Value Investments can be hard to find. The companies that I will profile are all from big emerging economies such as China, Brazil, Indonesia, and Malaysia (to name a few). They are all real companies with consistent and growing revenue streams that have had valid audits. Let's find them together!

Friday, August 12, 2011

Review after the last Couple Heated Weeks

The last few weeks have made this market make anyone want to pull their hair out.  The swings are bigger than the PGA.  As I have been on a hiatus from writing, I figured this would be an excellent time to weigh back in on the stocks I have been following.

Let's start with Asia Carbon Industries, ACRB.  While their price has dropped ever so slightly, this is still such an unheard of diamond in the rough!  They should be reporting Q2 earnings in the next couple of days and I am guessing that they will be incredible!  From what I understand, their revenues are only rising!  As the American Markets are choppy (understatement) perhaps Goldman Sachs was right and the second half of the year will be invest in China.  With an expedited rise in the yuan and the dollar quickly losing, Chinese stocks should no longer be avoided.  Keep an eye out for the earnings report from ACRB and see what happen!

Be in touch!

Monday, July 11, 2011

Goldman Sach's Bullish on China

Jim O'Neill, the Chairman of Goldman Sach's Asset Management came out today on Fast Money and discussed his view of China's inflation. 

A couple of Chinese stocks that will continue to rise as the Q2 financials are: BioStar Pharmaceuticals and Asia Carbon Industries. 

Asia Carbon Industries, ACRB, has continued to have a low value due to low volume.  This company is booming!  Look at ADA-ES (ADES) a comparable American coal company that has gone up over 50% over the last 30 days.  Now, I understand that this gain is due to data:

"8:34AM ADA-ES Provides Update on Refined Coal Activities; JV expects to install and commence operating the remaining 11 planned RC facilities in the fall (ADES) 15.23 : Co announces it successfully completed first year of operation of two refined coal facilities. The First of 16 planned new facilities successfully placed-in-service and passed emissions qualifications. The next four facilities are scheduled to be installed in July and August at plants burning an aggregate of approximately 10 mln tons of coal per year. Co's JV expects to install and commence operating the remaining 11 planned RC facilities in the fall, and is establishing schedules with customers in support of that goal."

ACRB is continuing to increase its production as well, but has little following and isn't getting much exposure.  Once it does, it will gain substantially!

Friday, July 8, 2011

Watch for Friday

Two Chinese based NASDAQ stocks were among the top gainers yesterday, China Auto Logistics Inc. and ChinaNet Online Holdings, Inc.  They are both continuing to rise in trading here this morning and will continue to go up as they both have solid numbers supporting them. 

China Auto Logistics Inc. catches my eye since it directly uses another company's products, Asia Carbon Industries (ACRB), that is still severley undervalued.  China Auto Logistics Inc. is a luxury automobile company whose sales have been rapidly growing since 2009.  According to their website 25%+ a year since then. 

A curious happening with their stock as well as CNET, both were trading at double where they are now not more than 90 days ago!  With the amount of scared investing that happened throughout Q2, people are starting to get back into the grossly undervalued stocks, like these!  As more of the real firms with well kept books continue to report earnings and file with the SEC for Q2, watch as they should gain more investment. 

Look into ACRB, BSPM, CALI, and CNET to grow as they continue to attract attention with their growth!

Tuesday, June 28, 2011

Rio Tinto: Steeling the Future

Rio Tinto, who I have talked about before is continuing to expand and grow.  As we head to the end Q2, it seems as if their expansion into other continents as (Australia and Europe) should show an increase in profits on the year thus driving their stock price higher.  It looks like it will break 72 a share as it is already shooting to 70.  Depeending on how well they are above expected in earnings, we could see a new 52 wk high here in the next few weeks!

Keep in touch!

Friday, June 24, 2011

Helpful Hedge

In light of Fed Chairman Ben Bernanke's comments earlier this week, I have been thinking a bit about what it means for the U.S. and its markets.  Wednesday's report given by "Big Ben" was nothing short of ominous and lethargic in my opinion.

As now the outlook has slowed to a growth rate of 2.5% per year and we are still seemingly light years away from unemployment being back down around 5%, investors need to start thinking about how to hedge their investments so as not to get bogged down and can still gain in a stagnant market.  Emerging Markets offer a greater growth potential as these countries are still growing at an expected 10% a year. 

The Fed resisted dumping another $600 billion into the market mimicking what they did last August. it shows that the U.S. has entered a time when the market needs to get back to standing as opposed to being propped up.  While, this is the best thing we could hope for, (as no one wants a market propped up by anything other than the free hand) it is going to be painful and slow going for the next few years as the market regains its walking strength before it can run.

Investing in emerging markets will produce a hedge against the short term U.S. economic state.  Look to China, Brazil, and India to lead this charge into the next few years. Many analysts have been coming out with rave reviews of Emerging Markets and the growth that they offer.   It would be wise to follow suit as we go into the Q2 earnings reports.  Keep an eye on VALE S.A., Asia Carbon Industries, and BioStar Pharmaceuticals. All three should have better than expected Q2 earnings and thus help drive the stock price up. 

Buy these stocks now and see what happens when they report!

Thursday, June 23, 2011

Questions Raised

I was listening to Business for Breakfast on 1060 am the other morning locally here in Denver and Tom and Woody were discussing a stock RYUN  Respect Your Universe.  This stock has been growing pretty steadily yet I can't find much of anything as to what they should actually be valued? 

RYUN posted no income in 2010 and took a lose in 2009?  They have a negative EPS based on ttm and for some reason have a rising stock price?

Is everyone banking on a Dana White type explosion with this MMA clothing brand?  While the MMA sport is growing rapidly and has taken the world into its grips as the action packed bloodsport that it is, most clothing companies that go public, outside of Ralph Lauren trade at most around $5 a share.  A similar clothing line that is public to look at would be Quiksilver (ZQK) since Tapout and Affliction (the two major clothing lines for MMA are privately held).  I chose Quiksilver since it is along the same vein as far as active sports.  Quiksilver has been around and is a leader in the surfing and skating industry for clothing. 

Outside of "well, this company should perform based on the rapid growth of the sport it is a part of" does anyone have a solid argument for why this is a good investment?  Let me know!

Wednesday, June 22, 2011

Another Rave Review about Chinese Investment Possibilities

One of the blogs I follow posted this up yesterday.  Its a first hand look at what I have been talking about.  Investing in China is a smart move.  It's an even smarter play if you get into the undervalued companies that are out there such as Asia Carbon Industries (ACRB), BioStar Pharmaceuticals (BSPM), and A-Power Energy Generation Systems (APWR). 

These companies lay in the realm that Hanson of the Motley Fool ( is talking about in his article.  These are real, innovative companies that have solid profits.  Money finds value, its only a matter of time before these stocks prices will reflect each companies actual value.  I suggest getting in now!

Remember, it's buy low, sell high!

Monday, June 20, 2011

Commodity Time

An article came out in the WallStreet Journal explaining how China has been investing hard in South America for agricultural reasons.  Basically, China knows that its urbanization is displacing some of the farmland that exists there and needs to support its populous with food from other countries.  Brazil and Argentina are the biggest recipients of more than 15 billion dollars for foodstock and raw materials for manufacturing.
In other words, China is expanding and looking to put its dollars into tangible goods now.  Why?  In my opinion, its due to a weakening Dollar on a global level and while the yuan is still pegged to the Dollar. China should get rid of their dollars, then let the yuan appreciate.  I say this knowing full well that it is a poor decision for China as all the American debt they bought will then be worth less than if they leave it attached to the dollar as it is now.
As an investor, look to invest in the Chinese companies that are growing and expanding.  The inverse is true to happen for investors in Chinese companies with American Dollars. Now is the best time to invest!

Thursday, June 16, 2011

Thursday Moves

Rio Tinto is making some moves as they announced that they will buy a in Riversdale Mining from Indian based Tata Steel.  I talked a little about Rio Tinto in a couple weeks ago and think that they are going to rise a bit back towards their 52 wk high of $76 over the next few months. 

On he flip side of this deal, I see Tata Steel (traded in Mumbai) to lose some ground.  While they may have a bit of a windfall for the buyout, they lose a stake in a solid mining operation in Australia.  As for Riversdale mining, Its expected to get delisted. 

On a slightly different topic, buy Asia Carbon Industries.  Remaining extremely undervalued, this will not stay this way for long.  As we quickly approach the end of Q2, ACRB is going to explode when people again see dazzling numbers that HAVE BEEN audited.  I have been consistently buying shares as this company is primed to jump!

More soon!

Wednesday, June 15, 2011

Bullish on China

An article from the WSJ yesterday discussed that while some Chinese companies have made investors scared to test the waters, there are those that remain worth it.  Guerilla Capital's Peter Siris makes it well known that he thinks while there are some issues in some Chinese firms, the fundamentals of some of these companies do not lie.

When I look at various single companies, I check to see that they are in SEC compliance, have become listed through a scrutinized process, and have real revenue and real profits.  As long as these things are consistent, there is not a need to lump all of the companies together.  Using glittering generalities to encompass an entire group of companies doesn't work, such as Chinese companies suffer from poor accounting regulations.  While there are some that do and some that don't is the more prevalent trend, some is not all. 

I think that if you look into where you put your money and do some due dilligence, then investing in China is not only smart, but a move that should be made in order to row you own personal wealth.  Ideally, every investment you make is safe since it must pass through some part of the SEC and there are normally others involved. 

In reality, investments need to be chosen like buying a house and then held onto so that the market as a whole will see the value in the company that you have found, like turning coal into a diamond.

More soon!

Tuesday, June 7, 2011

Iron Ore Producton Down Under

The steel industry is continuing to prosper worldwide.  I have touched on Brazil's VALE S.A. inn an earlier post and I still like this company to produce solid profits this year.  A rival in Brazil, Rio Tinto is also traded here in the U.S. but does not seem to carry the same amount of under value as VALE.

However, Rio Tinto is the worlds 2nd largest Iron ore mining house in the world and hopes to hit an output of 240 million tonnes this year.  With commodity prices rising to over $170 per tonne for Iron, low side that would mean revenue of over 40 billion compared to that of 39 billion last year.  Granted those numbers are gross are do not take into account the spending on expansion in Australia to help increase output for the next few years. More on this here.

Either way, these two mining conglomerates should stay on your radar as both are trading below where they should be.

Monday, June 6, 2011

Clean Coal

The week is starting off slow in the market as the DOW and NASDAQ were both down. One of the big movers today was a Colorado based, clean coal company ADA-ES Inc.  Here is a US. based company that appears to be undervalued at present.  (With the inclusion of the 50%+ gain today). ADA is a leader in clean coal energy.

Another undervalued stock in a similar arena is Asia Carbon Industries, who I have talked about before. It gained slightly toady, a modest 2% and should continue to rise.  I would strongly suggest getting into this stock now as it looks to move up soon! 

The idea is buy these two stocks now!

Saturday, May 28, 2011

Inflation and the Chinese Domino Effect

Societe Generale released a report entitled "The China Domino as Fallen" in which analysts describe three main points:

  • Domestic inflation: China is switching to a consumer driven economy which means more domestic demand. Supply remains constant, so prices rise.
  • China exports inflation:  Chinese demand for oil and steel has pushed prices up in those marketsand made other commodities rise as well.
  • China demand shock: The country's long-term economic re-balancing will result in a permanent increase in global demand. Supply is sticky, and it will take time for it to catch up, thus limiting the world's ability to cope with this rise in demand. 
My take on these points are:
  • Domestic Inflation: China is switching to a consumer driven economy which means more domestic demand and supply will rise because of it.  Prices, while they may go up, will be pushed back with more production to meet these demands.  As far as China is concerned, their domestic inflation would be more tied to a failing dollar (which the yuan is locked onto) than an inflationary mark due to demand.
  • China Exports Inflation:  China's entrance into the higher demand category when it comes to oil and steel is only natural for a developing country. In a global market, more demand means higher prices for limited commodities.  As the prices are driven higher, smaller countries will get squeezed and those who cannot afford to pay the higher prices will fall out and then prices will trend back down so they can buy.  In essence, as "Emerging Economies" grow and stabilize, prices for everything globally will go up.  Standards of living increase as wages increase as prices increase.  If your dollar is only worth a dime in 10 years then shouldn't you be making $10 to $1 in the next decade for your own production as well?
  • China Demand Shock: "The country's long-term economic re-balancing will result in a permanent increase in global demand. Supply is sticky, and it will take time for it to catch up, thus limiting the world's ability to cope with this rise in demand."  I DO NOT agree with this.  The world and global markets will be able to cope with the rise in demand just fine.  As higher demand is what the world needs.  The question becomes, where is the offsetting production to pay for the new demand? If there is simply continued money printing and credit use to pay for the demand, while fine for the short term, it needs to be reinvested and thus creating more production or supply to meet the demand.  China will be able to keep up with itself as it grows.  We need to be looking there to help pump some of our own capital in so when the rise, our capital also grows.  
That's my take, what's yours?

Wednesday, May 25, 2011

SRA Convention in San Francisco

The 7th Annual Spring Growth Stock Conference hosted by Security Research Associates, Inc. was held yesterday (5/24) in San Francisco.  34 different stocks had presentations from their respective CEOs, CFOs, and Business Developers.  One of the stocks was who I have been highlighting, Asia Carbon Industries, presented.  For a full list of those who presented, click here

A colleague of mine was in San Francisco for the event (doubt he had a flower in his hair, but maybe) and I spoke with him on the phone after the presentation and breakout session. His take from the event:

1-     There were a group of investors trying to figure out how to slowly buy up the float.  The lower end sales that have caused the price to drop recently needs to get bought out in full so the stock can really run.

2-     The company story of Carbon Black for tires in China was compelling.  It is almost a “boxed” market. They have solid business already and are continuing to beat out any competition.

3-     He was very impressed with the net income gain achieved by adding “wet production” to the process.  Almost 44% of total revenue. (Talked about that a bit a couple weeks ago)

4-     He left feeling that it was not if, but when ACRB will start rolling.  At current earnings of .04/share for 1st Qtr he sees the possibility of 0.16 or higher/for the year 2011.  He’s still trying to figure out a multiple.  Maybe 12 – 18 is about right, which  puts the stock around $1.92 to $2.88.  

I agree and have been talking about this for the last couple of weeks.  It's always nice getting some corroborating support!  We will see how this plays out but I'd get in this now, before it takes off!

Tuesday, May 24, 2011


As talks of Alternative energy are ever present in the world, Asia is no different and growing very rapidly in this arena.  One of the companies that I have been looking into was just profiled Friday on Motley Fool.  A-Power Genertion Systems (APWR) fits as an undervalued stock.

Alternative Energy continues to be a hot topic and is gaining traction in the market. Founded in 2003 and working mainly in China, APWR produces distributed power generation and micro power grids as stand-alone facilities to help power the steel, chemical, ethanol, cement, and food industries. They also make automatic control systems to monitor the performance of equipment in the system, including the boiler, turbine, generator, grid supply, and demand and distribution, as well as space and water heating functions. Also, it manufactures and sells wind turbines and equipment for manufacturing PV cells and solar panels.  These make it a viable candidate to do extremely well in an emerging market. 

As APWR continues to grow it is involved in a JV with GE developing gearboxes that hit the market this past quarter and are finalizing a deal for a wind project in Texas.  Keep an eye on this one as it should be trending upward soon!

Thursday, May 19, 2011

Chinese Auto Industry

Something I have been looking into recently is the Chinese Auto Industry.  I was led to this based on a few of the new companies that I have been looking over and trying to figure out the various avenues that have spurred their growth.  The car industry in China is growing at a very rapid rate and they are consistently looking to expand.  Currently there are $1.9 million cars sold in China each month.  That compares to $1.2 million cars per month in the US.  In 1990 there were 5.6 million cars.  In 2010 there were an estimated 91 million vehicles.

In Q1 '11, a report by the Chinese Association of Automobile Man
ufacturers finalized their sales at an increase of 13.81%.    If this trend keeps up, they will crush the U.S. in auto sales this year by almost 40% or more.. 

I followed this trail some more and found China has made efforts to purchase Saab and is looking to buy more in the European auto industry, and has manufacturing plants opening in its country for Ford   (transmission building plant).  Suppliers are looking at how to expand into the local auto manufacturing as well since they own about 40% of the market compared to international sales.

Geely Automakers has already bought out Volvo.  While this happened in '10, it will be something to watch moving forward as they will have a full year with Volvo in '11.

One thing that jumps out to me is the thought that these automakers may get left out of the Chinese markets; whereas they are going to be bought by Chinese companies and will then have all the access they need.
A couple others: BYD (Warren Buffet's choice), DongFeng Motor Group, and Brilliance Automotive

Note: these trade in Hong Kong

Wednesday, May 18, 2011

New Companies!

Looking forward, keep your eyes on ACRB as they are going to start rising on their continued growth.  I recently got my hands on a list of Chinese companies that are traded here in the US and am going through it trying to pull some of the gems out of it.  Some of these are obviously known which would not make them hidden gems at all.  If you know of any of these types of companies coming out of other emerging economies please let me know and I will do my best to highlight them and put my own analysis into each one.

Something to chew on while I wade through the new information I just got my paws on, read this.It is intriguing that Goldman Sachs is thinking similarly to most of the people I talk with. . .if the buzz is starting that Chinese companies are going to buzz through the second half of 2011, I would suggest following my lead, as well as others, and get in now at lower prices before the undervalued become market value. 

Tuesday, May 17, 2011

Asia Carbon Industries: A deeper look

I have been comparing Asia Carbon Industries latest earnings report to their 2010 financial statements and only see great improvement and a continuing trend in growth an revenue.  It seems that they are one of only a few Carbon Black producers in China and one of the few public company's in the world that produce this compound.  Their revenue was up 154% in Q1 2011 vs Q1 2010 and that was with 10 days of Chinese New Year's.  This little known gem is quickly gaining market share in China's growing auto industry as Carbon Black is used in reinforcing tires.  They posted a $0.04 EPS for Q1 '11 whereas they on posted a $0.07 EPS for all of 2010.  4 cents of that came in Q4 after they switched from a dry to wet process. 

One of the many things I looked into was how well this company presented their accounting or what they did to help  keep clean books.  According to a statement from CEO, Yao Guoyun, ACRB went public through a Form S-1 rather than a reverse merger.  More from that article here

Pretty much, Asia Carbon Industries checks out as a safe, growing investment opportunity.  It is insnely undervalued and will allow for 2x, 3x  growth in the next 12 mos.  They are continuing to develop and will show continued profitability as time goes on! I would suggest getting in now while it is so low!

Monday, May 16, 2011

Asia Carbon Industries posted 10Q

Asia Carbon Industries posted its earnings for Q1 today!! It looks, at first glance, to be fantastic as expected.  The price dropped to $0.80 before this was released. I retrenched my position at such a ridiculously low price and am going to continue to do so as this company is primed to run.  I'm going to do some more investigating on this!  Any comments from the crowd?

Thursday, May 12, 2011


Investing in foreign markets is a smart play right now.  I have been profiling companies that fall into the categories that are described in this article from WSJ

In business, looking for new revenue streams is always on the forefront of the investigative process.  Whether this is done by manufacturing a new good to be sold, innovation of new technology, branching into similar markets or vertical integration of an industry; keeping your business growing can present a number of obstacles and opportunities.  This is no different when it comes to investing.  Diversification always seems to be the biggest buzzword used when discussing investing ideas.  Finding profitable companies in other countries should be an idea that you need to consider.  There are great companies that just need to be found.  While they may not lead to “get rich quick,” they can lead to growth for the future.  In a time where nothing is certain, the value of investing in an emerging economy is less risky and less volatile than most other investments.  With continued global levels of living conditions rising, the smart investors are looking to these countries hoping to cash in on their progress.  If only we had all invested in tech stocks in the ‘80s (I was born then, people have invested in me for a decent ROI in my opinion). 

If you, as an investor, look to emerging economies and can find companies that are generating profits and growing, it only makes sense that they will continue to do well and prosper as their respective country moves upward. Looking categorically at developing sectors such as Manufacturing, Mining, and Healthcare makes these all the more enticing plays!

I continue to pound the table on ACRB, BSPM, VALE, and ONP
As a final thought and preview of things to come, read this

Tuesday, May 10, 2011

Super Value: China's Healthcare Sector

Healthcare is a worldwide industry.  I started looking for a low valued BEE (Big Emerging Economy) stock in the Healthcare industry.  I found BioStar Pharmaceuticals (BSPM).  Coupled with the article explaining China looking at shifting their economy to a domestic base vs. and export base, investing in China makes even more sense since their domestic population is literally 4x that of the United States.

BSPM is undergoing some changes at present that will cause the stock price to rise in my opinion.  About a month ago, they appointed a new CFO as their old one stepped down for personal reasons.  As anyone know, a change in CFO is a “shoot first, ask later” offense, and BSPM acted accordingly, on a shallow sell off.  While their stock price has trended downward for the last year, their financials support a much higher price.  They were featured at the end of March on, but again a lack of following has caused this stock to become undervalued.  With an EPS of 0.63 cents and an outlook that is very aggressive; BSPM should start regaining some of its previous stock price.  It seems that anytime anyone buys this stock it shoots up for a large gain and then falls purely on volume.  The last time I can think of seeing stock this undervalued was in January of ’09 when Apple was trading for $82 a share. . . .we all know where it is now.

While I don’t know, or think, that BSPM will go to $350, it very well could rise at least 2 or 3 times current levels.

According to their website, their number one selling drug  helps fight Hepatitis B, which affects 10% of the Chinese population. (Roughly 120 million people or 1/3 of the United States population)  They also manufacture and sell various nutritional supplements and a few other OTC drugs.  Their drugs are patented and they continue to do research while their market share and revenue increases.

I’m left scratching my head.  I will continue to investigate this for the next few days.  More to come soon!

Thursday, May 5, 2011

Undiscoverd Gems

Undiscovered gems are stocks that have solid management, consistent past revenue and a growth potential formula.   These are the factors that will drive “undiscovered gems.” In today’s market, these companies are hard to find in the U.S.  The A.P. released a story yesterday talking about the lopsided chances of U.S. based companies operating in China and vice versa.  They talked about "imbalance of opportunity" citing China's "opaque government regulations and poor enforcement of patents and other intellectual property rights indirectly discouraged foreign investment".  China refuted this story today. Talking about how they want to be "more open to foreign direct investment".  I believe that Chinese companies are operating under “controlled capitalism and have access to less expensive natural and human resources allowing them to compete with any company in the world.  If these companies are listed in the US, Singapore or other free market exchanges all the better for us.

I mentioned ACRB on one of my last blogs.  They posted a $0.04 EPS in Q410. This $0.04 was included in the total  $0.07 EPS for Yr 2010.  That’s 57% of 2010’s earnings.

I did some checking as to why there was such a disconnect and found that they switched their processing from dry to wet which allows them to better control output and make their product better, quicker, etc.  I’m not sure of the science behind processing coal, but if that’s what their science says and their books follow suit, the wetter the better!  I guess, moving forward, it seems that their Q1 report will show if this switch will be the catalyst for an ongoing rise.

Bringing it back to the top and “undiscovered gems,” a few companies to keep your peepers locked on ACRB, VALE (a Brazilian Steel Manufacturer),  and VLCM (US stock. . .I ride a volcom deck)

I’ll keep you posted!

Monday, May 2, 2011

Changing Your Thinking

Investment opportunities can be found all over the world.  A majority of couch traders (like myself) struggle to find great buys in the market.  That makes it tough to always be in on some of the screaming deals for undervalued equities that are out there.  Recently, I have turned my eyes to emerging markets and what some of their companies offer.  These seem to offer higher growth rates than a penny stock but still have limited risk based on the amount of exposure you will undertake.  If the object is to buy low and sell high, then the investment ideas I find should benefit you greatly!

Most of the companies I have found so far  trade with low volume. This is a combination of entry into American trading exchanges coupled with low public knowledge and/or awareness. Once these companies establish a trading following, these prices could rise 2x, 3x, 4x, or more.

If the assumption "that investing in foreign companies is bad for the USA" is rolling through your mind, this notion, while valid, has limited value to a true investor.  Most companies, wherever they are based, operate and trade on a global level in all aspects from retailing to manufacturing. Ascribing to isolationism as a rule for trading will significantly diminish your bottom line.  This trend is not visible in the high performing funds we all try to mimic so why not trade all over the world? Do some analytics.

Here's one of my finds: Asia Carbon Industries
Ticker Symbol: ACRB

More coming soon!