NSOM Challenge -
OFI is transitioning to a larger revenue base and as a result has been hurt by high food ingredient costs related to purchases on the spot market rather than by contract. One time Sarbanes Oxley expenses were also a factor in their recent weak quarter. EPS of only $0.07 last quarter, but longer term EPS should exceed the $0.11 reported in their peak quarter last year. Stock looks oversold in the mid $2’s, way down from the April high of $7.65.
CKGT is one of the cheaper China microcaps. They have a funky cactus based product line, but their financials look good. Q3 EPS of $0.044 included some non-recurring expenses for an annualized PE of under 5. Stock was briefly over $2 last January and looks cheap around $0.80.
HURC looks undervalued in the mid $30’s, way down from the 52wk high of $60+. January fiscal Q1 is their seasonally strong quarter. EPS of $0.88 in Q4 should easily be exceeded. Solid international exposure, but also cyclical.
TBYH reported EPS of $0.41 in their past March fiscal year and EPS of $0.15 in the seasonally weak first half of this year, but the company is guiding for 25% net income growth y/y .... that implies EPS of roughly $0.36 in the seasonally strong 2nd half (Dec and Mar) ..... stock is trading in the high $2’s for a PE of under 6 based on guidance.
SUOT is a rapidly growing steel company based in China. EPS of $0.17 in Sept fiscal Q1 should be exceeded in Q2. Major new production capacity is coming online in February. Company is shifting away from related party sales in order to expand gross margins. Looks undervalued in the low $4’s.
SIF looks oversold in the mid $13’s. Aerospace continues to be a growth sector. The company reported EPS of $0.43 in the last quarter and $1.27 for their Sept fiscal year, albeit at only a partial tax rate. Backlog up significantly y/y.
