$EAR $CCGY $BSPM Expansion for Free
- 24 Comment
I must be crazy. I only buy for one reason. When asked what that reason is, I say, “Because it doesn’t make sense not to.” I’ve got 3 companies trading at ridiculously low multiples of my calculated future earnings a couple years down the road. These low prices indicate that investors find the opportunity unbelievable.
The investing world must be tone deaf as they are unable to hear the battle cries of HearUSA (EAR). All of my research suggests that there’s a storm brewing that is going to take HearUSA to higher highs. After talking to the company, I’m biased to believing that their estimates are of the “easily beatable” variety. But then again, I also am disregarding analyst reports on the company as they seem rather uninformed and don’t include any of the big upside that I’m seeing. There are two speculative catalysts to consider that I will mention briefly.
1. HearUSA’s innovative relationship with AARP seems like lighting off fireworks in the dark. The fuse is lit. The question is: How big of an explosion are we going to see?
2. Siemens AG recently reported that they are open to a sale of its hearing aid subsidiary; valued at $3.7B by Mark Troman of Bank of America Merrill Lynch. Note that HearUSA’s Siemens debt is self-liquidating. Don’t you think that whoever is interested in Siemens AG wants a distribution channel?
China Clean Energy (CCGY.OB) just finished the completion of its Jiangyin plant which can be used to produce biodiesel and specialty chemicals. This should expand capacity at triple digit percentage rates (xxx%). It’s also my opinion that this company is making money that disappears off the income statement due to warrant liabilities. I can’t find any reason not to own, and so I do.
A Chinese pharmaceutical company, Biostar Pharmaceuticals (BSPM.OB), is looking to expand its supply network from 1,320 sales outlets to 10,000 sales outlets in the next 2 years and has recently received several approvals from the local government to move forward with their business. I’m expecting upside surprise going into the next quarter.
One thing I will point out on these last 2 is that the ChiNext, China’s new Nasdaq-style stock market, just opened up with P/E ratios 50+. In those instances, you are paying for the growth. In the companies I’ve mentioned, the prices that the companies are trading at suggest that growth would be a surprise. In this way, you can make uncertainty work for you and get growth for free.
So there you have it. Buy when it doesn’t make sense not to. Bells and whistles should be going off when you can get crazy expansion on the cheap, but sadly most people that play the market get afraid to buy shares of ownership at lower prices and would rather pay ‘top dollar’ as Mike from Hawaii would put it. Pay a little, get a lot. If you’ve been following me — you know the drill by now. Do not lose.
Disclosure: Bradford was long HearUSA, China Clean, and Biostar at the time of publication.
24 Comments on this post
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Todd said:
Great insight as usual. Any thoughts on these two previously mentioned stocks: CDBTE and GSL? Thanks as always.
November 5th, 2009 at 9:12 am -
Ogden Lafaye said:
GSL, trading near its 52 wk low, seems like a great buy…has anything changed in your opinion of this company? $1.09/share
November 6th, 2009 at 11:19 am -
Benjamin Haas said:
Ogden – I just picked up some GSL today. Thanks for the tip. I agree with you – seems like a great buy at this price. As per a lot of Glen’s picks, definitely some uncertainty surrounding it, hence the value.
November 6th, 2009 at 4:10 pm -
Glen Bradford said:
Don’t know about CDBTE, I think the rumors about the dual shareholder structures are likely true. I don’t know what you own by buying cdbte.
i’ve heard good things about gsl, something i need to look into for sure. last time i checked, it was undervalued. but that’s just my opinion… not sure if it’s a “yes”
November 10th, 2009 at 11:37 am -
Alan said:
Hi Glen!
Great to hear your advices.
One question Glen: what about AHR? how do you see the company after Q3 results? Is CH11 around the corner?
Thanks in advance Glen. It’s amazing how the youngsters are kicking the market
!November 12th, 2009 at 5:47 am -
Ogden Lafaye said:
Has anyone else wondered? on the seeming phenomena: Chinese stocks traded here do not seem to perform in conjunction with the ups and downs of the Dow.
November 19th, 2009 at 11:36 am -
Benjamin Haas said:
Yeah, that interested me as well but I don’t know enough to understand why it is occurring. In many instances they seem to actually trade opposite of the Dow.
November 19th, 2009 at 11:51 am -
Mike Perkins said:
Hello Glen,
Great website and strategies for investing.
Have you heard of Sino Agro Foods Inc by any chance? The ticker is: SIAF
I was just wondering what you might think of that company and their investment potential. The search for small-cap Chinese stocks and agricultural firms led me to this company.
Take care,
Mike
November 24th, 2009 at 10:58 am -
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November 26th, 2009 at 6:15 am -
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Thanks to share.December 1st, 2009 at 11:26 am -
House Hold Testing said:
One thing I will point out on these last 2 is that the ChiNext, China’s new Nasdaq-style stock market, just opened up with P/E ratios 50+. In those instances, you are paying for the growth. In the companies I’ve mentioned, the prices that the companies are trading at suggest that growth would be a surprise. In this way, you can make uncertainty work for you and get growth for free.
December 3rd, 2009 at 3:54 am -
best website design said:
On the Free Time game itself, I know that you get a preview of Sims 3 in action. Don’t know if that’s the only teaser or not.
December 10th, 2009 at 10:14 am -
boats for sale europe said:
I see no reason why it wouldn’t work! I don’t think they’d make it have different requirements just because its newer, but if you don’t have it yet, you could check the requirements.
December 12th, 2009 at 2:33 am -
Karaoke hire said:
The only thing that may be a problem is that you may not have enough room on your computer,free time uses about 1.5 gb so just go into my computer and right click on local disk,properties and there will be a little chart saying how much space is left.
December 12th, 2009 at 7:14 am -
Karaoke hire said:
One question Glen: what about AHR? how do you see the company after Q3 results? The only thing that may be a problem is that you may not have enough room on your computer,free time uses about 1.4 gb so just go into my computer and right click on local disk,properties and there will be a little chart saying how much space is left.
December 26th, 2009 at 3:44 am -
boats for sale europe said:
It’s a pretty safe bet that it will,i have all the sims 2 and they run fine on my computer.The only thing that really happens when you get more packs is the game gets a little slower.The only thing that may be a problem is that you may not have enough room on your computer,freetime uses about 1.5 gb so just go into my computer and right click on local disk,properties and there will be a little chart saying how much space is left.
January 3rd, 2010 at 2:24 am -
House Hold Testing said:
I was wondering if I have the sims 2 on my computer, along with the sims 2 pets, university, open for business, nightlife, and seasons expansion pack, if the sims freetime would work.
January 3rd, 2010 at 4:44 am -
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January 3rd, 2010 at 4:49 am -
Karaoke hire said:
Well if you want to be within the long arms of the law, you’re going to have to go to Walmart to find your sims game. Not to promote illegal activity, but there are some sites were you can download something called a torrent.
January 3rd, 2010 at 7:48 am -
sydney wedding venues said:
Trust me I download all the time from that site you can download Music movies software other computer games play station game xbox games psp games. So ya it is a cool site
January 6th, 2010 at 1:03 am -
best website design said:
The requirements were raised quite a bit for Pets, but I don’t think they’ve significantly changed since then.
January 9th, 2010 at 7:55 am -
sydney wedding venues said:
I must be crazy. I buy for only one reason. When asked what that reason is, I say, “Because it doesn’t make sense not to.” I’ve got three companies trading at ridiculously low multiples of my calculated future earnings a couple years down the road. These low prices indicate that investors find the opportunity unbelievable.
January 14th, 2010 at 6:42 pm -
House Hold Testing said:
fees expansion is a crazy way to extra from own business..
January 18th, 2010 at 2:49 pm
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