It’s Time To Buy Low…

It’s perfectly understandable that people are scared right now. It’s a frightening market. But there’s one obvious benefit.  All we have to do is remember the golden rule of investing.

Buy low and sell high.

Despite the negative news, this is a value feeding frenzy.  Companies by the bucketful are hitting 52-week lows.  While that’s bad news for current owners, if you’re looking to scoop up great companies on the cheap, now’s the time.

Here’s one to take a look at.

 

QUICK FACTS

Ticker                                      TC

Industry                                    Industrial Metals & Minerals

Recent Price                             $7.62

Market Cap                               $1.2 B

Shares Outstanding                   167.9 m

Average Volume                        889,580

Dividend Yield                           N/A

Website                                    http://www.thompsoncreekmetals.com/

 

COMPANY DESCRIPTION

Thompson Creek Metals Company (TC) is named after their flagship mine. The Thompson Creek Mine is flush with molybdenum.  It’s a corrosive resistant mineral with an extremely high melting point.

Because of its unique features, it has countless industrial applications.

Thompson Creek also holds a 75% stake in the Endako Mine near Prince George, British Colombia. That one is also a molybdenum mine.

In addition to the mines, Thompson also owns the Langeloth Metallurgical Facility. They use the facility to ‘roast’ the molybdenum and turn it into an industrial grade oxide.

The Company also has four other exploratory properties in Canada.

 

FINANCIALS

Thompson’s financials look strong and are getting stronger.

Their revenue for Q2 was up 28.6% to 190.9 million.  Their six months’ revenue is up over 44% reaching an astounding $397.6 million.

The company is making good money.  Net income for the quarter reached $116.8 million or $0.70 cents per share.

Cash flow is strong with the company generating over $53 million in the second quarter.  Best of all, the Thompson Creek is sitting on a treasure chest filled with $560 million in cash!

 

KEY METRICS ANALYSIS

Trailing P/E                                       5.4

Price / Sales                                     1.7

Return on Assets                               7.2%

Insider ownership                               1%

Short Ratio                                        6.5 x

Current Ratio                                     5.5 x

Total Debt To Equity                           1.1 x

 

RECENT EVENTS

Thompson has been working towards diversifying their minerals.   They’re expanding beyond molybdenum into traditional metals like copper, and gold.  Perfect timing if you ask me.

The company is in the process of development and construction of the Mt. Milligan mine. They describe it as a conventional ‘truck-shovel’ open pit mine. It will include a processing plant with a capacity of 66,000 tons a day.

Thompson projects average production of 81 million pounds of copper and 194,500 ounces of gold a year. The mine has a projected life of 22 years.

 

MANAGEMENT TEAM

Kevin Loughrey – Chairman and CEO

Scott Shellhaas – COO and President

Pamela L. Saxton – CFO and Executive Vice President

Mark Wilson – CCO and Executive Vice President


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

Sales growth was big in 2011. And the company is about to diversify into gold and copper. Things are looking good for this company, and it’s had a strong year. Yet this company hit its 52-week low a couple of weeks ago.

Since that low it’s gone up .54 cents. The only thing holding this stock back is market worries. Once those dissolve get ready to see TC come back with a vengeance.

TC’s 52-week low was $7.05 and the 52-week high was $16.06.  Right now the stock is trading at $7.62.  The 50-day moving average is near $8.95 a share and the 200-day moving average is at $11.08.  The company has a market cap of $1.27 billion and 167.9 million shares outstanding.

 

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This Hidden Gem Is Growing Like A Weed!

Exactly one year ago, a tiny penny stock was hovering around the dollar level. Actually, it was trading for $1.08 per share. Less than a year later, the stock jumped in value to over $2.00… then $4.00… then $8.00… finally peaking at a value of $10.24 a share!

For those of you quick on the math, that’s a massive 848% win – in less than 8 months!

Why was this one penny stock so successful?

I have two words for you – RARE EARTH.

Now the company is trading for more realistic values because of the turbulent market action.

 

QUICK FACTS

Ticker                                      SHZ

Industry                                   Mining

Recent Price                            $2.63

Market Cap                              $81 m

Shares Outstanding                  30.8 m

Average Volume                       186,054

Dividend Yield                           N/A

Website                                   http://www.chinaszmg.com/

 

COMPANY DESCRIPTION

China Shen Zhou makes the majority of its money from Fluorite.

Now, I know what you’re thinking… google the term “Rare earth” and you won’t see Fluorite listed! Here’s the thing… Fluorite may not be an official “Rare Earth”… but it’s rare enough for the Chinese Government to restrict the exploitation of it.

Why all the fuss?

Fluorite is used primarily as a melting agent. To put it simply Fluorite lowers the melting point for steel and also aluminum. It also makes removing imperfections in the steel easier.

We’ve done a series of reports on Chinese companies. The obvious motivation is China’s epic growth rate. With annual growth around 10% China has a ravenous appetite for steel.

And right now, almost 88% of the Fluorite produced in China is used domestically.

What’s more, there is also a good reason to assume prices will continue to rise. In early 2010 Fluorite was $118/ton, a few months later prices hit $295/ton. If China continues to restrict exploration and exploitation of Fluorite, prices should continue heading higher.

 

FINANCIALS

Business prospects are definitely looking up for SHZ. Their revenue jumped 318% in Q2 2011 compared to the previous year. Gross margin more than doubled too.

Revenue was $9.1 million, with the company posting a net income of $128,000. That’s a great sign for the future of this company. Their assets are up nearly 60% year over year. Liabilities are actually trending down.

Earlier this year management had a lofty goal of tripling revenue. They’ve already hit $11 million this year after only two quarters. That’s an increase of 284% year over year. Can they hit their target?

China Shen Zhou is certainly well on its way to getting there.

 

KEY METRICS ANALYSIS

Trailing P/E                                 N/A

Price / Sales                               6.8x

Return on Assets                         N/A

Insider ownership                         79.3%

Short Ratio                                   4 x

Current Ratio                                0.74x

Total Debt To Equity                      31.7

 

RECENT EVENTS

Early this year China Shen Zhou bought 55% of another Fluorite mining operation. In that deal they acquired rights to three additional mines.

Remember, mining operations take time to set up. We haven’t seen full revenue potential from those mines yet. However, down the line they should provide a healthy increase in both production and revenue.

So business is strong, and prices are rising. New mine sites are being acquired, and goals for increased production are set.

Combine all that with a government policy heavily in their favor, and you have what sounds like a winning combination!

 

MANAGEMENT TEAM

Xiao-Jing Yu – Chairwoman and CEO

Helin Cui – COO and Director

Xueming Xu – Director

Ligang Wang – Vice President

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

SHZ’s improving financials isn’t reflected in their stock’s performance. But that’s good for investors. A lot of great value companies, especially in China, are becoming very affordable. The recent market woes are great buying opportunities.

This company has already grown revenue by an extraordinary amount this year. This stock was trading for nearly $11 in January after posting a loss in 2010. There’s nothing stopping this company from getting back up there now that SHZ is in the positive.

SHZ’s 52-week low was $.82 and the 52-week high was $10.84.  Right now the stock is trading at $2.63.  The 50-day moving average is near $2.96 a share and the 200-day moving average is at $4.26.  The company has a market cap of $81 million and 30.8 million shares outstanding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Leading Medical Supplier Coming Back Strong!

There are certain industries that are blessed with steady demand. Even during a worldwide economic slowdown like this one. Healthcare is one of those industries.

Injuries are inevitable regardless of the economic climate. So are surgeries and other medical procedures. That’s why this next company still has a healthy bottom line quarter after quarter.

QUICK FACTS

Ticker                                     WWIN

Industry                                   Medical Instruments & Supplies

Recent Price                            $3.74

Market Cap                              $90.3 m

Shares Outstanding                  24.1 m

Average Volume                      17,338

Dividend Yield                          N/A

Website                                   http://www.winnermedical.com/


COMPANY DESCRIPTION

Winner Medical is a China based company providing cotton-based medical dressings.  You probably know it as gauze.

But their extended product lines are a bit more diverse. They manufacture and design gowns, face masks, sterilization pouches, and various fluff balls and swabs. Demand for these products never really drops, it only grows.

Especially in China where we’re seeing improving and more widely available health care.

They’ve also expanded far beyond their domestic stomping grounds. Of their $41 million in revenue, $16 million is from Europe, $8.5 million from the U.S. and $6 million from Japan.

FINANCIALS

This quarter is generally a slow one for Winner. That being said they still destroyed the previous year’s numbers. Year over year sales revenue was up 34%!

Assets are up 21% compared to the end of last year’s accounting period.

Gross Margin has gone down just a smidge year over year. Their net income isn’t in optimal condition this quarter. But that’s a result of short term commodity pricing issues.

Another good sign for the future for this company is their sales growth. Domestic sales in China increased by 52%. Sales to Brazil increased a whopping 268%. Sales to Europe increased 30% this quarter as well.

That’s reflective of the product they are selling. As long as Winner continues to make high quality products at lower prices they will continue to grow their market share.

KEY METRICS ANALYSIS

Trailing P/E                                       7.5x

Price / Sales                                     0.7x

Return on Assets                               7.8%

Insider ownership                               76.1%

Short Ratio                                        5.7x

Current Ratio                                      3.4x

Total Debt To Equity                             4.7

RECENT EVENTS

So there’s a lot of good news for this company.  But we have to address the elephant in the room… commodity prices are rising.

Cotton prices hit all-time highs this spring. WWIN primarily manufactures cotton-based products. So it was safe to assume this was going to be a brutal quarter for Winner. Despite the increase in costs, their production and sales were robust enough to remain profitable.

In March cotton peaked at about $2.30 a pound. Since then it’s plunged to about $1.03 a pound. That means we’ll be seeing expenses normalizing in the near future.

But that hasn’t stopped a lot of investors from fleeing like rats from a sinking ship. Panic and speculation often equals gains for cooler heads.

MANAGEMENT TEAM

Jianquan Li – President and CEO

Xiuyuan Fang – VP and CFO

Nianfu Huo – Senior VP

STOCK ANALYSIS


 

 

 

 

 

 

Chart courtesy of stockcharts.com

 

I’m not surprised this stock nosedived in August. The market has been quite volatile over the last few weeks.  WWIN is trading well below both the 200 and 50-day averages.

They just made a new 52-week low a couple days ago.  We’re already up 30 cents from the low.

WWIN’s 52-week low was $3.50 and the 52-week high was $6.32.  Right now the stock is trading at $3.74.  The 50-day moving average is near $4.48 a share and the 200-day moving average is at $4.76.  The company has a market cap of $90.3 million and 24.1 million shares outstanding.

 

Click HERE to read our report on China Shen Zhou (SHZ)

Click HERE to read more about Tianyin Pharmaceutical (TPI)

 

 

 

 

 

 

 

 

 

 

 

 

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Tap Into Massive Market Demand with 1.3 Billion Potential Customers!

It seems like China became the world’s second largest economy overnight.

Their phenomenal growth has created a lot of new Chinese wealth. That increase in wealth has brought with it new consumer demands. One of those demands is for modern healthcare and better coverage.

As countries become more affluent, their healthcare standards increase. In China we’re seeing lots of people moving up to the middle class.

A significant number of rural Chinese are moving into cities. That inevitably leads to more access and an increase in market base. Couple that with an overhaul of China’s public healthcare, and the market demand looks ready to explode…

There’s definitely a lot of growth potential for drug companies in China.  Let’s look at one of those break-out companies now.

 

QUICK FACTS

Ticker                                      TPI

Industry                                    Drug Manufacturer

Recent Price                             $1.53

Market Cap                               $43.17m

Shares Outstanding                   28.2m

Average Volume                         41,445

Dividend Yield                            N/A

Website                                    http://www.tianyinpharma.com/

 

COMPANY DESCRIPTION

Tianyin Pharmaceutical (TPI) develops, manufactures, markets and sells medications in China.  Their products include patented medicines, generics, and modernized traditional Chinese medicinal treatments.

They manufacture 56 different products in three GMP (Good Manufacturing Practice) certified plants.  Tianyin manufactures just about every delivery system imaginable: liquid, syrups, capsules, granules, and tablets.

They aim to increase annual manufacturing capacity by 275% at their new plant by 2014. Management wouldn’t be investing that much if there wasn’t some serious unfulfilled demand. 

Tianyin has also secured a truly epic distribution network. They reach over 880 hospitals in 200 medium to large cities in China.

Twenty-three of the company’s drugs are on the Chinese “National Medical Reimbursement List.”  And 7 are included on the “Essential Drugs List.” In other words, the Chinese government’s list of medications they cover for their citizen’s public healthcare plan.

These lists were set up within the last couple of years. The impact on the Chinese pharmaceutical and healthcare industry is obvious. But I think it’s stayed under the radar of many investors in the west.

 

FINANCIALS

Tianyin has had a history of healthy growth for most of the past decade.  In 2003 they only had $400,000 in revenue, and a net loss of $400,000.  In 2010 the company was bringing in $63.9 million in revenue with a bottom line profit of $12 million.

Year over year sales growth for the quarter ended in March was 56%.  Gross profits are up 44% over the same quarter last year.  Net income for the quarter was up 28% to $3.7 million.

During the same period they’ve grown cash by $8 million, and their assets are up 32%.

You’ll be hard pressed to find a better run company. The proof is in the execution of their business model. They’ve had a phenomenal growth rate. And their sales have been strong for years, and will only get stronger at an accelerated rate because of the demand factors.

 

KEY METRICS ANALYSIS

Trailing P/E                                         2.9

Price / Sales                                       0.43

Return on Assets                                16.4%

Insider ownership                                 35.7%

Short Ratio                                          0.2x

Current Ratio                                       4.9x

Total Debt To Equity                             3.5

 

RECENT EVENTS

The big news is TPI’s new Jiangchuan Macrolide facility. Management projects the facilities revenue potential to be $120 million by 2014.

Regulators recently visited the plant to run the final GMP certification tests.  These tests are to determine performance under simulated operating conditions.  If the plant is efficient, reliable, and safe, it will be awarded GMP certification.

The facility will primarily be used for production of Active Pharmaceutical Ingredients.  Those will be used in macrolide antibiotics manufacturing.  Management believes this will help them capitalize on the recent health care reform.


MANAGEMENT TEAM

Dr. Jiang, Guoqing M.D. – Chairman and CEO

Dr. James J. Tong, MD, Ph.D – CFO, Chief Business Development Officer

You, Xintao – Chief Technology Officer

Yang, Tao – COO


STOCK ANALYSIS

 

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

Despite the strong financials, TPI has been trending way down. The stock price is being driven by market fears not related to the company. It has strong fundamentals, a good game plan, and impressive assets. This could definitely be a buying opportunity.

TPI’s 52-week low was $1.35 and the 52-week high was $3.69.  Right now the stock is trading at $1.53.  The 50-day moving average is near $1.50 a share and the 200-day moving average is at $2.13.  The company has a market cap of $43.2 million and 28.2 million shares outstanding.

 

 

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Invest To Save The World

Cancer is one of the most destructive forces in the western world today.  Investing in pharmaceutical companies that specialize in oncology pays an extra dividend.  Namely the dividend of good will.  I’m not saying invest in a fiscally unsound company just because they fight cancer.  But it’s nice when you can find a healthy company developing treatments to combat this scourge.

 

QUICK FACTS

Ticker                                     SUPG

Industry                                  Drug Manufacturer

Recent Price                           $3.14

Market Cap                             $189 m

Shares Outstanding                 60.4 m

Average Volume                      165,636

Dividend Yield                          N/A

Website                                  http://www.supergen.com

 

COMPANY DESCRIPTION

SuperGen (SUPG) is a pharmaceutical company that specializes in oncology.  The company generally acquires medications developed by other companies and improves upon them.  For example, the company purchased Montigen Pharmaceuticals a couple of years ago.

From that acquisition the company has acquired and further developed Amuvatinib, a DNA repairing drug.  The company primarily develops drugs that target cancer on a small molecular level.

Their two marketed products, Dacogen and Nipent, bring in most of their revenue.  And that revenue is almost entirely derived from royalty and milestone payments.

Right now the story of SuperGen is a story of two companies.  That’s because SuperGen and a British bioscience firm, Astex Therapeutics, have decided to merge.

 

FINANCIALS

Royalty revenue in Q1 was up from last year by about $2.7 million.  Net Income increased about 17.5%.  The company expects to receive about $55 million in royalty revenue this year from Dacogen.

At the end of Q1 the company had approximately $136 million in assets.  In a recent investor presentation CEO Dr. James Manuso said that the company had been debt free for years.  And SuperGen hasn’t needed to raise money since 2004.

This company seems to take pride in not living beyond their means.  The company that they’re merging with, Astex Therapeutics, is also ‘cash flow neutral.’  They haven’t needed additional funding since 2003.

 

KEY METRICS ANALYSIS

Trailing P/E                                      11.2

Price / Sales                                     3.2

Return on Assets                               8%

Insider ownership                               4.6%

Short Ratio                                        7.9x

Current Ratio                                     16.5x

Total Debt To Equity                           N/A

 

RECENT EVENTS

SuperGen recently announced a merger with Astex Therapeutics.  This deal will net the company immediate partnerships with five of the world’s leading pharmaceutical companies.  Management estimates it could be worth nearly $2 billion in potential milestone revenue.

SuperGen will also gain access to a proprietary drug discovery platform developed by Astex.  Pyramid works at a molecular level to do tests and experiments that were formerly impossible.  This is right up SuperGen’s alley.

Not to mention the more robust clinical structure available for both companies.  Combined, they will have seven drugs in the pipeline.  Four of those drugs are already in Phase II of testing, and three are partnered with big pharmaceuticals.  That means big royalties in the future, but also big costs in Phase III.

The combined company will change its name to Astex Pharmaceuticals, and the NASDAQ ticker will be changed to ASTX.

Astex Therapeutics shareholders are being compensated with 35% of SuperGen’s outstanding equity, as well as $25 million in cash.  Astex’s current owners are also getting $30 million in stock or cash over the next 30 months.

 

MANAGEMENT TEAM

James S. J. Manuso Ph.D – Chairman, President and CEO

Michael Mokentin – CFO, Corporate Secretary

Mohammed Azab M.D. – Chief Medical Officer

 

STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

As you can see this stock bounces around a lot.  They’re not huge swings, generally between $3.30 and $2.50.  This stock has also spent a fair amount of time above the 50-day moving average.  Currently it’s trading right around the 50-day.

SUPG’s 52-week low was $1.71 and the 52-week high was $3.35.  Right now the stock is trading at $3.14.  The 50-day moving average is near $3.01 a share and the 200-day moving average is at $2.89.  The company has a market cap of $189 million and 60.4 million shares outstanding.

 

 

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