There’s Power In This Battery Stock

In 2008 the Chinese purchased 9.4 million cars. That’s a lot of cars.

But, believe it or not, they bought more than twice as many electric bikes (e-bikes)!  E-bikes are affordable, rechargeable, and green. It’s really no wonder that they are selling like hotcakes…

But every motorized vehicle needs one important component… A battery.

 

QUICK FACTS

Ticker                                      ABAT

Industry                                   Industrial Electrical Equipment

Recent Price                            $1.10

Market Cap                              $83.7 m

Shares Outstanding                  76.1 m

Average Volume                       727,053

Dividend Yield                          N/A

Website                                  http://www.zqpt.com/en/

 

COMPANY DESCRIPTION

Advanced Battery (ABAT) has two primary sources of revenue. Batteries for e-bikes make up about 42% of the company’s revenue. Rechargeable polymer lithium- ion batteries make up the other 68%.

Each one of those products is delivered by its own subsidiary.

Harbin Zhongqiang Power is the battery subsidiary. They produce batteries for commercial and industrial purposes, as well as transportation batteries.

In 2009 Advanced Battery acquired Wuxi Angell Autocycle. With that acquisition came facilities capable of manufacturing 500,000 units a year. They produce a variety of transportation options, like e-bikes, scooters and motorcycles just to name a few.

 

FINANCIALS

Revenue has been exploding over at ABAT. In 2008 they were making $45 million. That was up to $63 million by 2009. In 2010 revenue was up over 50%.

This year the numbers are off the charts.  The company’s already reporting almost $60 million in revenue… and that’s just for the first two quarters.

But revenue isn’t the only thing growing… Net income is up 37% for the last six months!

The company had enough money on hand to pay for the acquisition. ABAT carries no long-term debt.

 

KEY METRICS ANALYSIS

Trailing P/E                                       2.2x

Price / Sales                                     0.72x

Return on Assets                              12.6%

Insider ownership                               12%

Short Ratio                                        3.4 x

Current Ratio                                     13.7 x

Total Debt To Equity                            N/A

 

RECENT EVENTS

In January 2011 ABAT’s subsidiary Harbin acquired another lithium battery company.  Shenzhen Zhongqiang New Energy Science & Technology was purchased for $20.5 million.

The company manufactures small lithium batteries for things like MP3 players and phones. ABAT’s aim was to diversify their revenue stream.

Shenzen Zhongqiang also has the added bonus of being located in the city Shenzhen. Before the acquisition the company lacked much of a foothold in that large southern city. This strategic purchase will rectify that weakness in their distribution chain.

 

MANAGEMENT TEAM

Mr. Zhiguo, Fu – CEO

Mrs. Guohua, Wan – CFO

Mr. Hongjun, Si – Chief Technology Officer


STOCK ANALYSIS

 

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

This stock has really slumped down since the beginning of the year, but that’s due to the global economic slowdown and crazy market action.

Remember, China’s auto-industry is growing like a weed!

ABAT’s 52-week low was $.79 and the 52-week high was $4.35.  Right now the stock is trading at $1.10.  The 50-day moving average is near $1.27 a share and the 200-day moving average is at $1.65.  The company has a market cap of $83.7 million and 76.1 million shares outstanding.

 

 

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A Small Stock With A Big Dividend!

The market’s a rough place right now. Investors are nervous and the economic outlook is questionable. But there’s one type of stock that remains popular even in a slowdown. I’m talking about stocks that pay dividends.

Small cap stocks and dividends are not mutually exclusive. There are some small companies that pay healthy dividends.

 

QUICK FACTS

Ticker                                      RAS

Industry                                   REIT – Diversified

Recent Price                            $3.48

Market Cap                              $144.8 m

Shares Outstanding                  38.4 m

Average Volume                       367,380

Dividend Yield                           6.1%

Website                                   http://www.raitft.com/

 

COMPANY DESCRIPTION

RAIT Financial Trust (RAS) is a vertically integrated REIT with two business lines. The company participates in both commercial real estate lending and direct ownership.

Their commercial lending portfolio consists of approximately $1.2 billion in loans. The majority of their loans are for multi-family housing. But the company also caters to mid-sized offices and neighborhood retail.

On top of that, RAIT Financial owns about $900 million of real estate. About $600 million of that are multi-family properties.

RAIT has two in-house management companies. One of them, Jupiter Communities, concentrates on the multi-family properties. They manage 12,000 units, 3,000 of those for third parties.

Their other in-house management company is known as CRP Commercial.

 

FINANCIALS

Everyone involved in real estate has had a nasty few years. But it’s good for us investors. Some companies, like RAS, are coming out of their slump, still heavily discounted.

At the end of the Q2 2009, RAS had an allowance for losses of $237 million. That year the company had a net loss of over $427 million.

By 2010 management turned the company around and generated a net income of nearly $111 million. Their provision for losses was down from $226 million in 2009 to $38 million at the end of 2010.

Another positive sign is the resumption of dividend payouts. In Q2 2011 the company paid out a quarterly dividend of $.06 cents a share. Definitely an improvement over last year’s payout of nothing.

 

KEY METRICS ANALYSIS

Trailing P/E                                       4.2 x

Price / Sales                                     1.1 x

Return on Assets                               1.4%

Insider ownership                               3.9%

Short Ratio                                        2.6 x

Current Ratio                                     8.5 x

Total Debt To Equity                           2.1 x

 

RECENT EVENTS

There are a couple of exciting things going on for RAS.

The biggest news is their acquisition of another non-publicly traded REIT known as Independence Realty Trust. It is also focuses on multi-family properties.

RAIT will be the external manager, and receive a fee for their work.

Another important aspect of the multi-family residential properties is their occupation levels. With more people out of houses, and fewer homes being built, more people are renting.

At the end of March 2010 their properties had 71% occupancies. By the end of March 2011 that was up to 82%.

Now that the occupancies are strengthening, property managers can begin pushing rents higher.

 

MANAGEMENT TEAM

Scott F. Schaeffer – CEO

Jack E. Salmon – CFO

Raphael A. Licht – COO

Kenneth R. Frappier – Chief Credit Officer


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

The recent slump on Wall Street has hit the REITs hard.  That just makes it a better time to invest.

Over 30% of RAS is now held by various funds and investment banks. Many of those jumped into the stock earlier this year.

RAS’s 52-week low was $1.30 and the 52-week high was $3.78.  Right now the stock is trading at $3.48.  The 50-day moving average is near $2.19 a share and the 200-day moving average is at $2.47.  The company has a market cap of $141 million and 38.4 million shares outstanding.

 

 

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Secure Your Home And Office

Landlines are going the way of the dinosaurs. Logistically it impacts a huge number of modern day conveniences… and it’s spurred a lot of innovation.

For example, one in six homes now have a monitored security system. In the past, security systems communicated with monitoring stations over a landline.

But now over 26% of households no longer use landline phone service.  And this next company is poised to take advantage of the disconnect.

 

QUICK FACTS

Ticker                                      WRLS

Industry                                   Technology

Recent Price                            $5.70

Market Cap                              $86.8 m

Shares Outstanding                  15.1 m

Average Volume                        21,138

Dividend Yield                           7.0%

Website                                   http://www.telular.com/

 

COMPANY DESCRIPTION

Telular (WRLS) has two primary product lines. The majority of their revenue comes from their Telguard services. But they also have a side business called TankLink.

Standard home and business security systems use landlines to communicate with a central station.  If a security alarm is tripped details are sent to the alarm monitoring company.  They’re then able to contact the homeowner and police.

Here’s the problem… More and more people are installing home and business security systems. But fewer and fewer people use landline telephones. That’s why Telular stepped in with a little gadget to facilitate wireless security connectivity.

If an alarm is tripped, a signal gets sent to the cellular network. Then it heads to Telguard’s own communication center. From there the homeowner and emergency personnel are contacted.

Their side business, TankLink, monitors product levels in storage tanks. They primarily market to the petroleum, propane, and chemical industries.

 

FINANCIALS

Sales revenue for the company’s most recent quarter was up 22% year over year. Their service revenue, which accounts for over 60% of total revenue, was up over 13%.

Despite the healthy increases in revenue, Telular’s expenses have remained steady. Their cost of products sold went up by a nominal amount… and service costs are actually down 6% year over year.

What’s more, the company has now had 19 consecutive quarters of profitability.

And last quarter, Telular’s net income more than doubled from $960,000 last year to $2.03 million this year.

 

KEY METRICS ANALYSIS

Trailing P/E                                       2.3 x

Price / Sales                                     1.7 x

Return on Assets                               6.2%

Insider ownership                              10.8%

Short Ratio                                       1.3 x

Current Ratio                                     3 x

Total Debt To Equity                           N/A

 

RECENT EVENTS

In January of this year Telular acquired SMARTLogix. They were the largest value added reseller of Telular’s TankLink systems.

The purpose of the acquisition was to obtain direct relationships with SMARTLogix’s 400 end-user customers. The company can capture a bigger portion of the profits.  Telular also decided to leave the SMARTLogix veteran sales force intact.

The initial price of SMARTLogix was $6 million. Although the company could get another $2.4 million in the future if they reach performance goals.

Telular’s management predicts SMARTLogix could add $2.6 million in revenue and $1.4 million in net income going forward.

 

MANAGEMENT TEAM

Joseph A Beatty – President and CEO

Jonathan Charak – VP and CFO

George S Brody – Sr VP and GM of Telguard segment

Jerry Deutsch – Sr VP Manufacturing and Operations


STOCK ANALYSIS

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

WRLS’s 52-week low was $2.33 and the 52-week high was $8.90.  Right now the stock is trading at $5.70.  The 50-day moving average is near $6.15 a share and the 200-day moving average is at $6.45.  The company has a market cap of $86.4 million and 15.1 million shares outstanding.

 

 

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Big Money, Big Growth, And Lots Of Copper!

We’ve been covering a lot of China stocks recently. In terms of value it’s hard to beat some of the asset rich Chinese companies. The most important factor for many of these companies though is growth.  As we all know growth has slowed considerably in the US and a bit in China.

But China has been a manufacturing machine for a while now.  Many of those companies are still expanding rapidly which is creating a ravenous demand for materials… and it doesn’t show signs of halting.

 

QUICK FACTS

Ticker                                      LIWA

Industry                                   Copper

Recent Price                            $6.13

Market Cap                              $182.48 m

Shares Outstanding                  29.8 m

Average Volume                       93,056

Dividend Yield                          N/A

Website                                  http://www.lihuaintl.com/

 

COMPANY DESCRIPTION

Lihua International (LIWA) manufactures copper products. Their four main lines are copper anode, pure copper wire, pure copper rod, and copper-clad aluminum wire.  Most of these products are purchased and used by other businesses in their products.

The company gets a lot of their copper from a proprietary recycling process.  Lihua says this process is more cost effective than using newly minted copper.  What’s more, the purity of their recycled copper actually exceeds government and industry standards according to management.

Just last year, the company doubled their copper recycling capacity to 50,000 tons annually.

 

FINANCIALS

Year over year revenue in Q2 saw a massive increase. Over 121%, to $92 million!   Best of all, the company’s net income is up over $4 million… a huge 45.9% increase.

One reason profits aren’t growing as fast as revenue is product mix.

The company began manufacturing copper anode in August 2010. There’s obviously a lot of demand for the product, as it accounts for 44% of their revenue just a year into production.  The downside is anodes are a lower gross margin product.

In Lihua’s Q2 conference call management made their case for the anode business. It has a short production schedule and cash conversion cycle. Despite the lower gross margin net income is actually going up. It’s more cost effective than investing similar assets into their higher margin wired products.

Plus, you can’t argue with the demand.

 

KEY METRICS ANALYSIS

Trailing P/E                                       3.9 x

Price / Sales                                     0.3 x

Return on Assets                               22.5%

Insider ownership                               54.7%

Short Ratio                                        7.5 x

Current Ratio                                      8.2 x

Total Debt To Equity                            1.3

 

RECENT EVENTS

In late June the company received an environmental import license from China’s environmental protection ministry. Importing scrap copper for recycling is surprisingly cheap.

The company estimates $150 per ton savings on imported scrap. It’s certainly a good way to start lowering the cost of goods sold.

Despite doubling their recycling capacity last year, it’s not enough.  So at the end of 2010 they broke ground on another plant. That facility, slated to begin production in Q4, will again double capacity. From 50,000 tons to 100,000 tons annually.

 

MANAGEMENT TEAM

Jianhua Zhu – Chairman and CEO

Yaying Wang – COO

Roy Yu – CFO

Daphne Huang – EVP of Corporate Finance and Director of Investor Relations


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

 

LIWA has been trading around its 50-day moving average for the past couple of months.

LIWA’s 52-week low was $5.19 and the 52-week high was $13.05.  Right now the stock is trading at $6.13.  The 50-day moving average is near $6.96 a share and the 200-day moving average is at $7.76.  The company has a market cap of $182.4 million and 29.8 million shares outstanding.

 

 

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A Golden Opportunity For Gold!

Gold prices are going crazy, and it’s only going to get better.  The threat of inflation, currency collapse, and the potential end of the EuroZone will all push gold higher.  It’s the “go to” investment for safety these days.

This week we’re looking at mining and mineral stocks. Here’s a small gold producer you should take a look at.

 

QUICK FACTS

Ticker                                      JAG

Industry                                   Gold

Recent Price                            $6.18

Market Cap                              $521.4 m

Shares Outstanding                  84.4 m

Average Volume                       425,283

Dividend Yield                          N/A

Website                                  http://www.jaguarmining.com/

 

COMPANY DESCRIPTION

Jaguar Mining (JAG) primarily operates in the Brazilian state of Minas Gerais. They own and operate three mines in the ‘Iron Quadrangle.’ That region has a renowned greenstone belt, which often contains gold, silver, copper, zinc and lead.

They produce gold at the Turmalina, Paciência and Caeté mines.

Jaguar has also been exploring in the state of Maranhão where they control 293,000 acres.

How good are their operations?  Consider this… they sold 40,184 ounces of gold in the second quarter of 2011.

 

FINANCIALS

Jaguar is in the middle of a financial turnaround. Their revenue in the first half of 2011 was up nearly 50%.

Their adjusted net income improved from a loss in the first half of 2010 to profits of $17.4 million.  And their operating cash flow is up approximately 207%.  Talk about a turnaround!

Before the turnaround this company had some issues with efficiency and middle management. It looks like their focused effort on fixing these issues has paid off. Despite unfavorable currency conversion rates the company still managed to cut costs at some of their mines.

For example, at their Paciência property each ounce of gold cost about $700 in Q2-10. Jaguar’s got that down to $637 in Q2-2011.

The other obvious boost to this business is the price of gold. Jaguar’s ‘Realized Gold Price’ was $1,148 in the first half of last year. This year it was $1,447.

Couple that with their 18.5% increase in ounces sold and you’ve got a pretty rosy outlook.

 

KEY METRICS ANALYSIS

Trailing P/E                                       N/A

Price / Sales                                     2.6 x

Return on Assets                               N/A

Insider ownership                               3.25%

Short Ratio                                        8.6 x

Current Ratio                                     2.4 x

Total Debt To Equity                           N/A

 

RECENT EVENTS

Jaguar has been working towards establishing the Gurupi project and mine. Located in the northeastern state of Maranhão, it’s expected to produce nearly 150,000 ounces annually.

They’ve got a 30,000 meter exploratory hole being drilled. They’re also working on dragging a glorified extension cord out to the property. Not to mention the tiny village they had to relocate.

That all may seem like a lot of work, but it hasn’t stopped other companies from envying the property. According to management, Jaguar’s been approached by potential investors who want in on Gurupi. Management’s considering the offers as a potential option for additional funding.

 

MANAGEMENT TEAM

Daniel R. Titcomb – President and CEO

James M. Roller – CFO

Lúcio Cardoso – COO

Adriano Luiz do Nascimento – VP of Exploration & Engineering


STOCK ANALYSIS

 

 

 

 

 

 

Chart Courtesy of StockCharts.com

This stock tends to bounce around a lot. But the fundamentals have really improved over the past year and a half. And the Gurupi project looks like it could be a big win once it starts producing. If gold prices continue to stay at this inflated level this company is going to have some great results.

TC’s 52-week low was $4.11 and the 52-week high was $7.90.  Right now the stock is trading at $6.18.  The 50-day moving average is near $5.39 a share and the 200-day moving average is at $5.16.  The company has a market cap of $521.4 million and 84.4 million shares outstanding.

 

 

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