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.

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!

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.

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.

Quick update on AAAC.OB

Very nice presentation today at Brean Murray Conference:

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!

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:

• 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!

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....

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!

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!

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.

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!

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.

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.

• 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.

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:

• 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.