SwingTrade Member Forum

[MikeDDKing]

RBCL update (1/16/09)

RBCL is one of my favorite stocks that I think will triple to quadruple from current levels over the next year. They made $0.037/share last quarter and trade at less than four times annualized Q3 earnings. They have been growing over the last few years which is a trend that I strongly believe will continue given their large backlog and growth initiatives. RBCL sells nutritional and medical products and consequently has a recession resistant business. Here are some more reasons why I think RBCL will move significantly higher in the next year:

1. Rapidly Growing Earnings - RBCL had record EPS of $0.037 in Q3, the most recent quarter. Given their backlog, 2008 likely will produce record annual earnings. 2007 earnings were a huge improvement over 2006 ($0.08 in 2007 vs. $0.02 in 2006). They have a very strong trend of improvement in earnings over a long period of time and I expect that trend to continue.

2. Huge Backlog - Backlog is $8.7M for their CCI account in the most recent quarter which is the second highest level in history. Also, the backlog only represents a portion of their sales going forward. They have GM of 47.5% so additional sales drop rapidly to the bottom line.

3. Rapidly Growing Medical Sales - Medical sales jumped 42% year-over-year and looks like it will continue. At the end of March they announced an expansion of their medical segment into Latin America. They also announce in February that they would begin selling their products in Kroger. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=28065107 http://investorshub.advfn.com/boards/read_msg.aspx?message_id=26926765

4. Expanding Nutritional Sales - Nutritional sales increased 23.5% in the most recent quarter due to international expansion. The company has embarked on some new initiatives to expand their US and Canadian nutritional sales.

5. Strong Balance Sheet - RBCL has a book value of $0.39 which includes $0.33 in cash. That puts them in a strong position financially to continue growing.

More DD can be found on the RBCL board:
http://investorshub.advfn.com/boards/board.aspx?board_id=9877

Mike