personal computer manufacturer in China to collect and process waste materials reflects the growing recognition in China of the importance of recycling. Companies are increasingly embracing these initiatives, endorsed by the Chinese government, to become more environmentally responsible. We have been positioning Sancon to benefit from these trends by investing in technology and recycling plants and depots to support growth in new Chinese cities.”
Links
http://biz.yahoo.com/bw/080818/20080818005365.html?.v=1
http://www.sec.gov/Archives/edgar/data/1288195/000101968708003728/sancon_10q-063008.txt
Tuesday, August 26, 2008
Monday, August 18, 2008
Storm approaching...
Tropical Storm Fay is approaching Florida, where I'm residing, but I'm really talking about the market here... :) It's nice to have a job of a weather forecaster. I love how they are saying: "There is an over 50% chance of Fay becoming a hurricane", which could pretty much mean there is 51% chance it'll be a hurricane, and 49% chance it will stay a Tropical Storm. Let's apply this to the market - "There is an over 50% chance of DOW closing positive tomorrow" :)
We've been seeing lots of +200 / -200 DOW swings in the past few weeks, but after all dust is settled, we are still trading in the same range. So, where do we go from here? I haven't changed my mind yet. Still believe we'll see 13k by late Sept / Oct, so I see a "big storm" coming into the market in the next few weeks, but I think this storm will be a disaster for the shorts. Shanghai market went below 2500, but judging how it's selling off, it seems like a capitulation is almost here...You rarely see 60% pullback on anything that went up, but here we are talking about pretty strong economy. All statistics point to a nice recovery in the next 6-9 months.
Now, back to our undiscovered stocks, as there have been plenty of news last week:
HRBN (Harbin Electric) - earnings were great. Conference call wasn't that great. I think they should work on the conference call a little better, as some of the explanation provided wasn't understood correctly by many. Anyways, stock did not give back its gains, instead continued its slow move. It was nice to see it work through $16.00-16.25 resistance. Chart still looks great. There are other resistances on the way - $17,00, $17.72... Nothing changed in the long term of the company. They just confirmed that the long term look very bright here.
AFAM (Almost Family) - did what I expected - dropped huge on simple profit taking one day. It deservers a 50/50 weather forecaster statement right now, as it's hard to predict what will happen now. Profit was made, off to the next play. No more updates on this one.
TXIC (Tongxin International) - still nothing to see here, except it it seems that IR is starting to inform the public a little more. Telling us when the earnings were going to be released is a start. China Auto Market has slowed down a bit, but still strong, and nothing compared to US market.
YTEC (Yucheng Technologies) - nice gain from $11's to mid $14's, but the "buy rumor, sell news" took its toll. I actually didn't have a chance to go over earnings today. Will analyze later to see if it's worth getting back in any time soon.
MAQ / MAQ+ (now GSL / GSL+) - completed its merger resulting in a nice gain for the warrants from around $1 all the way to $1.60. This was somewhat risky play, as you deal with warrants, where you can lose all your investment if merger doesn't happen, but the merger was nearly 100% guaranteed. Still keep an eye on this stock and warrant, as the resulting company is very interesting.
Similar type of play is happening now in FMGQ.OB / FMGQW.OB - another interesting merger, which most likely will happen as well judging by today's PR ( http://biz.yahoo.com/bw/080818/20080818005595.html?.v=1 ) , resulting in a nice gain for the warrants, as the strike price is $6.00 (so, it might get to $1.50-1.60 sometime after the merger). Once again - very risky play. Only play with warrants if you are ready to lose your entire investment in them.
Another new stock:
Few weeks ago I briefly mentioned a new stock to watch - SRRY.OB.
I believe this one may appreciate nicely in upcoming months.
Take a look at this latest earnings release:
http://biz.yahoo.com/bw/080818/20080818005365.html?.v=1
This company is a rapidly growing environmental services and waste recycling company, with operations in both China and Australia. And China Operations are growing at a very nice pace. Just look at this revenue numbers: "The Company generated record 2008 second quarter revenue of $2.94 million, a 251% increase compared to $0.84 million in the 2007 second quarter". This is despite some shutdowns due to the earthquake.
Gross Margin increased significantly (from 20% to 48%). Finally:
"2008 net income for the first six months was $1.03 million, or $0.05 per diluted share, compared to a loss of $(0.22) million, or a loss of $(0.01) per share in the year ago period. The Company expects to generate 2008 revenue of between $11 million and $12 million and net income between $2 million and $2.1 million and $0.09 to $0.1 per share."
Basically, they are trading at PE of 5 right now. $1 is not out of the question here for the short term. Long term - who knows how far they can take it with this phenomenal growth. More to come on this stock.....
That's it for today. Off to watch the weather forecasts :)
We've been seeing lots of +200 / -200 DOW swings in the past few weeks, but after all dust is settled, we are still trading in the same range. So, where do we go from here? I haven't changed my mind yet. Still believe we'll see 13k by late Sept / Oct, so I see a "big storm" coming into the market in the next few weeks, but I think this storm will be a disaster for the shorts. Shanghai market went below 2500, but judging how it's selling off, it seems like a capitulation is almost here...You rarely see 60% pullback on anything that went up, but here we are talking about pretty strong economy. All statistics point to a nice recovery in the next 6-9 months.
Now, back to our undiscovered stocks, as there have been plenty of news last week:
HRBN (Harbin Electric) - earnings were great. Conference call wasn't that great. I think they should work on the conference call a little better, as some of the explanation provided wasn't understood correctly by many. Anyways, stock did not give back its gains, instead continued its slow move. It was nice to see it work through $16.00-16.25 resistance. Chart still looks great. There are other resistances on the way - $17,00, $17.72... Nothing changed in the long term of the company. They just confirmed that the long term look very bright here.
AFAM (Almost Family) - did what I expected - dropped huge on simple profit taking one day. It deservers a 50/50 weather forecaster statement right now, as it's hard to predict what will happen now. Profit was made, off to the next play. No more updates on this one.
TXIC (Tongxin International) - still nothing to see here, except it it seems that IR is starting to inform the public a little more. Telling us when the earnings were going to be released is a start. China Auto Market has slowed down a bit, but still strong, and nothing compared to US market.
YTEC (Yucheng Technologies) - nice gain from $11's to mid $14's, but the "buy rumor, sell news" took its toll. I actually didn't have a chance to go over earnings today. Will analyze later to see if it's worth getting back in any time soon.
MAQ / MAQ+ (now GSL / GSL+) - completed its merger resulting in a nice gain for the warrants from around $1 all the way to $1.60. This was somewhat risky play, as you deal with warrants, where you can lose all your investment if merger doesn't happen, but the merger was nearly 100% guaranteed. Still keep an eye on this stock and warrant, as the resulting company is very interesting.
Similar type of play is happening now in FMGQ.OB / FMGQW.OB - another interesting merger, which most likely will happen as well judging by today's PR ( http://biz.yahoo.com/bw/080818/20080818005595.html?.v=1 ) , resulting in a nice gain for the warrants, as the strike price is $6.00 (so, it might get to $1.50-1.60 sometime after the merger). Once again - very risky play. Only play with warrants if you are ready to lose your entire investment in them.
Another new stock:
Few weeks ago I briefly mentioned a new stock to watch - SRRY.OB.
I believe this one may appreciate nicely in upcoming months.
Take a look at this latest earnings release:
http://biz.yahoo.com/bw/080818/20080818005365.html?.v=1
This company is a rapidly growing environmental services and waste recycling company, with operations in both China and Australia. And China Operations are growing at a very nice pace. Just look at this revenue numbers: "The Company generated record 2008 second quarter revenue of $2.94 million, a 251% increase compared to $0.84 million in the 2007 second quarter". This is despite some shutdowns due to the earthquake.
Gross Margin increased significantly (from 20% to 48%). Finally:
"2008 net income for the first six months was $1.03 million, or $0.05 per diluted share, compared to a loss of $(0.22) million, or a loss of $(0.01) per share in the year ago period. The Company expects to generate 2008 revenue of between $11 million and $12 million and net income between $2 million and $2.1 million and $0.09 to $0.1 per share."
Basically, they are trading at PE of 5 right now. $1 is not out of the question here for the short term. Long term - who knows how far they can take it with this phenomenal growth. More to come on this stock.....
That's it for today. Off to watch the weather forecasts :)
Sunday, August 10, 2008
Earnings and more
It's earnings time this week.
Harbin Electric (HRBN) is going to have a conference call and PR on earnings early Monday morning, but they already released 10Q Friday after hours.
The numbers look great! They beat on both revenues and net income. Margins are still nicely above 48%.
Six months results:
"For the six-month period ended June 30, 2008, we generated net revenues of $46.42 million compared to $27.62 million for the six-month period ended June 30, 2007, representing a 68% year-over-year growth. Linear motors and related integrated application systems contributed 44% to total revenues, automobile specialty micro-motors contributed 38%, and controllers, armatures, and other special motors contributed 18% compared to 76%, 0%, and 24%, respectively, for the six months ended June 30, 2007. "
"Net Income for the six months ended June 30, 2008 was $11.58 million compared to $7.96 million for the six months ended June 3, 2007, representing a year-over-year increase of 46%. This increase in net income was mainly due to new sales driven primarily by automobile micro-motor business and the tower-type permanent magnetic linear motor oil pumps. Earnings per diluted share grew 36% from $0.42 in the six months ended June 30, 2008 to $0.58 in the six months ended June 30, 2007. The income tax that the Company began to pay on earnings has resulted in a significant reduction in our growth of net earnings compared to previous periods."
Three months results:
"For the three months ended June 30, 2008, we generated net revenues of $23.96 million compared to $13.99 million for the three months ended June 30, 2007, representing an increase of 71% year-over-year. Linear motors and related integrated application systems contributed 45% to total revenues, automobile specialty micro-motors contributed 38%, and controllers, armatures, and other special motors contributed 17% compared to 66%, 0%, and 34%, respectively, for the three months ended June 30, 2007. "
"Net Income for the three months ended June 30, 2008 was $6.23 million compared to $4.56 million for the three months ended June 30, 2007, representing a year-over-year increase of 37%. Earnings per diluted share were $0.31 and $0.24 for the three months ended June 30, 2008 and 2007, respectively. The income tax that the Company began to pay on earnings has resulted in a significant reduction in our growth of net earnings compared to previous periods. Higher SG&A costs for the second quarter of 2008 versus the second quarter of 2007 also negatively affected the net earnings. Additionally, the Company received $763,408 in government grants in the second quarter of 2007, while none in the second quarter of 2008, also affected the comparison of the two periods unfavorably."
Now, in the next quarters the new acquisition numbers will kick in. Fundamentals are all there for an impressive growth. Company does not appear to slow down at all.
Summary: Excellent 2Q numbers (beat all analysts forecasts) coupled with great chart setup - if that doesn't give HRBN a nice jump, I would be really suprised. Anyways, no worries here for the long term as usual.
Tongxin International (TXIC) - Look, it's not a disaster that the company's stock is down less than 6% from the time they got the merger complete. Once again, many chinese stocks are down 40%+ in the past 6 months. Disappointed about lack of upward movement? Yes. Worried yet? NO. Give it time and wait for earnings.
Almost Family (AFAM) - What a beast. Great earnings, just great. Chart is getting overextended though. If you are not out of it yet, I would suggest to take profits here. Has to settle a bit.
Here is my thinking on the market:
So far, market acts as I pretty much expected: bottomed at 10,800-11,100 area. Now, pushed over 11,600's with Nasdaq and S&P500 breaking out technically. Unless something changes materially, we should see a next resistance at 12,200-12,300 area fairly soon. Still on target for 13k by late Sept or Oct.
Chinese market is about to start heating up again. It seems to be bottoming out at 2500-2700 area. Even if it goes slightly lower, this looks like a bottom. Statistically, stocks of the country with Olympics gain on average 30% in the next 9 months after Olympics. So, start nibbling on your favorite Chinese high flyers :), but I would suggest to stick with stocks that got great fundamentals. We are about to witness a next wave in Chinese stocks buying. Get ready for it...
Harbin Electric (HRBN) is going to have a conference call and PR on earnings early Monday morning, but they already released 10Q Friday after hours.
The numbers look great! They beat on both revenues and net income. Margins are still nicely above 48%.
Six months results:
"For the six-month period ended June 30, 2008, we generated net revenues of $46.42 million compared to $27.62 million for the six-month period ended June 30, 2007, representing a 68% year-over-year growth. Linear motors and related integrated application systems contributed 44% to total revenues, automobile specialty micro-motors contributed 38%, and controllers, armatures, and other special motors contributed 18% compared to 76%, 0%, and 24%, respectively, for the six months ended June 30, 2007. "
"Net Income for the six months ended June 30, 2008 was $11.58 million compared to $7.96 million for the six months ended June 3, 2007, representing a year-over-year increase of 46%. This increase in net income was mainly due to new sales driven primarily by automobile micro-motor business and the tower-type permanent magnetic linear motor oil pumps. Earnings per diluted share grew 36% from $0.42 in the six months ended June 30, 2008 to $0.58 in the six months ended June 30, 2007. The income tax that the Company began to pay on earnings has resulted in a significant reduction in our growth of net earnings compared to previous periods."
Three months results:
"For the three months ended June 30, 2008, we generated net revenues of $23.96 million compared to $13.99 million for the three months ended June 30, 2007, representing an increase of 71% year-over-year. Linear motors and related integrated application systems contributed 45% to total revenues, automobile specialty micro-motors contributed 38%, and controllers, armatures, and other special motors contributed 17% compared to 66%, 0%, and 34%, respectively, for the three months ended June 30, 2007. "
"Net Income for the three months ended June 30, 2008 was $6.23 million compared to $4.56 million for the three months ended June 30, 2007, representing a year-over-year increase of 37%. Earnings per diluted share were $0.31 and $0.24 for the three months ended June 30, 2008 and 2007, respectively. The income tax that the Company began to pay on earnings has resulted in a significant reduction in our growth of net earnings compared to previous periods. Higher SG&A costs for the second quarter of 2008 versus the second quarter of 2007 also negatively affected the net earnings. Additionally, the Company received $763,408 in government grants in the second quarter of 2007, while none in the second quarter of 2008, also affected the comparison of the two periods unfavorably."
Now, in the next quarters the new acquisition numbers will kick in. Fundamentals are all there for an impressive growth. Company does not appear to slow down at all.
Summary: Excellent 2Q numbers (beat all analysts forecasts) coupled with great chart setup - if that doesn't give HRBN a nice jump, I would be really suprised. Anyways, no worries here for the long term as usual.
Tongxin International (TXIC) - Look, it's not a disaster that the company's stock is down less than 6% from the time they got the merger complete. Once again, many chinese stocks are down 40%+ in the past 6 months. Disappointed about lack of upward movement? Yes. Worried yet? NO. Give it time and wait for earnings.
Almost Family (AFAM) - What a beast. Great earnings, just great. Chart is getting overextended though. If you are not out of it yet, I would suggest to take profits here. Has to settle a bit.
Here is my thinking on the market:
So far, market acts as I pretty much expected: bottomed at 10,800-11,100 area. Now, pushed over 11,600's with Nasdaq and S&P500 breaking out technically. Unless something changes materially, we should see a next resistance at 12,200-12,300 area fairly soon. Still on target for 13k by late Sept or Oct.
Chinese market is about to start heating up again. It seems to be bottoming out at 2500-2700 area. Even if it goes slightly lower, this looks like a bottom. Statistically, stocks of the country with Olympics gain on average 30% in the next 9 months after Olympics. So, start nibbling on your favorite Chinese high flyers :), but I would suggest to stick with stocks that got great fundamentals. We are about to witness a next wave in Chinese stocks buying. Get ready for it...
Saturday, August 2, 2008
Updates and new stock to watch
Very nice week for our undervalued small caps:
YTEC - Since mentioning it at low $11's, it had a very nice week. The break of mid-high $11's was crucial. We saw a nice gain all the way to mid $13's even when the market wasn't doing too good. Hard to say what will happen next, but some profit taking is inevitable at this point.
AFAM - wanted to mention it one more time. It continues to amaze me, as it breaks new high every week. It now reached $35, making it a solid 75% gain since mentioning it at $20 just a few months ago.
HEK - another solid performer this week. But its warrants make it a better play, because of the percentage gain.
HRBN - again, based on the chart, as mentioned earlier, it's starting to come out from the low base closing at just above 50 dma even in the down market. Last time we closed above 50 dma, we had a nice run for another 4 points. I believe this is the beginning of a very solid uptrend. The earnings are coming shortly and should continue to tell a successful story here. It's still early....
One continuous disappointment is TXIC (Tongxin International). Disappointment in terms of not gaining anything. I would take any not-losing stock in this market though :) Unfortunately, it's still not attracting the masses, but the earnings are coming and we may get some more exposure based on them...
New stock to watch - MAQ and the warrants MAQ-NT (MAQ+). More on this company in a few days. Quick note - the vote on acquisition is expected within next 10 days, so be sure to know the risks associated with it.
More updates in a few days....
YTEC - Since mentioning it at low $11's, it had a very nice week. The break of mid-high $11's was crucial. We saw a nice gain all the way to mid $13's even when the market wasn't doing too good. Hard to say what will happen next, but some profit taking is inevitable at this point.
AFAM - wanted to mention it one more time. It continues to amaze me, as it breaks new high every week. It now reached $35, making it a solid 75% gain since mentioning it at $20 just a few months ago.
HEK - another solid performer this week. But its warrants make it a better play, because of the percentage gain.
HRBN - again, based on the chart, as mentioned earlier, it's starting to come out from the low base closing at just above 50 dma even in the down market. Last time we closed above 50 dma, we had a nice run for another 4 points. I believe this is the beginning of a very solid uptrend. The earnings are coming shortly and should continue to tell a successful story here. It's still early....
One continuous disappointment is TXIC (Tongxin International). Disappointment in terms of not gaining anything. I would take any not-losing stock in this market though :) Unfortunately, it's still not attracting the masses, but the earnings are coming and we may get some more exposure based on them...
New stock to watch - MAQ and the warrants MAQ-NT (MAQ+). More on this company in a few days. Quick note - the vote on acquisition is expected within next 10 days, so be sure to know the risks associated with it.
More updates in a few days....
Tuesday, July 29, 2008
Waiting time
It's now waiting time for the earnings that will come in August for many value stocks, such as HRBN and TXIC. Really nice chart is forming for HRBN. Hoping to see more volume with 2 weeks left before the earnings.
HEK is looking very good in the past few days - mentioned on the watch list few weeks ago...
Here is another stock that's worth mentioning. This is kind of odd to come back to this stock, but the chart is starting to look attractive. The stock is the second stock that was mentioned on this blog more than a year and a half ago :) - it's YTEC (Yucheng Technologies). Volume is coming back to this stock, and it seems to be making a good base in $10's... Break over high $11's will make the stock very attractive even if for a short term only.
Market tried to test the lows in 10800-11100 area, not going below 11k this time. So far, test was successful and it's nice to see a recovery after yesterday's big drop. We are maybe on the way to 13k by late Sep / Oct. time.
Let's see what happens from here....
HEK is looking very good in the past few days - mentioned on the watch list few weeks ago...
Here is another stock that's worth mentioning. This is kind of odd to come back to this stock, but the chart is starting to look attractive. The stock is the second stock that was mentioned on this blog more than a year and a half ago :) - it's YTEC (Yucheng Technologies). Volume is coming back to this stock, and it seems to be making a good base in $10's... Break over high $11's will make the stock very attractive even if for a short term only.
Market tried to test the lows in 10800-11100 area, not going below 11k this time. So far, test was successful and it's nice to see a recovery after yesterday's big drop. We are maybe on the way to 13k by late Sep / Oct. time.
Let's see what happens from here....
Tuesday, July 22, 2008
Quick update and some thoughts
Just a quick update on HRBN, AFAM and TXICF.OB
Harbin Electric (HRBN) - nice chart developing. Last week we had MACD crossover with confirmation. Ever since, the stock has been inching higher. We still have ways to go, but it's nice to see that the lows in $12.90-13.00 area were held again.
Now, we are looking at at the next big resistance in $16.00 - 17.00 area.... Will be interesting to see if the inverse head & shoulders pattern develops in that area.
We heard the details of the acquisition. The acquisition price was at the high end of the estimates, but it's still a very good deal with accreative earnings. Earnings are coming within 2-3 weeks and I believe they should be good.
Tongxin International (TXICF.OB) - well, this day finally arrived, even though it's half a year later, than I expected :)
http://www.otcbb.com/asp/dailylist_detail.asp?d=07/22/2008&mkt_ctg=OTCBB
The stock will be listed on Nasdaq Global Market on Wednesday, July 23rd.
Earnings will be here in 2-3 weeks, as well. I don't anticipate a significant move yet, but I do hope that we'll start seeing PRs and more info coming out from the company, which should generate investors' interest.
Almost Family (AFAM) - Has been going up no matter what market was doing. Nice 50% gain from the recommended $20 buys. The volume significantly increased, and it might be good time to drop it from "undiscovered" list, at least for the time being. Great gain in a short time.
Finally, some thoughts on the market:
In the last update I mentioned that I think DOW may drop to 10,800 and that I thought 10,800-11,100 was the bottom. Well, so far it turned out exactly that way. Time will tell if this 10,800 will hold, but I still believe we'll see DOW around 13k as early as late Sep / October.
The situation reminds me of when everybody was in euphoria, when DOW was hitting 14,300 and we had our first drop. Everybody was still buying, screaming "buy that dip, we are going much higher". Well, this looks very similar to me, except the situation is reversed. We had our first good bounce, but many are still screaming "short that bounce, we are going much lower". Again, time will tell, but it seems to me that the mkt is starting to look past the credit problems and trying to look at the economy in 6-9 month frame.
Harbin Electric (HRBN) - nice chart developing. Last week we had MACD crossover with confirmation. Ever since, the stock has been inching higher. We still have ways to go, but it's nice to see that the lows in $12.90-13.00 area were held again.
Now, we are looking at at the next big resistance in $16.00 - 17.00 area.... Will be interesting to see if the inverse head & shoulders pattern develops in that area.
We heard the details of the acquisition. The acquisition price was at the high end of the estimates, but it's still a very good deal with accreative earnings. Earnings are coming within 2-3 weeks and I believe they should be good.
Tongxin International (TXICF.OB) - well, this day finally arrived, even though it's half a year later, than I expected :)
http://www.otcbb.com/asp/dailylist_detail.asp?d=07/22/2008&mkt_ctg=OTCBB
The stock will be listed on Nasdaq Global Market on Wednesday, July 23rd.
Earnings will be here in 2-3 weeks, as well. I don't anticipate a significant move yet, but I do hope that we'll start seeing PRs and more info coming out from the company, which should generate investors' interest.
Almost Family (AFAM) - Has been going up no matter what market was doing. Nice 50% gain from the recommended $20 buys. The volume significantly increased, and it might be good time to drop it from "undiscovered" list, at least for the time being. Great gain in a short time.
Finally, some thoughts on the market:
In the last update I mentioned that I think DOW may drop to 10,800 and that I thought 10,800-11,100 was the bottom. Well, so far it turned out exactly that way. Time will tell if this 10,800 will hold, but I still believe we'll see DOW around 13k as early as late Sep / October.
The situation reminds me of when everybody was in euphoria, when DOW was hitting 14,300 and we had our first drop. Everybody was still buying, screaming "buy that dip, we are going much higher". Well, this looks very similar to me, except the situation is reversed. We had our first good bounce, but many are still screaming "short that bounce, we are going much lower". Again, time will tell, but it seems to me that the mkt is starting to look past the credit problems and trying to look at the economy in 6-9 month frame.
Tuesday, July 8, 2008
Stocks, observation, market in general...
First, I would like to provide some updates on the stocks I'm watching or following in no paricular order:
HRBN - Harbin Electric
Back on June 19th in my post I have inserted a graph, which showed an important line that the stock was bouncing off for months. I was under impression that the market would recover due to falling oil prices. Well, the oil prices didn't fall. They just continued on impressive rally with everybody and their butlers buying anything that has the word "oil" in it. Remember dot-com era? Remember real-estate era? What does this oil rally remind you off now? I'll discuss more about this later in the post. Back to our stock. HRBN has never been doing good with market weakness, and since the market took a big plunge, it took HRBN along for a ride, especially since that support line was broken.
Now, it has been severely oversold (RSI is well below 30), but what is not oversold in this market? :) On the positive note, today it bounced off the lows in $12.90's that it's been bouncing off two times before. Plus, the bounce was very bullish, as it closed positive on good volume.
On the news front - We've heard the details of the financing: 3.5 mil shares at $14.17. It's a big dillution, but this was expected. Most of the money will go to the acquisition of the profitable company. News on this deal are supposed to hit any day now.
Yes, I'm disappointed in the short term movement of HRBN, but I like how the company is positioning itself for explosive growth in the next 2-3 years. No worries about long term potential so far.
Finally, the stock has been added to Russell 3000.
TXICF.OB - Tongxin International
Ever since hitting the resistance at all time high, we've been sliding on very small volume (except a few pre-arranged blocks). Nothing to be concerned about at this point, as the stock is really less than 10% from its highs, which is very good considered that most Chinese stocks are down 50% and more from their highs.
One thing that is bothering me is the Nasdaq listing, of course. Too many promises so far - not a good start for a company.
But, check out this latest news about the state of Chinese autosales:
http://biz.yahoo.com/ap/080708/china_gm_ford.html
Key points:
Bodes very well for both TXICF and HRBN.
Also, it appears Fenberg has increased his holdings to 2+ mil shares compared to 1.4 mil shares from the last filing. Not sure if this was the result of warrants exercise or new purchases. In any case, it can't hurt.
CNEH.OB - China North East Petroleum.
Well, the stock has more than tripled from its lows in 2008 all the way to $5.60.
This was a great price to take a break and reevaluate. This is what a lot of people did locking in their hefty profits. Stock went down 25% after reaching its highs few days ago on good profit taking. What happens next? Hard to say: oil is falling (at least for now), there are many other good oversold plays, and nobody wants to hold anything right now. At this point, I'm dropping it from "Undiscovered" stocks, as the recent run with huge volume pretty much confirmed that the stock was indeed discovered. Perhaps it's still a good play, but triple in a few months in this tough year is more than enough.
TVOC.OB - Texas Vanguard
Never really caught up with the masses. Still undiscovered, but really not doing anything. Perhaps, earnings in August will shed some more light. At this point, there is really nothing more on it to update. Maybe one day it'll jump like CWSI.OB did as highlighted earlier in the year.
BSIC.OB - Basic Earth Science
Earnings restatements news came out of nowhere. Was well explained by CEO, and the stock even came back nicely after all the negativity. But, with oil momentum slowly dying, the stock went down as well. Plus, late filing is another factor causing a slide. Always lock in at least half of your profits when the stock is up nicely (and it was up significantly at $2.90s)
AFAM - Almost Family
As mentioned earlier, it's a recession-free market-weakness-free stock :) Just keeps on going. Long term - no other updates.
New stocks on watch at this moment: HEK, SRRY.OB
Now, where does this market go from here? I personally doubt DOW will get to 10k. It may drop to 10,800, but this is as low as it might go, in my opinion. 10800-11100 is the bottom, and if we haven't reached it yet, we might reach it soon. Perhaps, one more big scare to flush everybody out? DOW should be around 13k again as early as late Sep / October, in my opinion. Time will tell :)
Chinese stocks should get back in favor, especially with Olympics exposure. Chinese economy is not slowing down as US economy. Upcoming earnings should show that.
For now, be really careful in this market. Good luck!
HRBN - Harbin Electric
Back on June 19th in my post I have inserted a graph, which showed an important line that the stock was bouncing off for months. I was under impression that the market would recover due to falling oil prices. Well, the oil prices didn't fall. They just continued on impressive rally with everybody and their butlers buying anything that has the word "oil" in it. Remember dot-com era? Remember real-estate era? What does this oil rally remind you off now? I'll discuss more about this later in the post. Back to our stock. HRBN has never been doing good with market weakness, and since the market took a big plunge, it took HRBN along for a ride, especially since that support line was broken.
Now, it has been severely oversold (RSI is well below 30), but what is not oversold in this market? :) On the positive note, today it bounced off the lows in $12.90's that it's been bouncing off two times before. Plus, the bounce was very bullish, as it closed positive on good volume.
On the news front - We've heard the details of the financing: 3.5 mil shares at $14.17. It's a big dillution, but this was expected. Most of the money will go to the acquisition of the profitable company. News on this deal are supposed to hit any day now.
Yes, I'm disappointed in the short term movement of HRBN, but I like how the company is positioning itself for explosive growth in the next 2-3 years. No worries about long term potential so far.
Finally, the stock has been added to Russell 3000.
TXICF.OB - Tongxin International
Ever since hitting the resistance at all time high, we've been sliding on very small volume (except a few pre-arranged blocks). Nothing to be concerned about at this point, as the stock is really less than 10% from its highs, which is very good considered that most Chinese stocks are down 50% and more from their highs.
One thing that is bothering me is the Nasdaq listing, of course. Too many promises so far - not a good start for a company.
But, check out this latest news about the state of Chinese autosales:
http://biz.yahoo.com/ap/080708/china_gm_ford.html
Key points:
- "The Chinese vehicle market has continued to grow in 2008, setting a new first half sales record," said Kevin Wale, president of GM China, in a written statement.
- U.S., European and Japanese automakers and their local partners are investing heavily to expand production and sales in China, the world's second-largest vehicle market after the United States.
- Auto sales in China have been largely unaffected by high global oil prices because government controls have kept retail gasoline and diesel prices at levels that are among the world's lowest. Automakers say sales of SUVs and luxury sedans are growing at annual rates of up to 100 percent.
Bodes very well for both TXICF and HRBN.
Also, it appears Fenberg has increased his holdings to 2+ mil shares compared to 1.4 mil shares from the last filing. Not sure if this was the result of warrants exercise or new purchases. In any case, it can't hurt.
CNEH.OB - China North East Petroleum.
Well, the stock has more than tripled from its lows in 2008 all the way to $5.60.
This was a great price to take a break and reevaluate. This is what a lot of people did locking in their hefty profits. Stock went down 25% after reaching its highs few days ago on good profit taking. What happens next? Hard to say: oil is falling (at least for now), there are many other good oversold plays, and nobody wants to hold anything right now. At this point, I'm dropping it from "Undiscovered" stocks, as the recent run with huge volume pretty much confirmed that the stock was indeed discovered. Perhaps it's still a good play, but triple in a few months in this tough year is more than enough.
TVOC.OB - Texas Vanguard
Never really caught up with the masses. Still undiscovered, but really not doing anything. Perhaps, earnings in August will shed some more light. At this point, there is really nothing more on it to update. Maybe one day it'll jump like CWSI.OB did as highlighted earlier in the year.
BSIC.OB - Basic Earth Science
Earnings restatements news came out of nowhere. Was well explained by CEO, and the stock even came back nicely after all the negativity. But, with oil momentum slowly dying, the stock went down as well. Plus, late filing is another factor causing a slide. Always lock in at least half of your profits when the stock is up nicely (and it was up significantly at $2.90s)
AFAM - Almost Family
As mentioned earlier, it's a recession-free market-weakness-free stock :) Just keeps on going. Long term - no other updates.
New stocks on watch at this moment: HEK, SRRY.OB
Now, where does this market go from here? I personally doubt DOW will get to 10k. It may drop to 10,800, but this is as low as it might go, in my opinion. 10800-11100 is the bottom, and if we haven't reached it yet, we might reach it soon. Perhaps, one more big scare to flush everybody out? DOW should be around 13k again as early as late Sep / October, in my opinion. Time will tell :)
Chinese stocks should get back in favor, especially with Olympics exposure. Chinese economy is not slowing down as US economy. Upcoming earnings should show that.
For now, be really careful in this market. Good luck!
Tuesday, June 24, 2008
Quick update
Quick update on two stocks - TVOC.OB and TXICF.OB
TVOC.OB had what I call a "day 1 - discovery". Very nice volume with a jump in share price - the highest volume in over 3 years. Keep in mind, 54k volume is roughly 17% of entire float, which is only 314k.
Quick comparison to MXC, which has a float of 540k - before MXC took off from $4's, the stock was trading 0 - 3000 shares for a long time. Then it doubled on tiny volume to $8. Since then, the volume increased significantly all the way to $50+.
OTCBB is the big factor, but TVOC.OB is profitable company with eye-popping fundamentals and with easy comps compared to the last year. 2Q earnings are coming in August.
Recap from the early write-up:
http://undiscoveredstocks.blogspot.com/2008/05/quick-update-on-aaacob.html
Side note: watch TVOC.OB for movement on MXC sympathy.
Actually, TVOC.OB is much better than MXC, which moved from $4 to $44 in just a few weeks.
TVOC.OB trailing PE is 15, while MXC's is 175
TVOC.OB float is 314k, while MXC's is 549k
Latest 1Q earnings came in at .39!!!!
Stock is priced at the last year's oil&gas prices.
In 2007:
Oil Production volume - 61,293 barrels
Average sales price per barrel - $68.04
Gas Production volume - 359,969 MCF
Average sales price per MCF - $7.24
Now, on TXICF.OB (former AAAC.OB).
Very nice volume and movement in the past few days with few big blocks. Yesterday we hit all-time resistance level, plus the chart looked like the stock was getting slightly overbought. I expect the stock to base here (perhaps with some profit taking) before resuming its move.
On the new stocks to watch - not ready yet. Found some red flags that require more research.
TVOC.OB had what I call a "day 1 - discovery". Very nice volume with a jump in share price - the highest volume in over 3 years. Keep in mind, 54k volume is roughly 17% of entire float, which is only 314k.
Quick comparison to MXC, which has a float of 540k - before MXC took off from $4's, the stock was trading 0 - 3000 shares for a long time. Then it doubled on tiny volume to $8. Since then, the volume increased significantly all the way to $50+.
OTCBB is the big factor, but TVOC.OB is profitable company with eye-popping fundamentals and with easy comps compared to the last year. 2Q earnings are coming in August.
Recap from the early write-up:
http://undiscoveredstocks.blogspot.com/2008/05/quick-update-on-aaacob.html
Side note: watch TVOC.OB for movement on MXC sympathy.
Actually, TVOC.OB is much better than MXC, which moved from $4 to $44 in just a few weeks.
TVOC.OB trailing PE is 15, while MXC's is 175
TVOC.OB float is 314k, while MXC's is 549k
Latest 1Q earnings came in at .39!!!!
Stock is priced at the last year's oil&gas prices.
In 2007:
Oil Production volume - 61,293 barrels
Average sales price per barrel - $68.04
Gas Production volume - 359,969 MCF
Average sales price per MCF - $7.24
Now, on TXICF.OB (former AAAC.OB).
Very nice volume and movement in the past few days with few big blocks. Yesterday we hit all-time resistance level, plus the chart looked like the stock was getting slightly overbought. I expect the stock to base here (perhaps with some profit taking) before resuming its move.
On the new stocks to watch - not ready yet. Found some red flags that require more research.
Thursday, June 19, 2008
Update on current stocks
Just an update on the stocks I follow in no particular order:
HRBN - I like the test of 50 dma at low $16's. Every time it goes down to test that level, nice bids show up to support the price, showing continuous accumulation.
Check out the following chart:
This is an important support line to hold and I believe it will hold. Watch for MACD crossover. If the market bounces from here (and I strongly believe it will), we should see a nice run developing soon.
Another factor that may impact the share price of HRBN is upcoming details on the acquisition, which are supposed to be announced by the end of the month. Many are on the sidelines, waiting to hear these details to know exactly what financing options the company has planned for the acquisition. Watch for the news in the next 10 days, in my opinion.
AAAC.OB is no longer AAAC.OB, but not yet on Nasdaq. The ticker has been changed to reflect the new company, but the stock so far remains on OTCBB. The new symbol is TXICF.OB (warrants - TXIWF.OB and units - TXIUF.OB). This is normal practice. One quick example - YTEC. This company used to be a blank check acquisition company - China Unistone Acquisition Inc. traded on OTCBB as CUAQ.OB. Once the merger happened, it changed the ticker to YCHTF.OB some time later. Then, a little later after that, the company was transferred on Nasdaq with the symbol of YTEC. Nasdaq is more strict to SPACs now, so it seems some additional requirements are delaying the process. The stock is holding up nicely with continuous bid support. No worries there. On another note, remember CSCA.OB (now APWR). The stock has been unstoppable all the way from $7's to $30+.
Remember who the top holder is? Jeff Feinberg with his fund. Food for thought - He owned over 40% of original CSCA.OB shares, and he also owns 24% of original AAAC.OB shares.
Again - no worries there.
BSIC.OB - Slowly, but surely, gaining the momentum and interest. Reached $2.94 high today before retracing on good volume. Earnings run started, as they are expected within next 10 days. Great company and great long term, if the oil prices stay above $100. They recently reported that all 32 wells are now operational, and they are very excited about the current production levels.
AFAM - announced the biggest acquisition to date:
Almost Family signs definitive agreement to acquire Patient Care; expected to contribute significantly to earnings in '08 but is expected to be accretive to EPS in '09
Also, as pointed out by one of the readers "the divot", a great article came out about this company:
http://www.smallcapinvestor.com/articles/06132008-almost_family_home_healthcare_firm_makes_itself_at_home
This article came out before the acquisition announcement, and here is one paragraph from there:
"Avondale Partners raised its earnings estimate for 2008 as a whole to $1.48 from $1.27 and for 2009 to $1.60 from $1.34, not taking into account any new acquisitions, which the analysts consider likely. "
Once again, just a great long term hold.
CNEH.OB - continues to trade in the range. $3.73-$3.75 is the level to watch for a break to the downside, $4.50 is the level to watch for the break to the upside. Other than that, the stock will probably get a lot of attention when Q2 numbers are released, but there is still plenty of time until then. There are also a few upcoming road shows.
TVOC.OB - saw a little bit of movement today. 5k+ volume is better than 0 for this stock :). No worries here. Downside is limited, upside could be great. I like risk/reward ratio here. Again, the earnings are in August.
I will have a few new stocks to watch, as I finish my DD on them hopefully in the next few days.
One that I don't really consider undiscovered, but just a potentially great company is HEK - Heckmann corporation, which is another SPAC with a great management, acquiring China Water and Drinks company. This is a good article to read about the deal:
http://www.forbes.com/2008/05/21/china-water-heckmann-markets-equity-cx_mp_0520markets30.html
Good luck!
HRBN - I like the test of 50 dma at low $16's. Every time it goes down to test that level, nice bids show up to support the price, showing continuous accumulation.
Check out the following chart:
This is an important support line to hold and I believe it will hold. Watch for MACD crossover. If the market bounces from here (and I strongly believe it will), we should see a nice run developing soon.
Another factor that may impact the share price of HRBN is upcoming details on the acquisition, which are supposed to be announced by the end of the month. Many are on the sidelines, waiting to hear these details to know exactly what financing options the company has planned for the acquisition. Watch for the news in the next 10 days, in my opinion.
AAAC.OB is no longer AAAC.OB, but not yet on Nasdaq. The ticker has been changed to reflect the new company, but the stock so far remains on OTCBB. The new symbol is TXICF.OB (warrants - TXIWF.OB and units - TXIUF.OB). This is normal practice. One quick example - YTEC. This company used to be a blank check acquisition company - China Unistone Acquisition Inc. traded on OTCBB as CUAQ.OB. Once the merger happened, it changed the ticker to YCHTF.OB some time later. Then, a little later after that, the company was transferred on Nasdaq with the symbol of YTEC. Nasdaq is more strict to SPACs now, so it seems some additional requirements are delaying the process. The stock is holding up nicely with continuous bid support. No worries there. On another note, remember CSCA.OB (now APWR). The stock has been unstoppable all the way from $7's to $30+.
Remember who the top holder is? Jeff Feinberg with his fund. Food for thought - He owned over 40% of original CSCA.OB shares, and he also owns 24% of original AAAC.OB shares.
Again - no worries there.
BSIC.OB - Slowly, but surely, gaining the momentum and interest. Reached $2.94 high today before retracing on good volume. Earnings run started, as they are expected within next 10 days. Great company and great long term, if the oil prices stay above $100. They recently reported that all 32 wells are now operational, and they are very excited about the current production levels.
AFAM - announced the biggest acquisition to date:
Almost Family signs definitive agreement to acquire Patient Care; expected to contribute significantly to earnings in '08 but is expected to be accretive to EPS in '09
Also, as pointed out by one of the readers "the divot", a great article came out about this company:
http://www.smallcapinvestor.com/articles/06132008-almost_family_home_healthcare_firm_makes_itself_at_home
This article came out before the acquisition announcement, and here is one paragraph from there:
"Avondale Partners raised its earnings estimate for 2008 as a whole to $1.48 from $1.27 and for 2009 to $1.60 from $1.34, not taking into account any new acquisitions, which the analysts consider likely. "
Once again, just a great long term hold.
CNEH.OB - continues to trade in the range. $3.73-$3.75 is the level to watch for a break to the downside, $4.50 is the level to watch for the break to the upside. Other than that, the stock will probably get a lot of attention when Q2 numbers are released, but there is still plenty of time until then. There are also a few upcoming road shows.
TVOC.OB - saw a little bit of movement today. 5k+ volume is better than 0 for this stock :). No worries here. Downside is limited, upside could be great. I like risk/reward ratio here. Again, the earnings are in August.
I will have a few new stocks to watch, as I finish my DD on them hopefully in the next few days.
One that I don't really consider undiscovered, but just a potentially great company is HEK - Heckmann corporation, which is another SPAC with a great management, acquiring China Water and Drinks company. This is a good article to read about the deal:
http://www.forbes.com/2008/05/21/china-water-heckmann-markets-equity-cx_mp_0520markets30.html
Good luck!
Wednesday, June 11, 2008
Updates on current stocks
Current list of "undiscovered" stocks include - HRBN, AAAC.OB, BSIC.OB, AFAM, CNEH.OB, TVOC.OB.
HRBN - down due to market weakness and lack of volume (and interest). It's trying to test 50-day MA at $16.01. Stock has also been down 4 days in a row. Long term - nothing changed, all fundamentals are still there. Short term - a bounce is expected and new leg up should commence shortly after successful test of 50-day MA.
AAAC.OB - same old "Nasdaq listing any day now". Still waiting... It's nice to see the stock to break 7.90-7.95 level on volume in both stock and warrants. Very large bids are showing up on Level II in the past few days.
BSIC.OB - took a dip to below $2 mark after hitting $3. The stock has been up since then, but will probably trade in the range of $2.26 - $2.75 until the earnings report, which should come in at the end of June. With the oil up significantly, we should see nice numbers for the year.
AFAM - probably no need for updates on this one. This is purely long term play, which is not really affected by the weakness in the market.
CNEH.OB - will probably trade in the range for a little bit, as technicals seem to be improving. Watch MACD crossover, as it might occur within a week. The stock will get a lot of attention when Q2 numbers are released, but there is still plenty of time until then.
TVOC.OB - no love for this stock. Extremely undervalued, but nobody wants to buy it with the tiny float it has (314k). Most likely will have to wait until next quarter eye-popping numbers are released in August.
HRBN - down due to market weakness and lack of volume (and interest). It's trying to test 50-day MA at $16.01. Stock has also been down 4 days in a row. Long term - nothing changed, all fundamentals are still there. Short term - a bounce is expected and new leg up should commence shortly after successful test of 50-day MA.
AAAC.OB - same old "Nasdaq listing any day now". Still waiting... It's nice to see the stock to break 7.90-7.95 level on volume in both stock and warrants. Very large bids are showing up on Level II in the past few days.
BSIC.OB - took a dip to below $2 mark after hitting $3. The stock has been up since then, but will probably trade in the range of $2.26 - $2.75 until the earnings report, which should come in at the end of June. With the oil up significantly, we should see nice numbers for the year.
AFAM - probably no need for updates on this one. This is purely long term play, which is not really affected by the weakness in the market.
CNEH.OB - will probably trade in the range for a little bit, as technicals seem to be improving. Watch MACD crossover, as it might occur within a week. The stock will get a lot of attention when Q2 numbers are released, but there is still plenty of time until then.
TVOC.OB - no love for this stock. Extremely undervalued, but nobody wants to buy it with the tiny float it has (314k). Most likely will have to wait until next quarter eye-popping numbers are released in August.
Wednesday, May 21, 2008
Few updates
Oil&Gas craziness continues. It seems like if the stock has anything to do with oil&gas and it trades on AMEX, it runs wild. I believe once there will be no more AMEX stocks to run, it'll spill over to Bulletin Board oil&gas stocks.
BSIC.OB jumped from $1.70's (recommendation) to $3.04 in a matter of a week. Today, it pulled back a little - nothing goes straight up (unless it's MXC). $3 is a major resistance and I'm pretty sure it'll try that again, who knows - maybe even tomorrow. The stock really started its run from $1, making it 200% run in just a few weeks. It's just taking a little break to reload. Very bright future here with excellent management. It's not your regular pump&dump stock. It's slowly gaining more interest, indicated by the increasing volume. I think the run will continue after a small consolidation.
AFAM continues to run (since recommendation at just below $21), ignoring the market weakness. During the previous market crash at the beginning of the year, it pretty much ignored it too. This is not a daytrade by any means. Just a solid long term hold.
TVOC.OB is getting ready to be discovered once the oil&gas momentum spills over to Bulletin Board stocks. The stock is priced in at prices of oil in $60's. Where else you can find an oil&gas stock with TRAILING PE of less than 16, when these previous earnings were based on $68 dollars average price of oil? Besides coming up with $0.39 in Q1, it has a tiny float - 314k.
HRBN - just trading in the range. Small weakness today due to general market weakness. The good thing it closed above 200dma, so it's holding for now.
BSIC.OB jumped from $1.70's (recommendation) to $3.04 in a matter of a week. Today, it pulled back a little - nothing goes straight up (unless it's MXC). $3 is a major resistance and I'm pretty sure it'll try that again, who knows - maybe even tomorrow. The stock really started its run from $1, making it 200% run in just a few weeks. It's just taking a little break to reload. Very bright future here with excellent management. It's not your regular pump&dump stock. It's slowly gaining more interest, indicated by the increasing volume. I think the run will continue after a small consolidation.
AFAM continues to run (since recommendation at just below $21), ignoring the market weakness. During the previous market crash at the beginning of the year, it pretty much ignored it too. This is not a daytrade by any means. Just a solid long term hold.
TVOC.OB is getting ready to be discovered once the oil&gas momentum spills over to Bulletin Board stocks. The stock is priced in at prices of oil in $60's. Where else you can find an oil&gas stock with TRAILING PE of less than 16, when these previous earnings were based on $68 dollars average price of oil? Besides coming up with $0.39 in Q1, it has a tiny float - 314k.
HRBN - just trading in the range. Small weakness today due to general market weakness. The good thing it closed above 200dma, so it's holding for now.
Tuesday, May 20, 2008
Quick update on AAAC.OB
Very nice presentation today at Brean Murray Conference:
Link here -> http://www.wsw.com/webcast/bmry3/aaac/
Some highlights:
If you were on sidelines before, now it's becoming a table pounder. Warrants could provide a best play here. Notice how they are now trading at a premium
Good luck!
Side note: watch TVOC.OB for movement on MXC sympathy.
Actually, TVOC.OB is much better than MXC, which moved from $4 to $44 in just a few weeks.
TVOC.OB trailing PE is 15, while MXC's is 175
TVOC.OB float is 314k, while MXC's is 549k
Latest 1Q earnings came in at .39!!!!
Stock is priced at the last year's oil&gas prices.
In 2007:
Oil Production volume - 61,293 barrels
Average sales price per barrel - $68.04
Gas Production volume - 359,969 MCF
Average sales price per MCF - $7.24
I don't have to stress how much higher oil&gas are right now :)
Today, TVOC.OB hit all time high on the higest volume in years. Yes, it's only 36k, but that's over 10% of the float and is very high for this thin stock.
MXC started the same way. Look at it now...
Anything can happen, but with oil&gas craziness, I would not be surprised to see a double from here in this market. At the same time, it is a dangerous play, as it has very low liquidity and low float stocks are generally hard to play.
Be careful and good luck!
Link here -> http://www.wsw.com/webcast/bmry3/aaac/
Some highlights:
- Tongxin International (AAAC.OB) will be transferring to Nasdaq "in the next few days" - quote from Rudy Wilson (COO of the company) on today's presentation.
- Reiterated guidance for 2008 - $15 mil in net income or $1 in EPS based on 15.3 mil O/S
- Expansion of sales to North America and Europe
- Additional profitable acquisition at the end of the year
- More exposure after Nasdaq hits
- Over 30% growth
- Long term contracts
- Very experienced management (30+ years)
If you were on sidelines before, now it's becoming a table pounder. Warrants could provide a best play here. Notice how they are now trading at a premium
Good luck!
Side note: watch TVOC.OB for movement on MXC sympathy.
Actually, TVOC.OB is much better than MXC, which moved from $4 to $44 in just a few weeks.
TVOC.OB trailing PE is 15, while MXC's is 175
TVOC.OB float is 314k, while MXC's is 549k
Latest 1Q earnings came in at .39!!!!
Stock is priced at the last year's oil&gas prices.
In 2007:
Oil Production volume - 61,293 barrels
Average sales price per barrel - $68.04
Gas Production volume - 359,969 MCF
Average sales price per MCF - $7.24
I don't have to stress how much higher oil&gas are right now :)
Today, TVOC.OB hit all time high on the higest volume in years. Yes, it's only 36k, but that's over 10% of the float and is very high for this thin stock.
MXC started the same way. Look at it now...
Anything can happen, but with oil&gas craziness, I would not be surprised to see a double from here in this market. At the same time, it is a dangerous play, as it has very low liquidity and low float stocks are generally hard to play.
Be careful and good luck!
Monday, May 19, 2008
Blast from the past and some updates
Back in February I highlighted a promising chinese wind power stock - "China Wind Systems" (CWSI.OB). At that time it was trading at $2.00-$2.10. It had a quick run up to $2.50 and then retreated. Again - very promising due to the growth that the management expected. The trading has been really quiet for 3 months, as the momentum from china wind power never caught on with this stock. Well, lately it has been chinese stocks all over again and especially the ones with profits.
On Thursday, the company released great earnings, which actually were expected as the management provided the business outlook earlier, but for some reason these results were really NOT expected by the momo crowd :). And, what do we have? The stock suddenly jumps over 160% to close at $6.00 (up 134% on a day). I guess this is where the saying "patience pays" really applies.
I can't really predict the movement from here on, as this is now purely a momentum play and anything is possible at this point - from pump&dump to a run similar to PDO or MXC. Take your pick and be careful with it.
Now, some updates on other stocks -
China North East Petroleum (CNEH.OB)
Posted excellent earnings last week and stock did not sell off even after an impressive run up. Instead, it kept on going and today it hit the resistance right near the all-time high. Just a month ago, the stock was trading below $2 and many have lost their patience with it. Once again - "patience pays." It is turning out to be a great play of 2008 as expected, and it's not finished yet.
Highlights from the earnings release:
The company is delivering and it's definitely gaining the Wall Street trust.
Once again, it hit the resistance at all-time high, and currently going through a small technical correction. In the long run, the stock and the company should continue to perform.
Basic Earth Science Systems (BSIC.OB)
Since highlighting this stock in $1.70, it has gained 50% (closing at 40% today), and I believe it's just starting to gain Wall Street atention. Its prospects are impressive. Nice micro oil&gas play with low O/S and float in the hottest area. Fundamentals are great for this small company. With other similar type plays making huge runs, such as PDO, MXC, FPP, I don't see why this company can't have another at least 100% run. It usually runs similar to FPP, so the race is on, in my opinion.
In the long term, I believe this is going to be a very successful company. We should hear about the new 16 wells soon, as well as the yearly results at the end of June. I expect more updates from the company between now and then.
Harbin Electric
After releasing impressive earnings that beat on both revenues and income, the stock has been in accumulating mode for at least 5 trading sessions. It's trading in very tight range between 17.80 and 18.20, and getting ready to resume the uptrend.
The company presented at Roth today. The new presentation has been posted on SEC:
http://sec.gov/Archives/edgar/data/1266719/000114420408030589/v115042_ex99-1.htm
Few highlights from it:
This company definitely has a great future. Remember $13's, $14's and $15's, and all the table pounding? :) These prices are starting to look further and further away. I believe they will be far away in 2010 and beyond.
No updates on AAAC (Tongxin International). Still waiting on Nasdaq. As the two stocks (CWSI.OB and CNEH.OB) showed - patience pays. It's just a matter of time before this stock makes a move.
This is all for today. Good luck!
On Thursday, the company released great earnings, which actually were expected as the management provided the business outlook earlier, but for some reason these results were really NOT expected by the momo crowd :). And, what do we have? The stock suddenly jumps over 160% to close at $6.00 (up 134% on a day). I guess this is where the saying "patience pays" really applies.
I can't really predict the movement from here on, as this is now purely a momentum play and anything is possible at this point - from pump&dump to a run similar to PDO or MXC. Take your pick and be careful with it.
Now, some updates on other stocks -
China North East Petroleum (CNEH.OB)
Posted excellent earnings last week and stock did not sell off even after an impressive run up. Instead, it kept on going and today it hit the resistance right near the all-time high. Just a month ago, the stock was trading below $2 and many have lost their patience with it. Once again - "patience pays." It is turning out to be a great play of 2008 as expected, and it's not finished yet.
Highlights from the earnings release:
- 1Q08 Revenue Increases 476% to $10.8 Million
- 1Q08 Net Income Increases 1,052% to $3.3 Million
- Net income for the first quarter increased significantly to $3.3 million, or $0.17 per diluted share, versus $287 thousand, or $0.01 per diluted share, in the first quarter of 2007.
- We now have 157 wells in production as of the end of the first quarter and expect this number to grow on a quarterly basis as we progress through the year. Our increased cash position provides us with greater flexibility to not only drill new wells this year, but also allows us to further develop oil extraction technologies and selectively pursue acquisition opportunities.
The company is delivering and it's definitely gaining the Wall Street trust.
Once again, it hit the resistance at all-time high, and currently going through a small technical correction. In the long run, the stock and the company should continue to perform.
Basic Earth Science Systems (BSIC.OB)
Since highlighting this stock in $1.70, it has gained 50% (closing at 40% today), and I believe it's just starting to gain Wall Street atention. Its prospects are impressive. Nice micro oil&gas play with low O/S and float in the hottest area. Fundamentals are great for this small company. With other similar type plays making huge runs, such as PDO, MXC, FPP, I don't see why this company can't have another at least 100% run. It usually runs similar to FPP, so the race is on, in my opinion.
In the long term, I believe this is going to be a very successful company. We should hear about the new 16 wells soon, as well as the yearly results at the end of June. I expect more updates from the company between now and then.
Harbin Electric
After releasing impressive earnings that beat on both revenues and income, the stock has been in accumulating mode for at least 5 trading sessions. It's trading in very tight range between 17.80 and 18.20, and getting ready to resume the uptrend.
The company presented at Roth today. The new presentation has been posted on SEC:
http://sec.gov/Archives/edgar/data/1266719/000114420408030589/v115042_ex99-1.htm
Few highlights from it:
- Reiterating revenues projections for 2010 -> 350 million excluding acquisitions
- Latest acquisition -> Weihah Hengda Electric:
2007 annual sales - 46.5 milllion growing at 30% annually would mean roughly $100 mil by 2010 - Meaning at least 450 millon in revevenues in 2010 for HRBN compared to only 65 mil in 2007.
- Foreign sales just getting started -
-- Grew international business from 3% in 2006, 12% in 2007, 17% in 1Q2008.
-- Established US office for business development - Top Four Customer sales distribution -
Went from 81% for top 4 customers and 19% for others in 2006 to 66% from top 4 customers and 34% for others - Showing consistent revenue and income growth with stable gross margins consistently above 46%.
This company definitely has a great future. Remember $13's, $14's and $15's, and all the table pounding? :) These prices are starting to look further and further away. I believe they will be far away in 2010 and beyond.
No updates on AAAC (Tongxin International). Still waiting on Nasdaq. As the two stocks (CWSI.OB and CNEH.OB) showed - patience pays. It's just a matter of time before this stock makes a move.
This is all for today. Good luck!
Thursday, May 8, 2008
New stocks of interest
Here are the stocks as promised:
1) BSIC.OB - Basic Earth Science Systems, Inc.
First - the business:
Basic Earth Science Systems, Inc. engages in the exploration, acquisition, development, operation, production, and sale of crude oil and natural gas in the United States. It primarily operates in the Williston basin in North Dakota and Montana, south Texas; and the Denver-Julesburg basin, Colorado. As of March 31, 2007, the company owned a working interest in 83 producing oil wells and 10 producing gas wells in the states of North Dakota, Montana, Colorado, Texas, and Wyoming. Its estimated proved developed oil and gas reserves were 1,185,000 barrels of oil equivalent. The company was founded in 1969 and is based in Denver, Colorado.
It's a small profitable oil&gas company, which can gain real attention once investors start looking for small undiscovered oil plays. You've seen how MXC jumped from 4's to 10 in a matter of few days. FPP doubled quickly. Here is another profitable play with exposure to the Bakken play in North Dakota.
Here is one paragraph from their latest PR:
"We continue to be excited as we announce these new production rates," commented Ray Singleton, president of Basic. "Our northeast production facility and its eight wells are now on-line and we should be reporting initial production rates from its new wells within a few weeks. Repeating our previous statement, to this point, there have been no real surprises; there have been no dry holes, all geologic sections were present, no completion problems were encountered and, as anticipated, production rates are varied, yet still within the parameters of our initial expectations. So far, operationally, this has been a very successful venture."
Stock has been doing great past few weeks and it's getting close to 52 week high. Earnings are expected shortly and I believe they are going to be great based on how high the oil is. WIth float of just over 6 mil, this stock can go quick on good results.
2) AFAM - Almost Family Inc.
Almost Family, Inc. and its subsidiaries provide home health care services in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Alabama, Indiana, Illinois, and Missouri, the United States. It operates in two segments, Visiting Nurse (VN) and Personal Care (PC). The VN segment, which operates primarily under the trade names �Caretenders' and �Mederi-Caretenders', provides a range of Medicare-certified home health nursing services to patients in need of recuperative care, typically following a period of hospitalization or care in another type of inpatient facility. It also offers specialty programs based on local needs, such as its Cardiocare Program, Orthopedic Program, Urology Program, Optimum Balance Program, and Telehealth Monitoring Program.
I've followed this company for a long time. It's very stable, continues to make great acquisitions and easily survives any downturns in the market. This one could be a great IRA hold. Don't expect to get big gains on it fast. This is a safe long term play, in my opinion.
Latest earnings were outstanding:
http://biz.yahoo.com/prnews/080506/cltu043.html?.v=101
First Quarter Highlights:
- Net service revenues increased 23% to $39.0 million
- Visiting Nurse segment net revenues rose 30% to $29.8 million
- Net income from continuing operations increased 41% to $2.6 million
- GAAP diluted EPS increased 47% to $0.44 per diluted share
- Expanded Florida presence with $16 million acquisition of Apex Home Healthcare Services, LLC in March 2008
- Closed common stock offering of 2,250,000 shares in April 2008 for net proceeds of $37.3 million
Analysts, covering the company, just raised the target to $28. 2008 EPS is expected to be $1.42 and it has been increasing. I believe this is very conservative number.
More to come on this company....
1) BSIC.OB - Basic Earth Science Systems, Inc.
First - the business:
Basic Earth Science Systems, Inc. engages in the exploration, acquisition, development, operation, production, and sale of crude oil and natural gas in the United States. It primarily operates in the Williston basin in North Dakota and Montana, south Texas; and the Denver-Julesburg basin, Colorado. As of March 31, 2007, the company owned a working interest in 83 producing oil wells and 10 producing gas wells in the states of North Dakota, Montana, Colorado, Texas, and Wyoming. Its estimated proved developed oil and gas reserves were 1,185,000 barrels of oil equivalent. The company was founded in 1969 and is based in Denver, Colorado.
It's a small profitable oil&gas company, which can gain real attention once investors start looking for small undiscovered oil plays. You've seen how MXC jumped from 4's to 10 in a matter of few days. FPP doubled quickly. Here is another profitable play with exposure to the Bakken play in North Dakota.
Here is one paragraph from their latest PR:
"We continue to be excited as we announce these new production rates," commented Ray Singleton, president of Basic. "Our northeast production facility and its eight wells are now on-line and we should be reporting initial production rates from its new wells within a few weeks. Repeating our previous statement, to this point, there have been no real surprises; there have been no dry holes, all geologic sections were present, no completion problems were encountered and, as anticipated, production rates are varied, yet still within the parameters of our initial expectations. So far, operationally, this has been a very successful venture."
Stock has been doing great past few weeks and it's getting close to 52 week high. Earnings are expected shortly and I believe they are going to be great based on how high the oil is. WIth float of just over 6 mil, this stock can go quick on good results.
2) AFAM - Almost Family Inc.
Almost Family, Inc. and its subsidiaries provide home health care services in Florida, Kentucky, Ohio, Connecticut, Massachusetts, Alabama, Indiana, Illinois, and Missouri, the United States. It operates in two segments, Visiting Nurse (VN) and Personal Care (PC). The VN segment, which operates primarily under the trade names �Caretenders' and �Mederi-Caretenders', provides a range of Medicare-certified home health nursing services to patients in need of recuperative care, typically following a period of hospitalization or care in another type of inpatient facility. It also offers specialty programs based on local needs, such as its Cardiocare Program, Orthopedic Program, Urology Program, Optimum Balance Program, and Telehealth Monitoring Program.
I've followed this company for a long time. It's very stable, continues to make great acquisitions and easily survives any downturns in the market. This one could be a great IRA hold. Don't expect to get big gains on it fast. This is a safe long term play, in my opinion.
Latest earnings were outstanding:
http://biz.yahoo.com/prnews/080506/cltu043.html?.v=101
First Quarter Highlights:
- Net service revenues increased 23% to $39.0 million
- Visiting Nurse segment net revenues rose 30% to $29.8 million
- Net income from continuing operations increased 41% to $2.6 million
- GAAP diluted EPS increased 47% to $0.44 per diluted share
- Expanded Florida presence with $16 million acquisition of Apex Home Healthcare Services, LLC in March 2008
- Closed common stock offering of 2,250,000 shares in April 2008 for net proceeds of $37.3 million
Analysts, covering the company, just raised the target to $28. 2008 EPS is expected to be $1.42 and it has been increasing. I believe this is very conservative number.
More to come on this company....
Tuesday, May 6, 2008
Updates and new stocks to watch
Few updates today on the undiscovered stocks from this blog plus a few new stocks to watch.
1) Jinpan (JST) - Well, after breaking huge resistance at $30-$31 level, it never really looked back, and finally reached the level I expected it to reach - into the $40's. I'm no longer considering it undiscovered, as I belive it found a nice level to base. It may gain a little more, but the recent gain of almost 100% in just a few months make it a risky play for a short term in the volatile market conditions. Great stock, great company, great fundamentals, great business outlook, and finally a great run - Patience paid off. And as they say - move on to the next great thing!
2) Harbin Electric (HRBN) - is still one of the most undervalued stocks out there. So far, it is only 20% from the lows reached early April, but it has a lot more to gain. I've been saying before that $13's, $14's, $15's are the best prices to pick up HRBN, as with the growth it's about to experience, the share price will not stay that low for a long time.
Here is the interesting comparison. This is from the latest JINPAN (JST) release:
For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share
As you can see, JST anticipates to have $2.64 per share in 2008. HRBN is not there yet, but analysts expect to see similar numbers in 2009 with continuous huge growth in subsequent years. JST traded at $18-$28 levels for a while, until the latest earnings release. These are completely different sectors, but the fundamentals and growh is what I'm after. As I expected JST to trade in the $40's, I expect HRBN to trade even higher in 3 years.
Now, back to earth :). Let's talk short term. Today the company announced that the earnings will be released early Friday morning (EST time) with CC followed. This is the first time the company is hosting a conference call to discuss the earnings as I mentioned earlier. This is a great sign, as company is maturing. It would go a long way if the company provides guidance on this conference call.
We should definitely hear more about the acquisition they made recently and how it will increase the bottom line.
On another note, the Bejing Airport Express Train Station is complete, and HRBN built prototype motors for the cars that will be put on the track. They are planning to be a big player in this area. Read their latest presentation. Here is just the last paragraph from the Roth Conference back in 2007:
"We know it's the largest mass transport market in the world, and giving an illustration on this slide here, is the difference between the future needs and the existing supply of railcars for the passenger marketplace. We estimate that there is going to be a need for 5000 cars by the year 2020, which would translate to an addressable market size in excess of $5 billion"
Once again - very undervalued at these prices.
3) China North East Petroleum (CNEH.OB) - what a run! 2008 is shaping up to be a great year for this undervalued gem. It's already up 100% and who knows how far this can go. I'm not going to write a lot about the company here. Instead, I'll point to the latest seekingalpha article, that perhaps brought some serious attention from the investors, as indicated by the huge run it had in the past few days. This is a must read for those interested in this company: http://seekingalpha.com/article/75660-china-north-east-petroleum-strong-growth-clear-visibility?source=side_bar_long_ideas.
Earnings are expected next week. So, the short term movement, given the earnings and the latest run, could be very volatile. But, if they continue to deliver great earnings and show great profits, this could gain another 100% pretty quick.
4) Tongxin International (Former Asia Automotive) (still AAAC.OB) - not moving yet, but as with many gems, patience is needed. Very nice 2007 earnings reported recently. They were a little better than I expected. Stock is trading at roughly trailing PE of little over 10, and 2008 PE of less than 8.
1Q earnings are expected shortly along with anticipated Nasdaq listing. I know it has been a long wait, but once Nasdaq listing comes, stock should begin to appreciate significantly. There has been some movement in warrants above premium, which is good sign, as investors are betting on higher prices. Not going to write any more on this one today. We'll see how it develops in the next 2 weeks.
Now, there are 2 stocks of interest that I would like to share. I will write a separate post on these tonight or tomorrow. The stocks of interest are: AFAM and BSIC.OB.
If you have any interesting undiscovered stocks to share, please write them in comments.
Good luck!
1) Jinpan (JST) - Well, after breaking huge resistance at $30-$31 level, it never really looked back, and finally reached the level I expected it to reach - into the $40's. I'm no longer considering it undiscovered, as I belive it found a nice level to base. It may gain a little more, but the recent gain of almost 100% in just a few months make it a risky play for a short term in the volatile market conditions. Great stock, great company, great fundamentals, great business outlook, and finally a great run - Patience paid off. And as they say - move on to the next great thing!
2) Harbin Electric (HRBN) - is still one of the most undervalued stocks out there. So far, it is only 20% from the lows reached early April, but it has a lot more to gain. I've been saying before that $13's, $14's, $15's are the best prices to pick up HRBN, as with the growth it's about to experience, the share price will not stay that low for a long time.
Here is the interesting comparison. This is from the latest JINPAN (JST) release:
For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share
As you can see, JST anticipates to have $2.64 per share in 2008. HRBN is not there yet, but analysts expect to see similar numbers in 2009 with continuous huge growth in subsequent years. JST traded at $18-$28 levels for a while, until the latest earnings release. These are completely different sectors, but the fundamentals and growh is what I'm after. As I expected JST to trade in the $40's, I expect HRBN to trade even higher in 3 years.
Now, back to earth :). Let's talk short term. Today the company announced that the earnings will be released early Friday morning (EST time) with CC followed. This is the first time the company is hosting a conference call to discuss the earnings as I mentioned earlier. This is a great sign, as company is maturing. It would go a long way if the company provides guidance on this conference call.
We should definitely hear more about the acquisition they made recently and how it will increase the bottom line.
On another note, the Bejing Airport Express Train Station is complete, and HRBN built prototype motors for the cars that will be put on the track. They are planning to be a big player in this area. Read their latest presentation. Here is just the last paragraph from the Roth Conference back in 2007:
"We know it's the largest mass transport market in the world, and giving an illustration on this slide here, is the difference between the future needs and the existing supply of railcars for the passenger marketplace. We estimate that there is going to be a need for 5000 cars by the year 2020, which would translate to an addressable market size in excess of $5 billion"
Once again - very undervalued at these prices.
3) China North East Petroleum (CNEH.OB) - what a run! 2008 is shaping up to be a great year for this undervalued gem. It's already up 100% and who knows how far this can go. I'm not going to write a lot about the company here. Instead, I'll point to the latest seekingalpha article, that perhaps brought some serious attention from the investors, as indicated by the huge run it had in the past few days. This is a must read for those interested in this company: http://seekingalpha.com/article/75660-china-north-east-petroleum-strong-growth-clear-visibility?source=side_bar_long_ideas.
Earnings are expected next week. So, the short term movement, given the earnings and the latest run, could be very volatile. But, if they continue to deliver great earnings and show great profits, this could gain another 100% pretty quick.
4) Tongxin International (Former Asia Automotive) (still AAAC.OB) - not moving yet, but as with many gems, patience is needed. Very nice 2007 earnings reported recently. They were a little better than I expected. Stock is trading at roughly trailing PE of little over 10, and 2008 PE of less than 8.
1Q earnings are expected shortly along with anticipated Nasdaq listing. I know it has been a long wait, but once Nasdaq listing comes, stock should begin to appreciate significantly. There has been some movement in warrants above premium, which is good sign, as investors are betting on higher prices. Not going to write any more on this one today. We'll see how it develops in the next 2 weeks.
Now, there are 2 stocks of interest that I would like to share. I will write a separate post on these tonight or tomorrow. The stocks of interest are: AFAM and BSIC.OB.
If you have any interesting undiscovered stocks to share, please write them in comments.
Good luck!
Thursday, April 17, 2008
Updates on HRBN and AAAC
1) Harbin Electric (HRBN)
Here is the 6-month chart:
Notice the similarities in the chart pattern in November of 2007 and April of 2008.
That pattern brought the stock from $15 to over $22 on initial jump, followed by a larger move to $28. RSI is at the same level and going up. MACD remained in the positive territory and continues on the bullish trend. Last couple of days I began noticing a bid finally being supported with a decent size. I will continute to reiterate that $13-$15 level for HRBN will be laughable 12-24 months from today. Even for the short term, stock is becoming to look very attractive based on the chart alone.
On the company developments, I'm still waiting for an additional financial details on the acquisition they made - in terms of the financing and the dillution for the shareholders. On another note, we should see 1Q earnings next month, and the acquisition will be included in the earnings.
2) Asia Automotive Acquisition (AAAC.OB) - or what we should call it now: Tongxin International.
Well, the long wait is over. Honestly, it took a lot longer than I expected originally, but they finally came through with the merger. 85% of shareholders voted for the merger (80% was required), and thus no emergency buyout was needed, which helps, since the will need this cash to pay for the acquisition. I never expected stock to jump on the news of completing the merger, and the action today was exactly what I expected. As a reference, APWR (former CSCA) acted in the similar manner first few days after the merger, only to jump much higher later.
There are many catalysts ahead for the company: Nasdaq listing (which should come very quick, I believe), news of additional acquisition (as outlined in their presentation), PRs from the new company, and finally fantastic earnings showing what the company is all about. All these events will put this company on the radar and should gain market trust pretty quickly.
Another important thing - warrants. Calling warrants in brings cash to the company. They can call the warrants in when the common trades above $10 for 20 out of 30 consecutive days. Almost every company that went through this kind of merger (that I'm aware of) gets to call-in price. That is one of the reasons the stock will trade north of $10 in the short term.
Good luck to all!
Here is the 6-month chart:
Notice the similarities in the chart pattern in November of 2007 and April of 2008.
That pattern brought the stock from $15 to over $22 on initial jump, followed by a larger move to $28. RSI is at the same level and going up. MACD remained in the positive territory and continues on the bullish trend. Last couple of days I began noticing a bid finally being supported with a decent size. I will continute to reiterate that $13-$15 level for HRBN will be laughable 12-24 months from today. Even for the short term, stock is becoming to look very attractive based on the chart alone.
On the company developments, I'm still waiting for an additional financial details on the acquisition they made - in terms of the financing and the dillution for the shareholders. On another note, we should see 1Q earnings next month, and the acquisition will be included in the earnings.
2) Asia Automotive Acquisition (AAAC.OB) - or what we should call it now: Tongxin International.
Well, the long wait is over. Honestly, it took a lot longer than I expected originally, but they finally came through with the merger. 85% of shareholders voted for the merger (80% was required), and thus no emergency buyout was needed, which helps, since the will need this cash to pay for the acquisition. I never expected stock to jump on the news of completing the merger, and the action today was exactly what I expected. As a reference, APWR (former CSCA) acted in the similar manner first few days after the merger, only to jump much higher later.
There are many catalysts ahead for the company: Nasdaq listing (which should come very quick, I believe), news of additional acquisition (as outlined in their presentation), PRs from the new company, and finally fantastic earnings showing what the company is all about. All these events will put this company on the radar and should gain market trust pretty quickly.
Another important thing - warrants. Calling warrants in brings cash to the company. They can call the warrants in when the common trades above $10 for 20 out of 30 consecutive days. Almost every company that went through this kind of merger (that I'm aware of) gets to call-in price. That is one of the reasons the stock will trade north of $10 in the short term.
Good luck to all!
Wednesday, April 9, 2008
Updates
It has been 2 weeks since last update. Sorry about that. I don't have any new picks at the moment, although there is one I'm researching now and hopefully will provide some information on it within a few days. Now, few updates on the stocks mentioned here:
1) Jinpan - JST.
Ever since coming out with monster earnings few weeks ago, the stock has made a massive move upwards. $30-$31, as described earlier, was the wall for some time. It has tried this level many times and retreated every single time. This time the breakout happened on very nice volume. The stock made an impressive run all the way to $34's. It has obviously given up some for profit taking. How can you blame profit takers from $22's just few weeks ago. These low float / low volume chinese stocks are jumping back and forth on low volume and often depend on the mkt conditions. So, short term of these kinds of stocks are hard to predict, but as far as long term is concerned, JST has continued to deliver great results quarter after quarter. Their latest outlook was for $2.64 eps in 2008, and they always provide conservative numbers (as I've noticed in the past 2 years). Very impressive numbers. Again, short term is tough to predict (it may even slip to < $30), but within a year this stock will probably trade in $40's.
2) Harbin Electric - HRBN
The bullish MACD crossover happened in the low 13's and then the stock exploded. Few days ago they provided more details on their acquisition. It looked like the mkt liked the deal. That coupled with bullish chart brought the stock all the way to its resistance and near 200 dma almost to mid $17's. Profit taking was obvious at that point. Resistance is big, plus many people wanted to get out as they did not feel safe after buying too high. Stock has retreated back to $14's now. The chart is still in uptrend, and I believe it should start going back up to the resistance point. Next event that I'll be waiting for is more financial details on the deal. It seems that they will have to issue some shares to pay for the acquisition, which looks like a bad deal at the first look (dillutive). But, EPS is accretive, which means the contribution to the bottom line will be immediate.
Dutton Associates issued a new research note on HRBN today. They've been very accurate with this company in the past 2 years. Look at their update here -> http://www.duttonassociates.com/research/HRBN/index.html.
Also, Yahoo increased earnings estimates today, because it seems that another analyst, following HRBN, increased his estimates - Global Hunter Securities.
Just like with JST (Jinpan), long term of this company is extremely bright and I don't care much about short term movements. Near $3 eps in 2009 would definitely be an eye opener next year.
3) China North East Petroleum (CNEH.OB) - What can I say? Stock has been on a monster run ever since hitting the lows in $1.60's. Few days ago it broke a huge technical resistance at $2.60 and then briefly jumped to over $3.00. It's in consolidating mode right now and may retrace to $2.60 level. If the support holds (and I believe it will), the upward move will continue towards 1Q earnings next month. Big things are ahead for this company.
4) Jaguar Acquisition (JGAC.OB) - Don't have much to say, other than the merger has been approved and look at the action in warrants. What this means is get ready for some action in AAACW.OB:
5) Asia Automotive Acquisition (AAAC.OB / AAACW.OB) - The move in warrants today came due to success in JGAC merger. That merger makes AAAC.OB merger look almost guaranteed. (although I don't really want to use that word). Warrants are lagging, but only because possible merger is still 1 week away. I'm not looking for warrants to just catch up to common. I'm looking for much higher numbers here, once the stock begins trading on Nasdaq, which should occur immediately after acquisition (IF THE MERGER GOES THROUGH, AND PENDING NASDAQ APPROVAL). I really hope come next Friday, we'll have TXIC and TXICW on our hands (these are proposed Nasdaq tickers).
Good luck and stay safe in this market!
Please leave comments on any of these stocks or markets in general.
1) Jinpan - JST.
Ever since coming out with monster earnings few weeks ago, the stock has made a massive move upwards. $30-$31, as described earlier, was the wall for some time. It has tried this level many times and retreated every single time. This time the breakout happened on very nice volume. The stock made an impressive run all the way to $34's. It has obviously given up some for profit taking. How can you blame profit takers from $22's just few weeks ago. These low float / low volume chinese stocks are jumping back and forth on low volume and often depend on the mkt conditions. So, short term of these kinds of stocks are hard to predict, but as far as long term is concerned, JST has continued to deliver great results quarter after quarter. Their latest outlook was for $2.64 eps in 2008, and they always provide conservative numbers (as I've noticed in the past 2 years). Very impressive numbers. Again, short term is tough to predict (it may even slip to < $30), but within a year this stock will probably trade in $40's.
2) Harbin Electric - HRBN
The bullish MACD crossover happened in the low 13's and then the stock exploded. Few days ago they provided more details on their acquisition. It looked like the mkt liked the deal. That coupled with bullish chart brought the stock all the way to its resistance and near 200 dma almost to mid $17's. Profit taking was obvious at that point. Resistance is big, plus many people wanted to get out as they did not feel safe after buying too high. Stock has retreated back to $14's now. The chart is still in uptrend, and I believe it should start going back up to the resistance point. Next event that I'll be waiting for is more financial details on the deal. It seems that they will have to issue some shares to pay for the acquisition, which looks like a bad deal at the first look (dillutive). But, EPS is accretive, which means the contribution to the bottom line will be immediate.
Dutton Associates issued a new research note on HRBN today. They've been very accurate with this company in the past 2 years. Look at their update here -> http://www.duttonassociates.com/research/HRBN/index.html.
Also, Yahoo increased earnings estimates today, because it seems that another analyst, following HRBN, increased his estimates - Global Hunter Securities.
Just like with JST (Jinpan), long term of this company is extremely bright and I don't care much about short term movements. Near $3 eps in 2009 would definitely be an eye opener next year.
3) China North East Petroleum (CNEH.OB) - What can I say? Stock has been on a monster run ever since hitting the lows in $1.60's. Few days ago it broke a huge technical resistance at $2.60 and then briefly jumped to over $3.00. It's in consolidating mode right now and may retrace to $2.60 level. If the support holds (and I believe it will), the upward move will continue towards 1Q earnings next month. Big things are ahead for this company.
4) Jaguar Acquisition (JGAC.OB) - Don't have much to say, other than the merger has been approved and look at the action in warrants. What this means is get ready for some action in AAACW.OB:
5) Asia Automotive Acquisition (AAAC.OB / AAACW.OB) - The move in warrants today came due to success in JGAC merger. That merger makes AAAC.OB merger look almost guaranteed. (although I don't really want to use that word). Warrants are lagging, but only because possible merger is still 1 week away. I'm not looking for warrants to just catch up to common. I'm looking for much higher numbers here, once the stock begins trading on Nasdaq, which should occur immediately after acquisition (IF THE MERGER GOES THROUGH, AND PENDING NASDAQ APPROVAL). I really hope come next Friday, we'll have TXIC and TXICW on our hands (these are proposed Nasdaq tickers).
Good luck and stay safe in this market!
Please leave comments on any of these stocks or markets in general.
Thursday, March 27, 2008
Chart update and more
Update on HRBN chart ->
One more push to close to $15 level and the chart will look really pretty.
As you can see from this 1 month chart, MACD is about to turn positive, and the fast line is about to cross above signal line, which is called MACD crossover. This is a very bullish short term indicator. Stochastics still shows oversold, so we are good to go. If market doesn't crash, we should start seeing a nice uptrend developing. First stop would be the 200 dma, of course, around $17.65.
Update on CNEH.OB
In the past few days we witnessed a very strong bounce from the lows that were set in $1.60's. I believe this is in anticipation of earnings that will come out next week. We'll probably see some obvious profit taking. Who wouldn't mind booking 40% profits from just last week and getting out just before earnings?
But, if the earnings as good as most people expect, this stock will continue to appreciate throughout this year and beyond.
Update on JST
Last month I again mentioned this stock - JST (Jinpan). The stock got punished with the market, as it is a very low float stock, which doesn't usually have a strong volume.
Today the company reported incredible earnings, beating all estimates. The Y2007 net income was impressive $2.04. Even better was the business outlook for 2008, where they anticipate to make $2.64, and that is usually conservative, as they always beat their estimates.
Here is the paragraph from the release:
-- 4Q07 Revenue Increases 72% to $41.9 Million Compared to 4Q06 -
-- 4Q07 Net Income Increases 120% to $6.7 Million -
-- Full Year Revenue Increases 45% to $119.6 Million -
-- Full Year Net Income Increases 120% to $16.5 Million -
And on business outlook:
For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share.
One word - Incredible!
One more push to close to $15 level and the chart will look really pretty.
As you can see from this 1 month chart, MACD is about to turn positive, and the fast line is about to cross above signal line, which is called MACD crossover. This is a very bullish short term indicator. Stochastics still shows oversold, so we are good to go. If market doesn't crash, we should start seeing a nice uptrend developing. First stop would be the 200 dma, of course, around $17.65.
Update on CNEH.OB
In the past few days we witnessed a very strong bounce from the lows that were set in $1.60's. I believe this is in anticipation of earnings that will come out next week. We'll probably see some obvious profit taking. Who wouldn't mind booking 40% profits from just last week and getting out just before earnings?
But, if the earnings as good as most people expect, this stock will continue to appreciate throughout this year and beyond.
Update on JST
Last month I again mentioned this stock - JST (Jinpan). The stock got punished with the market, as it is a very low float stock, which doesn't usually have a strong volume.
Today the company reported incredible earnings, beating all estimates. The Y2007 net income was impressive $2.04. Even better was the business outlook for 2008, where they anticipate to make $2.64, and that is usually conservative, as they always beat their estimates.
Here is the paragraph from the release:
-- 4Q07 Revenue Increases 72% to $41.9 Million Compared to 4Q06 -
-- 4Q07 Net Income Increases 120% to $6.7 Million -
-- Full Year Revenue Increases 45% to $119.6 Million -
-- Full Year Net Income Increases 120% to $16.5 Million -
And on business outlook:
For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share.
One word - Incredible!
Monday, March 24, 2008
Table Pounder
This is something new from me. I don't like doing that, but I must say the following:
Harbin Electric (HRBN) is an absolute table pounder at these low prices, if you are looking at the long term.
Stock has retraced to just below $14 today and turned around to close higher. Yes, the whole market jumped today, and one might argue whether we've seen the bottom for HRBN. Looking at the charts, I would have to say we did.
Take a look at this 2 year chart:
You can see the line of support from the lows developed due to retrace in March of 2007, August 2007, and now.
In the next few days, I'm expecting a detailed update from Dutton Associates, who has been very accurate in the past reports on HRBN. Also, as far as I know, the company is planning to begin making the conference calls starting with their 1Q results, which should come in May.
Once the market returns to normal, where fundamentals do matter, investors will find the great value in this company. $13,$14,$15 will look like a joke in 2-3 years.
Other updates:
Still waiting on Asia Automotive Acquisition (AAAC.OB / AAACW.OB)... Less than a month remains here. Few days ago they filed another amended registration statement, reflecting the change in the Record Date.
Earnings are almost here in China North East Petroleum (CNEH.OB). Should be released on or around April 1st (and it should not be a joke) :)
There were news of investor conference, where CNEH is going to be participating.
Hopefull, we'll here about the status of Nasdaq/AMEX application soon.
Harbin Electric (HRBN) is an absolute table pounder at these low prices, if you are looking at the long term.
Stock has retraced to just below $14 today and turned around to close higher. Yes, the whole market jumped today, and one might argue whether we've seen the bottom for HRBN. Looking at the charts, I would have to say we did.
Take a look at this 2 year chart:
You can see the line of support from the lows developed due to retrace in March of 2007, August 2007, and now.
In the next few days, I'm expecting a detailed update from Dutton Associates, who has been very accurate in the past reports on HRBN. Also, as far as I know, the company is planning to begin making the conference calls starting with their 1Q results, which should come in May.
Once the market returns to normal, where fundamentals do matter, investors will find the great value in this company. $13,$14,$15 will look like a joke in 2-3 years.
Other updates:
Still waiting on Asia Automotive Acquisition (AAAC.OB / AAACW.OB)... Less than a month remains here. Few days ago they filed another amended registration statement, reflecting the change in the Record Date.
Earnings are almost here in China North East Petroleum (CNEH.OB). Should be released on or around April 1st (and it should not be a joke) :)
There were news of investor conference, where CNEH is going to be participating.
Hopefull, we'll here about the status of Nasdaq/AMEX application soon.
Tuesday, March 11, 2008
Update on Harbin Electric (HRBN)
Here is the beaten down stock. The stock is roughly 40% off its highs reached 2 months ago. Market conditions have been bad. The stock broke out to the downside from its trading range of $21-$24, as explained earlier. That followed breaking 200 dma to the downside as well - bad technical sign. Low float stocks always get punished in market weakness. Coupled with that was an uncertainty over earnings, but the company delivered again!
Yesterday after hours the company released its 10k, and today it released very detailed PR highlighting the financials and providing a business outlook.
One analyst has been right on the money constantly with this company - Dutton Associates. They've given pretty accurate forecast, and they continue to believe in the long term of this company.
No need for me to copy all the highlights from the PR. I'll just mention a few, which caught my attention and will comment on them in red.
Finally, just want to add that they forecast their revenues to reach over $350 million in 2010. The outlook is still very good. If anybody expected bad earnings, they sure were wrong. The company posted the numbers for the most part in line with the analyst expectations. The stock may not take off right away, as it will struggle with resistance points now, plus the market is still not out of the woods, but the long term for this company is very bright. It continues to deliver on
consistent basis, and whenever the fundamentals become crucial in the market again, the stock will find its value much higher from the current levels.
Yesterday after hours the company released its 10k, and today it released very detailed PR highlighting the financials and providing a business outlook.
One analyst has been right on the money constantly with this company - Dutton Associates. They've given pretty accurate forecast, and they continue to believe in the long term of this company.
No need for me to copy all the highlights from the PR. I'll just mention a few, which caught my attention and will comment on them in red.
- Revenues from the acquired automobile specialty micro-motors business contributed approximately $10.5 million to total revenues, representing 42% of the total revenue growth. Dutton Associates have forecasted the revenues from this business to reach $10.0 million. This is going to be a major revenue driver moving forward, and it has had a very nice growth already.
- The remaining 58% of total revenue growth came from increased purchases by existing customers of linear motor, armature and micro-motor products, and the new Tower Type Oil Pump which was launched in early 2007. This is another important revenue driver. The Company delivered only 13 units of the Tower Type Oil Pump in 2007, but is planning to deliver more than 200 units in 2008. That's huge
- We are continuing the joint development of the linear motor driven train system for urban mass transportation with the Institute of Electrical Engineering of the Chinese Academy of Sciences (''IEECAS'') and expect that this product could begin to contribute to our business in 2009, assuming a successful test run at the end of 2008. Will be interesting to see how this works out in the long term
- Our proprietary technology and product development capability helped gross profit margin increase to 49.6% in 2007, in our view, a remarkable achievement given that gross margin very rarely exceeds 45% in our industry. This truly is a remarkable achievment having consistent growth margins so high.
- The Company's products that were sold directly to markets outside China increased to 12.4% of total sales in 2007 from 3.1% in 2006, reflecting the rapid growth of the Company's international business. Another revenue growth driver. This is important, as the company is beginning to sell their products outside of China, particularly in US.
Finally, just want to add that they forecast their revenues to reach over $350 million in 2010. The outlook is still very good. If anybody expected bad earnings, they sure were wrong. The company posted the numbers for the most part in line with the analyst expectations. The stock may not take off right away, as it will struggle with resistance points now, plus the market is still not out of the woods, but the long term for this company is very bright. It continues to deliver on
consistent basis, and whenever the fundamentals become crucial in the market again, the stock will find its value much higher from the current levels.
Update on Asia Automotive Acquisition (AAAC.OB)
The stock has been taking a big hit lately. It's understandable - there is just over a month remaining to close the merger, and it has been a while since they filed an amended registration statement with the date of shareholder meeting.
It's not very clear why the the common (AAAC.OB) is taking a hit, as it's now trading below cash available in trust account. That's just irrational trading to me.
Warrants is different story. Since the warrants would expire worthless in case of no-deal, the risk in warrants increases dramatically; therefore, the warrants take a bigger hit. But judging by relatively low volume in both, it seems that there are just a few panic sellers.
Now, to the good news - the S-4 registration has been filed today after market close. And everything looks good for the meeting on April 4th, which gives them plenty of time before the deadline of April 19th.
Here is the link to filing:
http://sec.gov/Archives/edgar/data/1332552/000095012408001164/k22454a6sv4za.txt
One final thing remains - the actual voting, which should not be an issue (but keep in mind, there is always a risk in any investment). After voting takes place (on April 4th, assuming no additional changes), the merger should be complete within 2-3 days after that.
It's not very clear why the the common (AAAC.OB) is taking a hit, as it's now trading below cash available in trust account. That's just irrational trading to me.
Warrants is different story. Since the warrants would expire worthless in case of no-deal, the risk in warrants increases dramatically; therefore, the warrants take a bigger hit. But judging by relatively low volume in both, it seems that there are just a few panic sellers.
Now, to the good news - the S-4 registration has been filed today after market close. And everything looks good for the meeting on April 4th, which gives them plenty of time before the deadline of April 19th.
Here is the link to filing:
http://sec.gov/Archives/edgar/data/1332552/000095012408001164/k22454a6sv4za.txt
One final thing remains - the actual voting, which should not be an issue (but keep in mind, there is always a risk in any investment). After voting takes place (on April 4th, assuming no additional changes), the merger should be complete within 2-3 days after that.
Monday, March 3, 2008
Another update on favorite stocks
First update is on China North East Petroleum (CNEH.OB) ->
As mentioned earlier, financing was expected to be announced shortly. And finally, today, the long awaited financing deal has been announced. This has been a major uncertainty for this stock for a few months. Many have expected this to be a toxic financing or a financing with major dillution to the shareholders. It actually turned to be very attractive deal both for the lender and the company.
You can read the PR here -> http://biz.yahoo.com/prnews/080303/cnm030.html?.v=12. Few highlights from the PR that made it look even more attractive:
Once again, this was a major uncertainty with the company, that kept the price very low, while oil has been reaching new highs. Now, the company is in position to execute its plans, and I believe the stock could appreciate over 100% within a year or less. Long term projections are even higher.
Second update is on Asia Automotive Acquisition Inc. (AAAC.OB) ->
As expected, the company extended the Equity Acquisition Agreement all the way to April 30th, but in reality April 19th is the deadline to complete the acquisition. Jeff Feinberg just disclosed having 24%+ of O/S, which is 4% higher than he had disclosed previously. As mentioned earlier, he continues to buy the stock.
Third update is on Harbin Electric (HRBN) ->
Rough times in the market usually mean rough times for low float, low volume stocks, as they can be easily manipulated. Notice my last note on HRBN: "Stocks with low float like this can react violent in both directions :), especially if market conditions match; therefore, if you are in for the short term - proceed with caution". Well, HRBN always suffers a lot during rough times like DOW -300 last Friday. We broke through $21-$24 range to the downside, and it may take some time to recover. With earnings coming up within a few days or a week, most will be careful and would not risk entering a position here. Long term, it is still a very good investment, and nothing has changed in its long term outlook.
Good luck out there.
As mentioned earlier, financing was expected to be announced shortly. And finally, today, the long awaited financing deal has been announced. This has been a major uncertainty for this stock for a few months. Many have expected this to be a toxic financing or a financing with major dillution to the shareholders. It actually turned to be very attractive deal both for the lender and the company.
You can read the PR here -> http://biz.yahoo.com/prnews/080303/cnm030.html?.v=12. Few highlights from the PR that made it look even more attractive:
- Majority of Proceeds to be Used to Drill 100 New Wells in 2008
- The average price of the three tranches of warrants is US$2.51 and represents a 17% premium to the closing price on February 27, 2008
- Of the 4.8 million warrants, 1.5 million are callable at the option of the Company if after one year the stock price is trading at or above US$4.80 which is 150% of the strike price of $3.20, assuming certain liquidity criteria are also met.
- And one of the most important: In connection with this financing, the Company is required to obtain a listing on a U.S. exchange within one year.
Once again, this was a major uncertainty with the company, that kept the price very low, while oil has been reaching new highs. Now, the company is in position to execute its plans, and I believe the stock could appreciate over 100% within a year or less. Long term projections are even higher.
Second update is on Asia Automotive Acquisition Inc. (AAAC.OB) ->
As expected, the company extended the Equity Acquisition Agreement all the way to April 30th, but in reality April 19th is the deadline to complete the acquisition. Jeff Feinberg just disclosed having 24%+ of O/S, which is 4% higher than he had disclosed previously. As mentioned earlier, he continues to buy the stock.
Third update is on Harbin Electric (HRBN) ->
Rough times in the market usually mean rough times for low float, low volume stocks, as they can be easily manipulated. Notice my last note on HRBN: "Stocks with low float like this can react violent in both directions :), especially if market conditions match; therefore, if you are in for the short term - proceed with caution". Well, HRBN always suffers a lot during rough times like DOW -300 last Friday. We broke through $21-$24 range to the downside, and it may take some time to recover. With earnings coming up within a few days or a week, most will be careful and would not risk entering a position here. Long term, it is still a very good investment, and nothing has changed in its long term outlook.
Good luck out there.
Tuesday, February 26, 2008
Stocks to watch
I've only briefly mentioned Jinpan (JST) here a few times, although I really like the company and has been trading in and out of this stock for over 2 years. I decided to mention it here, as it's reaching important resistance levels. The volume has increased lately and the stock is approaching all time highs. Unfortunately, $30-$31 has been a road block for JST on numerous occasions, and the stock also likes to move in direction of the market. I would suggest to watch this level closely, as break above $31 would indicate a major breakout on the way. At the same time, monitor market conditions closely - It can go down $2 on very few shares in the down day on the market.
Another one to watch is China North East Petroleum (CNEH.OB) - expected to report record quarter in a few weeks with very nice revenues and profits. Production levels have already been preannounced. The stock has been trading in pretty tight range for some time now. I believe the stock has a good potential to appreciate significantly in 2008 and beyond, especially with oil trading at $100+. Financing is also expected shortly, which should assure that the company has enough money going forward for operations.
Next one on my list is China Grentech (GRRF). In the past few months it reported number of big contract wins in the Chinese wireless sector. Now look at the earnings reported by China Techfaith Wireless Communication Technology (CNTF) today. GRRF is expected to report earnings in couple of weeks (around March 12th). The stock has been trading sideways lately and has a great potential to appreciate from the current levels.
Finally, I have to mention AAAC.OB one more time, as the big blocks continue, and as reported in SEC filings today, Jeff Feinberg and his funds now have roughly 195k more shares than was reported 2 months ago in December. Buying continues, as we wait for the merger to finalize. I think we should see extention of Equity Agreement within a few days, as it seems like the deal will not be made by February 29th. Patience is needed here.
Good luck to all.
Another one to watch is China North East Petroleum (CNEH.OB) - expected to report record quarter in a few weeks with very nice revenues and profits. Production levels have already been preannounced. The stock has been trading in pretty tight range for some time now. I believe the stock has a good potential to appreciate significantly in 2008 and beyond, especially with oil trading at $100+. Financing is also expected shortly, which should assure that the company has enough money going forward for operations.
Next one on my list is China Grentech (GRRF). In the past few months it reported number of big contract wins in the Chinese wireless sector. Now look at the earnings reported by China Techfaith Wireless Communication Technology (CNTF) today. GRRF is expected to report earnings in couple of weeks (around March 12th). The stock has been trading sideways lately and has a great potential to appreciate from the current levels.
Finally, I have to mention AAAC.OB one more time, as the big blocks continue, and as reported in SEC filings today, Jeff Feinberg and his funds now have roughly 195k more shares than was reported 2 months ago in December. Buying continues, as we wait for the merger to finalize. I think we should see extention of Equity Agreement within a few days, as it seems like the deal will not be made by February 29th. Patience is needed here.
Good luck to all.
Friday, February 22, 2008
Few updates on stocks
First of all- my favorite stock of 2008 - Asia Automotive Acquisition (AAAC.OB)
Asia Automotive Acquisition, Inc. had an excellent presentation at Roth Capital OC Growth Conference 2 days ago. Listen to it and watch the presentation from here: http://www.wsw.com/webcast/roth16/aaac/
Today, we had biggest volume in the past 4 months - over 400k. Most volume was created by very large blocks. It'll be interesting to see if another investor took a position. Hopefully we'll see filing on this soon.
Also, 2 days ago, they announced guidance for Tongxin International in 2008, and it is impressive. Here is the highlight of the PR: "Earnings guidance is expected to reach $15M. TXI anticipates the Chinese light and commercial vehicle market will continue to grow between 25% and 30% and it will complete an add on acquisition by the end of 2008". In 2007 they will have earnings around $9.5 mil, so this means earnings growth from 2007 to 2008 is 57% (excluding one-time costs associated with acquisition). This is based on 15.3 mil dilluted shares, which puts the earnings close to $1 per share -> roughly PE of 8 at the current price based on 2008 earnings, very impressive growth and additional profitable acquisitions? Can you say - undervalued?
Now on to another undervalued stock -> Harbin Electric (HRBN).
I had to come back to talking about it, as lately the volume on it has been pretty low again, but it has stabilized nicely above $21 and trading in range $21-$24 for some time. Again, just like AAAC.OB, Harbin Electric had a very nice presentation at Roth Capital conference. Here is the link to it: http://www.wsw.com/webcast/roth16/hrbn/
Reiterating revenue forecast of 350 mil in 2010 from just 60's in 2007. Yes, it already tripled from last year, but the next HRBN is HRBN itself. I would not be surprised if we see another triple in 2-3 years. Projected net income of over $3.20 in 2009 is very impressive.
Earnings are expected in 2 weeks. Stocks with low float like this can react violent in both directions :), especially if market conditions match; therefore, if you are in for the short term - proceed with caution. For long term - I don't think there is much to worry about (at this point). Company has been delivering on the promises for some time now.
More updates coming....
Asia Automotive Acquisition, Inc. had an excellent presentation at Roth Capital OC Growth Conference 2 days ago. Listen to it and watch the presentation from here: http://www.wsw.com/webcast/roth16/aaac/
Today, we had biggest volume in the past 4 months - over 400k. Most volume was created by very large blocks. It'll be interesting to see if another investor took a position. Hopefully we'll see filing on this soon.
Also, 2 days ago, they announced guidance for Tongxin International in 2008, and it is impressive. Here is the highlight of the PR: "Earnings guidance is expected to reach $15M. TXI anticipates the Chinese light and commercial vehicle market will continue to grow between 25% and 30% and it will complete an add on acquisition by the end of 2008". In 2007 they will have earnings around $9.5 mil, so this means earnings growth from 2007 to 2008 is 57% (excluding one-time costs associated with acquisition). This is based on 15.3 mil dilluted shares, which puts the earnings close to $1 per share -> roughly PE of 8 at the current price based on 2008 earnings, very impressive growth and additional profitable acquisitions? Can you say - undervalued?
Now on to another undervalued stock -> Harbin Electric (HRBN).
I had to come back to talking about it, as lately the volume on it has been pretty low again, but it has stabilized nicely above $21 and trading in range $21-$24 for some time. Again, just like AAAC.OB, Harbin Electric had a very nice presentation at Roth Capital conference. Here is the link to it: http://www.wsw.com/webcast/roth16/hrbn/
Reiterating revenue forecast of 350 mil in 2010 from just 60's in 2007. Yes, it already tripled from last year, but the next HRBN is HRBN itself. I would not be surprised if we see another triple in 2-3 years. Projected net income of over $3.20 in 2009 is very impressive.
Earnings are expected in 2 weeks. Stocks with low float like this can react violent in both directions :), especially if market conditions match; therefore, if you are in for the short term - proceed with caution. For long term - I don't think there is much to worry about (at this point). Company has been delivering on the promises for some time now.
More updates coming....
Tuesday, February 19, 2008
Update on Asia Automotive Acquisition (AAAC.OB)
Asia Automotive Acquisition Inc. is presenting tomorrow at Roth Capital 20th annual OC Growth Stock Conference. Live web cast and powerpoint presentation will be available here:
http://www.wsw.com/webcast/roth16/aaac at 5:30 pm EST.
There is also going to be a Special Panel session on Blank Check Companies (SPAC's) that have announced an agreement to acquire an entity, but not closed as well as selected Blank Check company presentations.
Judging by the volume and activity today, there is an interest in the company now.
http://www.wsw.com/webcast/roth16/aaac at 5:30 pm EST.
There is also going to be a Special Panel session on Blank Check Companies (SPAC's) that have announced an agreement to acquire an entity, but not closed as well as selected Blank Check company presentations.
Judging by the volume and activity today, there is an interest in the company now.
Wednesday, February 6, 2008
Update on Asia Automotive Acquisition (AAAC.OB)
There was a new filing with SEC yesterday extending Equity Acquisition Agreement expration from Feb.6th to Feb 29th. That makes me believe even more that the merger will be complete this month.
Monday, February 4, 2008
New undiscovered company - China Wind Systems (CWSI.OB)
Here is another interesting company and completely unknown (in my opinion):
China Wind Systems (CWSI.OB)
Wind Energy sector in China is hot. Here is the unknown company that makes components for wind systems...
It just made a reverse merger, and here is what it is now:
China Wind Systems, through its affiliates, Huayang Dye Machine and Huayang Electrical Power Equipment, manufactures and sells industrial equipment for use in the textile and energy related industries in China. Since August 2007, the Company has shifted its strategy to focus on the growing wind energy industry in China, and has begun to supply high precision rolled rings to companies in the wind power energy industry.
Check out this presentation on their web site:
http://www.chinawindsystems.cn/en/ChinaWind-%20web%5B1%5D.ppt
Read more on this company here:
http://sec.gov/Archives/edgar/data/819926/000114420408005833/v101418_8ka.htm
Few highlights:
Check out the latest PR from few weeks ago:
http://biz.yahoo.com/prnews/080116/cnw025.html?.v=10
WUXI, China, Jan. 16 /Xinhua-PRNewswire-FirstCall/ -- China Wind Systems, Inc. (OTC Bulletin Board: CWSI - News; ''China Wind Systems'' or the ''Company''), which through its wholly owned subsidiaries manufactures and sells industrial machines for use in the textile and energy related industries in the People's Republic of China, today announced that it has purchased new equipment to expand its forged rolled rings manufacturing capabilities. The $4.13 million purchase was in line with the Company's strategy to focus on the growing wind power industry in China, and was largely funded with the proceeds from its recent private placement financing.
The purchase marks the first step in execution of the Company's expansion plan. In the initial phase, China Wind Systems will focus on producing rolled rings that measure up to 6 meters in diameter as well as other windmill components such as shafts. China Wind Systems plans to purchase additional equipment during phases two and three of its expansion. In phase two, the Company intends to manufacture yaw bearings and gear boxes. In phase three, the Company will manufacture other windmill components such as rotor blades. At the conclusion of its expansion, China Wind Systems will be capable of producing forged rolled-rings, measuring up to 8 meters in diameter and weighing up to 150 tons to suit different applications and processes in the wind power industry.
Recently, China Wind Systems purchased a 4,500-ton hydraulic press for use in its metal forging process to produce shafts that weigh up to 18 tons, used in 2 MW wind turbine units. The Company also acquired a ring rolling mill capable of producing rolled rings measuring up to 6 meters in diameter and weighing up to 12 tons. The equipment will be installed at its new 107,639 square foot facility in Wuxi, Jiangsu Province and the Company expects to start production at the new facility by September 2008. China Wind Systems will utilize the axial closed-die rolling technology in its forging process. The new technology will reduce material waste during the forging process by approximately 35%, ensure high precision and surface flatness, and produce rolled rings with excellent mechanical strength and high flexibility.
''Demand for rolled rings is strong, particularly for larger rolled rings used in the wind power industry. With the addition of our new equipment, we will expand our production capabilities to produce precision rolled rings that measure approximately 6 meters in diameter and shafts that weigh approximately 18 tons,'' said Mr. Jianhua Wu, Chairman and CEO of China Wind Systems. ''We expect the rolled rings segment of our business to increase significantly in 2008, growing from only 8% of revenue in 2007. Once the utilization rate for the equipment reaches 100 percent, we expect to see significant improvement in our overall profitability,'' added Mr. Jianhua Wu.
They are also presenting in this conference:
http://cleanenergynews.blogspot.com/2008/02/third-annual-piper-jaffray-clean.html
Piper Jaffray Conference - Feb 28
as well as Roth Capital conference later this month
China Wind Systems (CWSI.OB)
Wind Energy sector in China is hot. Here is the unknown company that makes components for wind systems...
It just made a reverse merger, and here is what it is now:
China Wind Systems, through its affiliates, Huayang Dye Machine and Huayang Electrical Power Equipment, manufactures and sells industrial equipment for use in the textile and energy related industries in China. Since August 2007, the Company has shifted its strategy to focus on the growing wind energy industry in China, and has begun to supply high precision rolled rings to companies in the wind power energy industry.
Check out this presentation on their web site:
http://www.chinawindsystems.cn/en/ChinaWind-%20web%5B1%5D.ppt
Read more on this company here:
http://sec.gov/Archives/edgar/data/819926/000114420408005833/v101418_8ka.htm
Few highlights:
- 9 months of 2006 revenues of the new company: 12.3 mil
- 9 months of 2007 revenues: 16.5 mil
- 2006 net income: 1.8 mil (operating income 2.7 mil)
- 2007 net income: 9.4 mil (operating income 3.9 mil)
- Total O/S - 36 mil (earnings are already .26 cents for 9 months of 2007)
float should be tiny...no more than 2 mil, if I got my numbers correct.... - Trading at the CURRENT PE of less than 7.
Check out the latest PR from few weeks ago:
http://biz.yahoo.com/prnews/080116/cnw025.html?.v=10
WUXI, China, Jan. 16 /Xinhua-PRNewswire-FirstCall/ -- China Wind Systems, Inc. (OTC Bulletin Board: CWSI - News; ''China Wind Systems'' or the ''Company''), which through its wholly owned subsidiaries manufactures and sells industrial machines for use in the textile and energy related industries in the People's Republic of China, today announced that it has purchased new equipment to expand its forged rolled rings manufacturing capabilities. The $4.13 million purchase was in line with the Company's strategy to focus on the growing wind power industry in China, and was largely funded with the proceeds from its recent private placement financing.
The purchase marks the first step in execution of the Company's expansion plan. In the initial phase, China Wind Systems will focus on producing rolled rings that measure up to 6 meters in diameter as well as other windmill components such as shafts. China Wind Systems plans to purchase additional equipment during phases two and three of its expansion. In phase two, the Company intends to manufacture yaw bearings and gear boxes. In phase three, the Company will manufacture other windmill components such as rotor blades. At the conclusion of its expansion, China Wind Systems will be capable of producing forged rolled-rings, measuring up to 8 meters in diameter and weighing up to 150 tons to suit different applications and processes in the wind power industry.
Recently, China Wind Systems purchased a 4,500-ton hydraulic press for use in its metal forging process to produce shafts that weigh up to 18 tons, used in 2 MW wind turbine units. The Company also acquired a ring rolling mill capable of producing rolled rings measuring up to 6 meters in diameter and weighing up to 12 tons. The equipment will be installed at its new 107,639 square foot facility in Wuxi, Jiangsu Province and the Company expects to start production at the new facility by September 2008. China Wind Systems will utilize the axial closed-die rolling technology in its forging process. The new technology will reduce material waste during the forging process by approximately 35%, ensure high precision and surface flatness, and produce rolled rings with excellent mechanical strength and high flexibility.
''Demand for rolled rings is strong, particularly for larger rolled rings used in the wind power industry. With the addition of our new equipment, we will expand our production capabilities to produce precision rolled rings that measure approximately 6 meters in diameter and shafts that weigh approximately 18 tons,'' said Mr. Jianhua Wu, Chairman and CEO of China Wind Systems. ''We expect the rolled rings segment of our business to increase significantly in 2008, growing from only 8% of revenue in 2007. Once the utilization rate for the equipment reaches 100 percent, we expect to see significant improvement in our overall profitability,'' added Mr. Jianhua Wu.
They are also presenting in this conference:
http://cleanenergynews.blogspot.com/2008/02/third-annual-piper-jaffray-clean.html
Piper Jaffray Conference - Feb 28
as well as Roth Capital conference later this month
Sunday, February 3, 2008
Few updates on Asia Automotive Acquisition (AAAC.OB)
Again, sorry for the lack of updates.
Merger on Asia Automotive Acquisition (AAAC.OB) is getting closer. The proxy was out few days ago, showing February as a month to hold the shareholder meeting to approve the merger. I expect the stock to trade on Nasdaq almost immediately after the final voting. After that, we might see a PR machine similar to another Chardan blank check company that completed its merger (CSCA.OB, which is now APWR). Keep in mind there are at least 4 aquisitions coming, which bring a big portion to net income.
I kept mentioning CSCA.OB (Chardan South) throughout the year, putting it on the same page in terms of potential as YTEC (Yucheng Technologies). If you recall, Yucheng Technologies (CUAQ.OB -> YTEC) went from 7$'s to $15+... We now have CSCA.OB -> APWR to go from $7's to $15+. I expect AAAC.OB to do the same once the merger is complete and it begins trading on Nasdaq. Even though the strike on the warrants is $5, they (AAACW.OB) usually tend to trade lower than that, because of the risks involved in the merger. Once the merger goes through, they will maintain $5 difference between the common, because after the merger, they can be exercised at any time.
Besides great management, strong growth and acquisitions, Asia Automotive Acquisition (AAAC.OB) also has same investors that were on successful companies, such
as Yucheng Technologies (YTEC) and A-POWER (APWR, former CSCA.OB): Jeff Feinberg, who owns 20% of AAAC.OB (he owned over 40% of CSCA.OB).
Once the merger is complete, we will have a company with only 12 mil O/S, roughly 2 mil in float, 66 mil income in 9 months of 2007 alone, and net income of 8.8 mil in 9 months of 2007. It's not hard to figure how undervalued this company is.
Comparing it to the competition, the board currently values the stock at $20's
Good Luck.
Merger on Asia Automotive Acquisition (AAAC.OB) is getting closer. The proxy was out few days ago, showing February as a month to hold the shareholder meeting to approve the merger. I expect the stock to trade on Nasdaq almost immediately after the final voting. After that, we might see a PR machine similar to another Chardan blank check company that completed its merger (CSCA.OB, which is now APWR). Keep in mind there are at least 4 aquisitions coming, which bring a big portion to net income.
I kept mentioning CSCA.OB (Chardan South) throughout the year, putting it on the same page in terms of potential as YTEC (Yucheng Technologies). If you recall, Yucheng Technologies (CUAQ.OB -> YTEC) went from 7$'s to $15+... We now have CSCA.OB -> APWR to go from $7's to $15+. I expect AAAC.OB to do the same once the merger is complete and it begins trading on Nasdaq. Even though the strike on the warrants is $5, they (AAACW.OB) usually tend to trade lower than that, because of the risks involved in the merger. Once the merger goes through, they will maintain $5 difference between the common, because after the merger, they can be exercised at any time.
Besides great management, strong growth and acquisitions, Asia Automotive Acquisition (AAAC.OB) also has same investors that were on successful companies, such
as Yucheng Technologies (YTEC) and A-POWER (APWR, former CSCA.OB): Jeff Feinberg, who owns 20% of AAAC.OB (he owned over 40% of CSCA.OB).
Once the merger is complete, we will have a company with only 12 mil O/S, roughly 2 mil in float, 66 mil income in 9 months of 2007 alone, and net income of 8.8 mil in 9 months of 2007. It's not hard to figure how undervalued this company is.
Comparing it to the competition, the board currently values the stock at $20's
Good Luck.
Wednesday, January 9, 2008
Update on Asia Automotive Acquisition Corp (AAAC.OB)
Sorry for the lack of updates. I've been on long vacation and was taking a little time off the market.
Looks like our wait on AAAC.OB might be over soon.
Great news - New filing yesterday:
http://www.sec.gov/Archives/edgar/data/1332552/000095012408000065/k22454a3sv4za.txt
Highlights:
Make sure to weigh your risks associated with the merger. Good luck to All!
P.S. Note on Harbin Electric (HRBN) - The stock reached $28.00 few days before a big pullback, making it an official 250% gainer in 12 months since the original recommendation at $8 in January. I'm now considering dropping it from the list of undiscovered stocks, as it is "on the charts" now. I will probably provide one last update on it shortly.
Looks like our wait on AAAC.OB might be over soon.
Great news - New filing yesterday:
http://www.sec.gov/Archives/edgar/data/1332552/000095012408000065/k22454a3sv4za.txt
Highlights:
- The board of directors of Asia Automotive Acquisition Corporation ("AAAC")
and its wholly-owned subsidiary, Tongxin International Ltd. ("TXI") have
unanimously approved the acquisition of the shares of Hunan Tongxin Enterprise
Co, Ltd. ("Hunan Tongxin") in the People's Republic of China, pursuant to a
Equity Acquisition Agreement whereby AAAC will purchase all of the outstanding
shares of common stock of Hunan Tongxin held by the stockholders (the "Hunan
Tongxin Stockholders"). The board of directors of AAAC also has unanimously
approved the simultaneous reincorporation of AAAC from the State of Delaware to
the British Virgin Islands, through a redomestication merger with TXI. - The date for the special meeting of shareholders related to proposed merger has been set for January 24th, 2008. Proxy is being mailed to all shareholders now.
- AAAC's common stock, warrants and units are currently listed on the
Over-the-Counter Bulletin Board under the symbols AAAC, AAACW and AAACU,
respectively. TXI has applied to have its securities listed on the Nasdaq Global
Market effective at the time of the redomestication merger. The proposed
symbols are TXIC, TXICW and TXICU.
Make sure to weigh your risks associated with the merger. Good luck to All!
P.S. Note on Harbin Electric (HRBN) - The stock reached $28.00 few days before a big pullback, making it an official 250% gainer in 12 months since the original recommendation at $8 in January. I'm now considering dropping it from the list of undiscovered stocks, as it is "on the charts" now. I will probably provide one last update on it shortly.
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