Hot Penny Stocks – Longwei Petroleum Investment Ho (LPH)

Earnings season continues in a big way. This week there are more than 110 S&P 500 companies announcing earnings.

On Tuesday Apple (AAPL) released earnings for the quarter ended on December 30 2011. The company had a 73% increase in sales year over year. Also reporting this week are tech companies Netflix (NFLX) and Yahoo (YHOO).

Keep an eye out for earnings from car manufacturer Ford (F) and fast food giant McDonalds (MCD).

 

QUICK FACTS
Ticker                                  LPH
Industry                               Oil & Gas Refining & Marketing
Recent Price                       $1.48
Market Cap                         $150.1 m
Shares Outstanding            100.8 m
Average Volume                  383,333
Dividend Yield                     N/A
Website                               http://www.longweishihua.com

 

COMPANY DESCRIPTION

Longwei Petroleum is a wholesale petroleum distributor in China. The company’s operations include buying, storing, transporting and selling oil and gas.

The company has two storage facilities in Shanxi province. The storage depots have a combined capacity of 120,000 metric tons. Longwei is the only licensed large scale intermediary in the city of Gujiao, where one of their storage facilities is located.

There are a variety of demands in Shanxi ranging from retail to industrial. Longwei’s clients include coal mining operations, power suppliers, and large, small, and independent gas stations.

The company also owns two retail gas stations and acts as a purchasing intermediary for other Shanxi industrial interests.

 

FINANCIALS

LPH’s most recent quarterly numbers were released on November 9, 2011. 

The company reported revenue of $118.6 million in the quarter. Up from last year’s third quarter revenue of $113.3 million. This is an increase of 4.7%.  Longwei Petroleum also reported a net income of $17.8 million… an increase year-over-year from a net income of $4.9 million.

As of September 30, 2011, the company reported $2.9 million in cash and no long-term debt.

 

KEY METRICS ANALYSIS

Trailing P/E                              2 x
Price / Sales                            0.3 x
Return on Assets                     23.3 %
Insider ownership                    66.6 %
Short Ratio                              1.3 x
Current Ratio                           22.7 x
Total Debt To Equity                N/A

 

RECENT EVENTS

Longwei put out a year end update in early January 2012. The company announced that it put $86.3 million towards the acquisition of an additional Shanxi province facility. The northern Shanxi fuel storage depot has a capacity of 100,000 metric tons and a total purchase price of $110 million.

The company last added storage capacity in 2009 with their 70,000 ton Gujiao facility.

 

MANAGEMENT TEAM

Yongjun Cai – CEO
Michael P. Toups – CFO
Yongping Xue – Secretary, Treasurer, Director
Dora Dong –  Director

 

STOCK ANALYSIS

 

 

 

 

Chart courtesy of stockcharts.com

 

LPH’s 52-week low was $0.82 and the 52-week high was $2.79.  Right now the stock is trading at $1.48.  The 50-day moving average is near $1.32 a share and the 200-day moving average is at $1.26.  The company has a market cap of $150.1 million and 100.8 million shares outstanding.