Replies to post #12 on Value Microcaps Pick Six Lotto 10

[2morrowsGains]

My Pick6 and why I picked them...

HE.to - Hanwei Energy Services (C$2.60)...

Hanwei manufactures and sells FRP pipes for the oil industry, is developing a line of components for pollution control systems for the coal industry, and has recently entered the market for wind power products...

High Pressure FRP Oil Pipes -
(FRP = Fiberglass Reinforced Pipe)

Patented Technology

- "The Company has developed significant proprietary technology and thirteen Chinese patents concerning the design, manufacturing and testing of high-pressure FRP pipes."
- "The proprietary and recognized technology and expertise is a direct result of the Company's research and development program and has provided the Company with a distinctive competitive advantage that is difficult to challenge. The Company's high-pressure FRP pipes can withstand more than 10 times that of regular FRP pipes. This is due to the inclusion of GRE in the production process. In addition, with patents covering enhanced production equipment and techniques, the Company is able to manufacture higher quality FRP pipes at lower costs."
http://www.hanweienergy.com/products/products-technology.html
http://www.hanweienergy.com/products/high-pressure-frp-oil-pipes.html

Coal Pollution Control -
http://www.hanweienergy.com/products/coal-pollution-control.html

Wind Energy -
http://www.hanweienergy.com/products/wind-power-equipment.html
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=31897579

Joint Venture -
http://www.hanweienergy.com/investors/press-releases/20080801-1.html

Hanwei Energy = Tremendous Growth Opportunity!!! (IMO)

HOLI - HLS Systems ($5.80)

Develops and sells automation and control systems.
Rail, Subway, Coal, Nuclear, Industrial, Wind.
Expecting major announcements in the coming months.

CHME - China Medicine Corp ($1.80)

Including all warrants and options there are approx 19.6M shares fully diluted outstanding. (Strike price on warrants is $2.43 for approx 2.9M shares and $1.70 for approx 100k shares). At the 19.6M share count, CHME earned $0.125 a share last quarter! Stock looks very undervalued @ $1.80.
New product pipeline...
- rADTZ
- Weight loss product in the US.
- New product in Pakistan.

SYMX - Synthesis Energy Systems ($4.61) (Wild card)

Proprietary technology. Has the ability to convert low rank coal and coal waste into high value energy products such as transportation fuel and ammonia used in agriculture.
Ground floor. Not yet profitable but has enormous potential.

CNTF - China Techfaith ($1.15)

Q3 Outlook...Used words like "seasonality" and "a weak economic environment", but...CNTF is sitting on approx $1.66 per share in cash (and equiv) with no LT debt. Last quarter they showed a good reduction in A/R. Looks oversold.

INRB - Industrial Rubber ($15.45)

Looks to be at least 1% better than cash. LOL.

And that's my opinion on my pick6 and why I picked them!

[timhyma]

THE NSOMNIYAK CHALLENGE

CAGC.OB 1.65 (AG sector)
Trading at a 52-week low, along with most other "China" stocks. On 4 Sep they announced they entered into a contract with Superus Company Ltd. ("Superus"), an international company in Ukraine in the business of trading agrochemical products. Plus, in July, they shipped its Green Vitality liquid fertilizer product to Egypt on July 18, 2008 as per its contract with AL-WAHA KHDRAA CO..

Severe weather this year has hampered results, but they still increased revenue 25% from last year (2nd qtr). Recent reduction in raw material costs should result in increases in the profits for next quarter.


CDE 1.57 (basic materials sector)
Set a new 52-week low yesterday. On 4 Sep, they announced progress on their Bolvia mine. Then, on 9 Sep had a invitation-only conference for fund and portfolio managers. THe stock trades at about half its book value, and once the metal market stabilizes, I think it will rise back up.

GPRE 6.40 (ethanol/basic materials sector)
Going to merger, and get a cash infusion at $10 per share. Currently trading at $6.40, so just waiting for the "Street" to notice. Very low volume stock.
http://biz.yahoo.com/iw/080908/0431283.html


ICTL.OB 1.38 (services sector)
Recently announced going to move into retail stores with their "Dermawand" product. They were strictly a "informercial", so looking for some good numbers over the next quarter or two. Another low volume stock waiting to be noticed.

NXG 1.43 (basic materials sector)
Another stock in the metal sector that set a new 52-week low. Announced some inc reased reserves a couple days ago, and trading at almost half book value. Based on P/E, I think the stock it worth a little over $3

TIII 1.17 (industrial goods sector)
Another 52-week low, and the street.com but a sell rating on it last week. Even though they had reduced revenue, they produced a good quarter- I expect that things will turn around soon.
Earnings per share on a basic and diluted basis for the three months ended June 30, 2008 was $0.03 compared to $0.01 for the comparable prior year period.

[bbotcs]

Here is my list of picks and why I picked them:

I rounded up the usual suspects.

AYSI. This Motherboard favorite has come down quite a bit from its high. Right now the Australian iron ore industry might be in a quiet period, because iron ore is sitting in Chinese ports. My thought on China is that its economy will pick up after the Paralympics. I am hoping that China will start to reimport iron ore during the contest, which would be beneficial to AYSI's customers. Hoping it gets it MOJO back.

$CASH$ Enough said.

EGY. This Canadian oil drilling company which operates in West African waters does not enter into hedge contracts. I am expecting a good quarter, even though oil has come down and I expect it to continue to come down to $75. (I was told by a reliable source about the absence of hedge contracts. I did not read the filings.)

SKF. Reverse index EFT. "Shorts" the Dow Jones U.S. Financials Index. Enough said.

UVE: This perennial favorite on the main board is a Florida property insurer. It trades at a reasonable price, imo, and so far has dodged the major hurricanes-- there has been no direct hit on Florida this year. With each passing day, it is less likely that there will be a direct hit this year. (We don't know yet what the outer bands of Ike have done to the West Coast of Florida, but I doubt there is enough damage to hurt UVE.) This could be the one stock among my picks that doubles during the contest.

VSEC: Defense contractor with a super-low float. Has been acting well lately.

[nsomniyak]

THE NSOMNIYAK CHALLENGE - my own picks

Here are my picks and my reasons for picking them. I am not entirely happy with this set, as there is nothing really original in here.

ASPN.OB - Simple logic here--this is an otherwise undistinguished US natural gas company, except for one thing- the company is for sale. Long story short--old founder/CEO retired, brought in new guy who was really good, new guy had stroke, orig guy reluctantly came back (temporary, hoping for the new guy to make a recovery), new guy won't be coming back to work, and company has announced they are "opening up their data room". Basically, this means the company is for sale and right now. I am just hoping they get an offer sometime in the contest period, and that it is at at least a small premium to the market price. I believe the fact that they are hiring someone to run the data room means they have at least one buyer actively sniffing around.

http://biz.yahoo.com/iw/080904/0430763.html

ATPG - ATPG is one I have liked for a long time but never owned. It has been pushed to new lows, and might go further if oil prices weaken. On the other hand, I think that fears of damage from hurricanes Gustav (ATPG came through fine) and Ike (?) may have been putting pressure on ATPG, as few want to hold Gulf operators over a hurricane weekend. My understanding is that ATPG's facilities are modern and better suited to weather the storm than many others. On the other hand, 'canes are powerful and ATPG could be impacted if other infrastructure they rely on (i.e. collection pipelines) are damaged. Over the contest time frame, we should see what bids ATPG gets related to the assets they have indicated they "wish to monetize" (read: for sale). ATPG is given a very low cash flow multiple relative to its peers. Bids are due in the next month or so, and there is general belief that the assets are worth more than the value they are given as part of ATPG's stock price. Unfortunately for me in the contest, ATPG has moved up pretty sharply the last couple of days going into the close Friday 9/12 (although it did back off at the close)

CSKI - CSKI is a drug and medical company operating in China. I have liked China Sky Medical for some time, and had it, as CSKI.OB, in earlier PSL contests. It uplisted to the Amex (as CSY), and will be moving to the Nasdaq Global Market over the weekend of 9/12 to 9/15 (as of Monday 9/15/08, it will be CSKI). It was pushing 15 when this was announced, and has fallen off since. I like the company and its niche, but am also betting on getting better visibility on Nasdaq. I also am looking for a stock where some specific development is expected early in the contest. Given the way the market has been, this might be just an excuse for more people to hate it, but I have had too much "dead money" in prior PSL contests, where nothing was anticipated until an earnings release 2 weeks before the contest ended.

FRPT - I have owned FRPT for years. One thing that can be counted on is that it will pop and plunge over the course of a 3 month period. At an approximate entry point of 3.70, I like my changes of seeing the mid 4's in the contest time frame (20-25%), with an upside chance of catching lightning in a bottle, as FRPT is always surrounded by buyout rumors (much of which is wishful thinking, but FRPT will be generating very strong cash flows). I looked at a lot of stocks for the last of my 5 non-wildcard picks. Many of the rest offered potential but looked like trying to "catch a falling knife" as far as entering at the close 9/12.

TXIC - TXIC operates in the auto body sector in China. They are finalizing a merger at this time. This is a bet that they will have good earnings, and provide more clarity on their merger, in their conference call on Tuesday 9/16/08. I have spoken with IR, and believe they have a lot to say once the merger is final. As much as anything else, this is another bet on a stock where SOMETHING will happen early in the contest. In real life I own the warrants TXICW, for leverage.

MOSH.OB (wild card) - MOSH is a lotto ticket, based on their significant lawsuit against PXD, JPM and Woodside. There is extensive DD available on the MOSH board on iHub. I think they have a pretty good chance here, and this is one of the few stocks out there where I see a real chance at a 10:1 move, or better. Further, there is reason to believe that the stock will move in the PSL10 timeframe. There is a lot of legal posturing going on, primarily by the defendants who are refusing to provide documents and log data related to MOSH's well(s). Many interpret the court's schedule to mean that if these docs and data are not provided by 9/28/08 the defendants may face a contempt charge. The judge has dismissed almost all of the procedural roadblocks the defendants have attempted to throw up. Trial is scheduled for November 2008. I believe that one or more of the defendants may decide to settle rather than risk treble damages from a jury. The suit if for $1.2 billion dollars, and that was based on oil prices from several years ago. Even a mid 9-figure settlement would make MOSH a ten bagger and more immediately. At this point it looks like MOSH will get their day in court, despite the maneuvering by the defendants. As long as MOSH's case is not dismissed outright within the contest timeframe (unlikely) then it is very likely that MOSH will heat up as a speculation, and as a hedge, as we approach the trial date.