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!

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!

No comments:

Post a Comment