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!