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!