http://seekingalpha.com/article/195915-top-50-companies-of-2010-part-1?source=yahoo
You'll see several of my favorites in this article ... definitely worth a quick read, but it breaks down most of the fundamentals that I've covered a while back.
Top 50 Companies of 2010 (Part 1)
by: Zack Buckley March 28, 2010 | about: BSPM.OB / CHBT / CHGY.OB / CSGH.OB / DJSP / EAR / JADA.OB / LPIH.OB / SKBI Zack Buckley 1
After researching over 5000 companies, I have come up with 50 stocks that I believe to be the most undervalued companies in the world. While I do not know where they will be going in the next year, as I cannot predict the market in the next six months, I believe in the next 5 years investors will be very rewarded by purchasing these companies.
The purpose of this series is not to go into great depth in the greatest opportunities in the world, but to cover enough to prove that listening to me in the future is worth your time. I will guarantee we’ve done much more research than my cursory summaries show. I am so emphatic about the prospects for these companies that I am going to China this summer for 3 months to visit these companies. I have created a tier system for the companies. While I think they are all great buys, the articles are tiered beginning with my favorite companies in the first article and progressively less attractive but still very undervalued companies in later articles.
My first company is HearUSA (EAR), a potential buyout candidate. It is only an 80 million dollar company, yet Siemens (SI) has 600 million euros to purchase a company and cannot purchase any company that competes with EAR. You do the math. EAR is also expanding their business across the US.
Another US company is DJSP Enterprises (DJSP), my last US company for the top 50. They service foreclosures in Florida and are expanding their business across the US. As we all know, foreclosures are sky high in Florida and high across the US. The P/E is 5 and they are expanding rapidly.
China Sun Group High Tech Company (CSGH.OB) is a battery manufacturer in China with three main products: cobalt carbonate, cobaltosic oxide and lithium cobalt oxide, used in the production of lithium-ion batteries with a P/E of 8.33. For FY2008, CSGH saw revenue growth of 46% and net income growth of 27%.
Biopharm Asia is trading at a P/E of 4 and expanding quickly, with 22% revenue growth in 2008. BFAR has its own line of Chinese traditional medicines, and is also a distributor of pharmaceuticals. BFAR should now only be purchased by investors who understand the implications of the CFO resigning and that this is either a great opportunity or a great problem, and that I know that I do not know.
Skystar Biopharmaceuticals (SKBI) is a fantastic company due to a strong sustainable competitive advantage they have due to being the only veterinary medicine company in China that is not a stated owned enterprise. With a p/e of 6, over 30% annualized growth, and return on equity currently over 50%, this is a no-brainer.
Biostar Pharmaceuticals (BSPM.OB) is another great pharmaceutical company with a sustainable competitive advantage; BSPM has the only government approved OTC treatment for hepatitis b in China. This may affect up to 130 million people. BSPM is expanding their sales outlets from 3,500 to 10,000 just this year. With a p/e of 8, this company is incredibly cheap both on a current and forward looking basis.
China Energy Corp (CHGY.OB) is a 100 million dollar company divided into two business segments, their coal group and heat power segment. Their coal production in 2010 is estimated to be larger than 2008 and 2009 combined due to a change in their mining methods which changes the recovery rate from 35% to 80%.
China Biotics (CHBT) plans to quadruple revenues. While it may currently look expensive with a p/e of 23, at full capacity this company could be as low as 5.75, not to mention they expect to continue growing rapidly in subsequent years, with a potential 1000%+ revenue growth in the next 5-10 years.
Longwei Petroleum (LPIH.OB) is a $2.20 company with $.65 EPS based on 2011 guidance due to capacity expansion. Rumors are that things are going as planned and they should be able to continue growing.
I will leave you with a somewhat speculative but extremely rewarding company. This is a 48 million dollar company with a current p/e of 4.2. Jade Art Group’s (JADA.OB) mine can produce up to 40,000 tons of jade per year. That makes 128 million in revenue at full capacity. With profit margins hovering around 60%, I conservatively estimate net income of 60 million, which would put the company at a p/e of less than 1. Jada is a growing company; just for it to return to a reasonable p/e of 10 would make the stock a 20 bagger.
I advise that you look through the disclosure statement to figure out which stocks I feel are the most undervalued. You can tell this by what I own.
Disclosure: Author holds long positions in LPIH.OB, CSGH.OB, EAR, DJSP, BFAR, SKBI, CHGY.OB, CHBT, JADA.OB, BSPM.OB
About the author: Zack Buckley Zack Buckley is CEO of UncoveringAlpha.com. He developed his investing methodology by synthesizing the ideas from the best investors of all time, based on their track record. This led him to closely follow Warren Buffett, Peter Lynch, George Soros, Seth Klarman and Benjamin Graham. Using a value... More
You'll see several of my favorites in this article ... definitely worth a quick read, but it breaks down most of the fundamentals that I've covered a while back.
Top 50 Companies of 2010 (Part 1)
by: Zack Buckley March 28, 2010 | about: BSPM.OB / CHBT / CHGY.OB / CSGH.OB / DJSP / EAR / JADA.OB / LPIH.OB / SKBI Zack Buckley 1
After researching over 5000 companies, I have come up with 50 stocks that I believe to be the most undervalued companies in the world. While I do not know where they will be going in the next year, as I cannot predict the market in the next six months, I believe in the next 5 years investors will be very rewarded by purchasing these companies.
The purpose of this series is not to go into great depth in the greatest opportunities in the world, but to cover enough to prove that listening to me in the future is worth your time. I will guarantee we’ve done much more research than my cursory summaries show. I am so emphatic about the prospects for these companies that I am going to China this summer for 3 months to visit these companies. I have created a tier system for the companies. While I think they are all great buys, the articles are tiered beginning with my favorite companies in the first article and progressively less attractive but still very undervalued companies in later articles.
My first company is HearUSA (EAR), a potential buyout candidate. It is only an 80 million dollar company, yet Siemens (SI) has 600 million euros to purchase a company and cannot purchase any company that competes with EAR. You do the math. EAR is also expanding their business across the US.
Another US company is DJSP Enterprises (DJSP), my last US company for the top 50. They service foreclosures in Florida and are expanding their business across the US. As we all know, foreclosures are sky high in Florida and high across the US. The P/E is 5 and they are expanding rapidly.
China Sun Group High Tech Company (CSGH.OB) is a battery manufacturer in China with three main products: cobalt carbonate, cobaltosic oxide and lithium cobalt oxide, used in the production of lithium-ion batteries with a P/E of 8.33. For FY2008, CSGH saw revenue growth of 46% and net income growth of 27%.
Biopharm Asia is trading at a P/E of 4 and expanding quickly, with 22% revenue growth in 2008. BFAR has its own line of Chinese traditional medicines, and is also a distributor of pharmaceuticals. BFAR should now only be purchased by investors who understand the implications of the CFO resigning and that this is either a great opportunity or a great problem, and that I know that I do not know.
Skystar Biopharmaceuticals (SKBI) is a fantastic company due to a strong sustainable competitive advantage they have due to being the only veterinary medicine company in China that is not a stated owned enterprise. With a p/e of 6, over 30% annualized growth, and return on equity currently over 50%, this is a no-brainer.
Biostar Pharmaceuticals (BSPM.OB) is another great pharmaceutical company with a sustainable competitive advantage; BSPM has the only government approved OTC treatment for hepatitis b in China. This may affect up to 130 million people. BSPM is expanding their sales outlets from 3,500 to 10,000 just this year. With a p/e of 8, this company is incredibly cheap both on a current and forward looking basis.
China Energy Corp (CHGY.OB) is a 100 million dollar company divided into two business segments, their coal group and heat power segment. Their coal production in 2010 is estimated to be larger than 2008 and 2009 combined due to a change in their mining methods which changes the recovery rate from 35% to 80%.
China Biotics (CHBT) plans to quadruple revenues. While it may currently look expensive with a p/e of 23, at full capacity this company could be as low as 5.75, not to mention they expect to continue growing rapidly in subsequent years, with a potential 1000%+ revenue growth in the next 5-10 years.
Longwei Petroleum (LPIH.OB) is a $2.20 company with $.65 EPS based on 2011 guidance due to capacity expansion. Rumors are that things are going as planned and they should be able to continue growing.
I will leave you with a somewhat speculative but extremely rewarding company. This is a 48 million dollar company with a current p/e of 4.2. Jade Art Group’s (JADA.OB) mine can produce up to 40,000 tons of jade per year. That makes 128 million in revenue at full capacity. With profit margins hovering around 60%, I conservatively estimate net income of 60 million, which would put the company at a p/e of less than 1. Jada is a growing company; just for it to return to a reasonable p/e of 10 would make the stock a 20 bagger.
I advise that you look through the disclosure statement to figure out which stocks I feel are the most undervalued. You can tell this by what I own.
Disclosure: Author holds long positions in LPIH.OB, CSGH.OB, EAR, DJSP, BFAR, SKBI, CHGY.OB, CHBT, JADA.OB, BSPM.OB
About the author: Zack Buckley Zack Buckley is CEO of UncoveringAlpha.com. He developed his investing methodology by synthesizing the ideas from the best investors of all time, based on their track record. This led him to closely follow Warren Buffett, Peter Lynch, George Soros, Seth Klarman and Benjamin Graham. Using a value... More
Market Correction Likely Coming
FWIW, I am under the impression that the Market is forming a Head and Shoulders pattern and we're forming the head right now. I recommend reducing your long positions into any Market strength.
The levels I'm looking at now are:
S&P Neckline at appx 1150 ... if we break this support, WE WILL TEST THE FEBRUARY LOWS, i have little doubt in my mind.
DJIA (Dow) Neckline at appx 9900 (Feb Lows)
Nasdaq Neckline at appx 2150
QQQQ Neckline in the low $47s.
You also have to realize we're closing in on 366 days for a lot of stocks, which is what's necessary to lock-in Long-term Capital Gains. There are all kinds of things happening out there that we're not privvy to, so I'm recommending the RX forum start taking profits and move into appx 15-20% cash, maybe more depending on your risk level.
The Shorts that I will be taking this week on further market weakness are:
SDS -- Ultra-Short S&P
ERY -- Direxional Daily Energy Bear 3X Shares (because OIL, and GOLD, are going to fall as the US Dollar rallies)
QID -- Ultra-Short QQQQ
TZA -- Direxional Daily Small Cap Bear 3
I will be taking these short positions via Call Options, not by directly buying these ETFs. I intend to buy 50% after we break the January highs, then buy the other 50% as they cross above their 50-day EMAs.
There is no reason to sell all of your long positions, I just recommend cutting back on them. This is the time to be cautious and protect your gains, not to be euphoric -- as the VIX is suggesting. Capital Preservation is more important than increasing your Capital.
This market correction does not change any of my long-term / yearly projections for where these individual stocks are heading, although it will set them back over the near-term ... Yes, cheap stocks can and will get cheaper during a market correction.
The Float Lock-Downs (FLDs) that I dicussed in the new thread are probably the safest place for your money besides the Bearish Direxional ETFs.
FWIW, I am under the impression that the Market is forming a Head and Shoulders pattern and we're forming the head right now. I recommend reducing your long positions into any Market strength.
The levels I'm looking at now are:
S&P Neckline at appx 1150 ... if we break this support, WE WILL TEST THE FEBRUARY LOWS, i have little doubt in my mind.
DJIA (Dow) Neckline at appx 9900 (Feb Lows)
Nasdaq Neckline at appx 2150
QQQQ Neckline in the low $47s.
You also have to realize we're closing in on 366 days for a lot of stocks, which is what's necessary to lock-in Long-term Capital Gains. There are all kinds of things happening out there that we're not privvy to, so I'm recommending the RX forum start taking profits and move into appx 15-20% cash, maybe more depending on your risk level.
The Shorts that I will be taking this week on further market weakness are:
SDS -- Ultra-Short S&P
ERY -- Direxional Daily Energy Bear 3X Shares (because OIL, and GOLD, are going to fall as the US Dollar rallies)
QID -- Ultra-Short QQQQ
TZA -- Direxional Daily Small Cap Bear 3
I will be taking these short positions via Call Options, not by directly buying these ETFs. I intend to buy 50% after we break the January highs, then buy the other 50% as they cross above their 50-day EMAs.
There is no reason to sell all of your long positions, I just recommend cutting back on them. This is the time to be cautious and protect your gains, not to be euphoric -- as the VIX is suggesting. Capital Preservation is more important than increasing your Capital.
This market correction does not change any of my long-term / yearly projections for where these individual stocks are heading, although it will set them back over the near-term ... Yes, cheap stocks can and will get cheaper during a market correction.
The Float Lock-Downs (FLDs) that I dicussed in the new thread are probably the safest place for your money besides the Bearish Direxional ETFs.
No sir, not yet. EAR reported earnings on Friday and it was clear the AARP program has yet to appear in their financial statements. This was to be expected and was part of the reason I held off on putting out much info on this one. Still, they could be bought out via a Siemens deal and this stock would be worth a helluva lot more than where it's trading, so I recommend taking a small position if you havent. Wait for it to pull-back a bit more, I think $1.4x/$1.5x is very possible after the Con Call they gave, lol.
CKGT is a long-term winner, 'nuf said. Down-side is very minimal, while up-side is significant. I'm keeping a tentative $5 price target on this one for 2010, but it largely depends on where Q1 and Q2 '10 earnings come in. Some of the elder China investors that have been investing in China for years have a $20 3-year price target on this one. Now that'd be sweet. This largely depends on their health care product line getting launched in 2010 though.
Mostly agree with you Kuwl, general consensus seems to be S&P will hit 1200 over the earnings period, and then we may see a pullback in the short term. One thing to keep an eye on will be the 10yr treasury notes - if they climb over 4.25 that should be a big red flag.
What do you make of Searchmedia Holdings (IDI)? They are at a real low, and lack volume (not a lot of love out there for them right now, that's for sure), but some of the numbers seem good, they have had some large insider buying, and with a new CEO recently maybe they are headed for greener pastures??
What do you make of Searchmedia Holdings (IDI)? They are at a real low, and lack volume (not a lot of love out there for them right now, that's for sure), but some of the numbers seem good, they have had some large insider buying, and with a new CEO recently maybe they are headed for greener pastures??
Stone:
IDI looks interesting ... give me a couple days to read thru the filings (there's a ton of 'em!) and i'll get back to you.
As for the market ... i'm still very skeptical after seeing all the bullish divergences in the Bearish Direxional ETFs as well as the US$, but i'm not giving it just yet. I kinda have a feeling everyone knows the Jobs Report on Friday is going to be good, so it's going to be a buy the rumor sell the news scenario imo, but keep in mind the market is closed for Good Friday, so we wont know 'til Monday.
Anyway, i moved off of Margin today and was able to raise appx 10% cash, and looking to move into more cash tomorrow into any market strength.
KUWL,
Still holding XODG, should I sell all or wait for + movement, if that ever happens?
Tough call bud ... I'm still holding a large position because it's worth more than where it's trading, but it might not get much attention until next Q is reported.
It's up to you, there is clearly an opportunity cost by holding as there's money to be made elsewhere. Then again, a market sell-off wont affect this stock, so your likely to not lose money keeping it in XODG.
If you need the money or the tax write-off, sell it and walk away. Bad call on this one, i thought we got in at the right time; unfortunately, they didnt continue their growth as I was expecting. Regardless, fair value is over a buck, but it's gonna take at least another Q financial report to get us back there.
Agreed, the market has given us ample time to take some profits ... now wash, rinse, repeat once the time is right.
I'll update the board on the technicals of the market I'm watching and let the board know when I cash-in on my short positions. For now, staying short pending a crazy rally out of nowhere.
