My picks for PSL13
First, I think that this will be a much more difficult period for stocks to run....and I've selected CASH for one of my choices. I'm waiting for a pullback in one or two stocks that I'm currently following.
The other picks generally follow along the lines that I've laid out earlier: I look for low PEG stocks, with strong sales and eps growth combined with good operating metrics like good cash flows or other important catalysts that investors will find attractive.
CBPO.ob - China Biologic (OTC - 5.64). I've discussed this one many times before, and it was one of my picks in the last PSL contest. You can search for my prior comments on this one, but with an adjusted fd eps of 0.35 in Q2, and on track to earning 1.00+ in fd, ft eps for the FY09 I think its still one of the better buys out there. They continue to hold CCs and attend investor conferences, and added some really high quality VC investors through a recent PP and block sales of stock from another early investor. I'll write up more on this in another post.
CKGT.ob - China Kangtai (OTC - 1.40) This one ran up into the beginning of the contest, and it may pull back intraday in the short run, but its still pretty undervalued on a PEG ratio basis relative to comparable China stocks. Its primarily products for sale don't resonate with a Western audience (cactus products?) but it has decent operating metrics and is just starting to emerge by attending its first ever conference at R&R and hiring a PR firm (admittedly low quality) to help with PRs on earnings and sales efforts. Company earned 0.08 in Q2, and is coming into their seasonally strongest part of the year, which is the 2nd half. New sales initiatives underway include feed additives and cigarettes. May not contribute much to 2009, but 2010 outlook could be very strong.....we'll see. Company could be more transparent in its dealings.
CHBT - China Biotics (NAS - 13.00). One of the stronger stocks based upon balance sheet, ability to generate cash from operations, and the fact that they have just opened up a new facility which should start contributing soon to sales growth. They surprised last quarter with strong sales growth than I expected. Margins are starting to expand along with sales; earned 0.31 in Q1 (FY10), so not as cheap as some others....but I give them high marks for management and being on the Nasdaq. Shelf registration filed does give some pause, but thats the only fly in the ointment I can see. Very solid demand in the probiotics market in China, with limited competition at present.
WKBT.ob - Weikang Biotech (OTC - 1.65). Earned 0.13/share in Q2 (0.28 ytd). One of the cheapest PEG plays out there, with what appear to be solid financials. Good OCF, decent margins, selling in the TCM/Western pharm sector which has seen high growth rates in the past few years. Just did a mildly dilutive PP at 1.75, so you get the opportunity to get in lower than those investors did (ARC China)!
RGCI - Regent Communications (Nas - 0.37). Company in the hot radio sector which has seen a tremendous influx of buying in the past few months. RGCI still looks cheap on an adjusted forward eps basis, and has strong cash flow. The company earned 0.044 after I made adjustments for one times and a full tax rate for Q2. Q2 appears to be a seasonally strong quarter, but Q3 and Q4 could be similar as cost cutting benefits the bottom line. Paying down debt and healthy relationships with their bankers will be key for Regent going forward.
AI
