Here are my ten amigos, almost all of which i own (or, as noted, i'd buy on a dip or on reallocation of profits). These were selected in terms of best risk/reward and upside potential (IMO) for the next 12-18 months.
CCME --recent blowout earnings, great biz model, wide moat, and possible gap up to this "new media advertising" sector's high P/Es [18-25] suggest a 3- to 4-bagger in 12 months for this stock trading on ttm P/E of only 5, forward P/E of likely 3 on 2011 EPS. Note that CCME is the "youngster" compared to FMCN, AMCN, VISN, et al., and all it needs is another big qrtr or two of earnings to prove to institutions and funds that it's a leading member of this sector and then the P/E will be bid up to levels nearer its peers here.
CNAM --if you buy the recycled scrapmetal growth story, this is potentially huge; a 2nd recycle facility could make this a $1bn rev/yr company. (And what about possible 3rd or 4th recycle facilities to meet huge demand for scrap in China?) Forward P/E of ~2.5 based on 2011 EPS of at least 1.50.
JADA.OB --as one CPA shareholder wrote, this co. could go 4 years without selling any of its SheTai jade and still be solvent without dilution or debt, such is the ridiculously low cashburn rate; co.'s earnings have certainly been choppy, but it's steadily growing its cash on huge margins, so one day it will vertically integrate and grow steadier earnings. Like CCME it could easily enact a share-buyback and institute a 3% to 5% dividend to re-set its shareprice to a higher level. Ttm P/E of 2.0.
LTUS.OB --everything is coming together for this pharma's colossal growth story, with no more overhang worries about its cash or dilution. Another stock with outrageously low trailing & forward P/E and PEG.
CKGT.OB --this manufacturer of cactus based healthy nutriceuticals and beverages, etc., is ramping up its newer healthy animal feed and no/low nicotine cigarettes for huge growth in coming years; if either the cigs or feed take off (and people like the cigs' taste and evidently animals like the feed) this is another billion-dollar co.
YYIN.OB --their goat milk is far healthier than cows' milk for babies, kids, adults and the environment; co. was in transition last 10 months or so, incurring big expenses for revamping product line, hiring big-clout Trout & Partners P.R. firm, and running prominent ads in major tv slots; their brand identity as "healthier form of milk" in minds of health-oriented Chinese (not yet conditioned to think of cows milk as the "main form of dairy," unlike in Europe & Americas) could lead to gigantic sales.
CPQQ.OB-- this stock had super-fast run-up in summer-fall 2009, but disappointed EPS growth expectations for 2010 b/c of dilution. Looks like a great play for 2011 with its new 4x greater capacity plant for its energy saving electric transformers and transformer cores, products mandated by the PRC govt to replace existing transformers and be used in all new power lines.
NEP-- In-house political problems with director Bruce and a trading halt on need to re-do numbers have created uncertainty; when everything blows over and trading resumes, this should be at least a $15 stock in 6-12 months (i.e., nearly a 3-bagger from present halted pps of $5.50).
CHBT-- I'll likely buy this on a dip. I agree with others here that this has vast upside potential; the Waldo Mushman short hypothesis declaring that "the SAIC figures and SEC figures don't match" for CHBT and many other China cos. is irrelevant, a red herring, b/c the SAIC and SEC are utterly disimilar agencies.
Really undecided about which one to put in for #10 here. I've got a lot of other companies on my watchlist, some of which i actually own (like SPU, CAGM, CHOP, SCEI, NFEC, CNOA), and others with which i'm very impressed and might buy on a significant dip or with reallocated profits (like SOKF.OB, ZSTN, BORN, CREG, NEWN, UTA, LPH, CBEH, BFAR.OB, JGBO, WKBT.OB, HFGB.OB and many others), almost all of which could see great advances in 2H 2010 and certainly as we get into 2011....
So i guess i'll put for #10 CELM, only b/c its price looks depressed right now at under $5 pps. Being an IPO, its pps can swing up higher than most reverse-merger companies' stocks. Could be a double at any time over next 6-12 months.
One last point here is that most of these will only see their stocks' big upside potential unfold with sector rotation by Big Money back into the U.S.-listed China smallcap space. I see that happening if/when the Shanghai Composite Index soars back over 3,000 as many big analysts see it doing in next several months.
--Timothy
AI
