China MediaExpress Holdings, Inc. (fka CCME)

[Shengli]

Wall Street's Best Unknown Stocks

http://www.fool.com/investing/general/2010/05/11/wall-streets-best-unknown-stocks.aspx


Wall Street's Best Unknown Stocks
By Rich Duprey
May 11, 2010 | Comments (0)



ShareThisWhen asked for the secret of his success, baseball player Wee Willie Keeler replied, "Hit 'em where they ain't." What worked for Willie at the plate applies equally well in investing.

Seeking stocks that others ignore, shun, or simply forget gives individual investors like you an edge over the professionals. When Wall Street turns a blind eye, you have a chance to get in before these stocks get discovered -- or rediscovered -- and start taking off.

Below, we'll check out companies with only a handful of analyst coverage, then pair our list with the opinions of the Motley Fool CAPS community. A stock that garners CAPS' top ratings, but hasn't yet caught analysts' attention, could be your next home run investment.

Stock
CAPS Rating (out of 5)
Wall St. Picks
Expected 5-Yr. EPS Growth

China MediaExpress Holdings (Nasdaq: CCME)
****
0
N/A

KMG Chemicals (Nasdaq: KMGB)
*****
2
20%

MELA Sciences (Nasdaq: MELA)
***
4
40%


Source: Yahoo! Finance and CAPS. N/A = not available.


Remember, with little or no analyst support for these stocks, you'll have to do your own scouting to see whether they deserve a spot on your portfolio's roster. Don't buy or sell them based solely on their appearance here.

A utility player
China MediaExpress Holdings operates China's largest television ad network on intercity buses. The company just reported that its strategy to separate advertising rate charges for different media is paying big dividends. Preliminary first-quarter results show profits of as much as $18.5 million, on revenue that could come in as high as $45 million. That's a 40% sequential top-line increase and a better-than-29% jump in bottom-line numbers, even though the fourth quarter is typically the company's strongest.

When similarly situated Focus Media (Nasdaq: FCMN) reports earnings later this month, we'll see whether only China MediaExpress's business prospects are growing by leaps and bounds, or whether the boom is more of an industrywide phenomenon. Back in March, Focus reported revenue well ahead of even its own expectations, and forecast solid numbers for the first quarter, too.

Surprisingly, VisionChina Media (Nasdaq: VISN) hasn't enjoyed the same good fortune. It reported yesterday that it suffered a 14% decline in revenues, largely because of rate hikes and an acquisition binge. Apparently, television isn't benefiting from the same growth opportunities that other outdoor and transportation-based media do.

A private placement ChinaMediaExpress completed earlier this year has boosted CAPS member egarl's confidence: "Fast growing with cash to acquire more assets. 2010 will be a rapid growth year for them."