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Tuesday, June 30, 2009

SKBI at Higher End of Range - Free to Scream

Will it gap down first or gap up? I don't know. Don't know don't care. I would buy a gap down if it even happens (today may have been it). I just have learned that low floats and EPS like this (rare) usually attract strong interest from momentum/value funds/traders. Whether it be tomorrow, Thursday into the holiday weekend, or next week, I think momentum/value funds/traders/investors will come for this stock. Read my analysis below.

SKBI priced known secondary in accordance with NASDAQ listing tonight at $12.98 , 63%higher than the original $8 range! In my opinion this speaks to the strong demand and the fact that trailing 12 months EPS is $3.39 and Trailing P/E is only 5 at a share price of $18 See Link. Read my DD why I think at current run rate this company has potential for $3+ EPS this year and $4+ next year - after this offering. Again, read why I am in this stock (the purpose of this blog is to post my ideas only) and do not chase any stock or buy it because I am in it.


I have been buying and blogging SKBI (was SKBO.OB prior to Friday) since the $11 range See Blog Post. Well as expected the Company moved to the NASDAQ this last Friday and closed at $20 per share. This week I expect them to complete a known share sale as part of the move to NASDAQ and to fund amazing expansion capabilities for their business.

Updated Float Analysis: Skystar has approximately 1.869m shares outstanding pre-secondary. On page 38 of the most recent S-1 Read S-1, it states that between management and two funds there are approximately 1.5m shares held. On page 7 it states management is locked up for six months from the date of the secondary. That would put SKBI at a float of approximately 369k pre-secondary if my calculations are correct. When the 1.6m shares are sold this week, I would guess that not many are going to flip this stock for $5-$10 dollars with this EPS potential. Depending on how many hold these shares, SKBI could have a float range of approximately 369k to 1.769k (Mid-point is 1.1m).
Lastly, according ot this article out last week, SKBI is on the naked short list (have not confirmed) Read Article

Updated EPS Analysis: In 2008 (see the presentation and the S-1 they did $3.07 EPS on the shares outstanding), Skystar had $5.6m of net income that included $1.1m of non-recurring expenses, or $6.7m adjusted net income.

Skystar had approximately 1.869 shares at the beginning of FY2009. They will sell 1.6m shares this week, however those shares will only be outstanding approximately six months of FY2009. So fully diluted weighted average shares for FY2009 should be approximately 2.769 (1.869 + half of 1.6m).

If I divide the FY 2008 adjusted net income by the new post-IPO share count of approximately 2.569m, I get EPS of $2.51. Skystar would only have to grow net income by approximately 20% in 2009 to have EPS of $3. However, in the first quarter of 2009, net income was up 72% YOY! It is easy for me to see how this Company could potentially do over $3 EPS for FY2009. Lastly, as discussed in my original blog post, in FY2010 expansion sales give the potential for approximately another $1 EPS. So I also see that potential for this Company to do over $4 EPS in FY2010.

The expected price range of the share sale this week is $9-$11 ( I would guess the high end and personally question if they could get more)? The stock could either pullback creating what I would consider a nice opportunity to buy or gap up as it is already on the NASDAQ now.

One thing is for certain, considering the P/E of approximately 24 that recent IPO DGW is trading at as of last week, combined with my calculations of $3-$4 EPS potential and the ultra low float of SKBI, it is easy for me to be very excited of what SKBI potentially could do.

I am long SKBI with an average of approximately the $12 range.

Sunday, June 28, 2009

Skystar on the NASDAQ with Huge EPS and Low Float

I have been buying and blogging SKBI (was SKBO.OB prior to Friday) since the $11 range See Blog Post. Well as expected the Company moved to the NASDAQ this last Friday and closed at $20 per share. This week I expect them to complete a known share sale as part of the move to NASDAQ and to fund amazing expansion capabilities for their business.

Updated Float Analysis: Skystar has approximately 1.869m shares outstanding pre-secondary. On page 38 of the most recent S-1 Read S-1, it states that between management and two funds there are approximately 1.5m shares held. On page 7 it states management is locked up for six months from the date of the secondary. That would put SKBI at a float of approximately 369k pre-secondary if my calculations are correct. When the 1.4m shares are sold this week, I would guess that not many are going to flip this stock for $5-$10 dollars with this EPS potential. Depending on how many hold these shares, SKBI could have a float range of approximately 369k to 1.769k (Mid-point is 1.1m).
Lastly, according ot this article out last week, SKBI is on the naked short list (have not confirmed) Read Article

Updated EPS Analysis: In 2008 (see the presentation and the S-1 they did $3.07 EPS on the shares outstanding), Skystar had $5.6m of net income that included $1.1m of non-recurring expenses, or $6.7m adjusted net income.

Skystar had approximately 1.869 shares at the beginning of FY2009. They will sell 1.4m shares this week, however those shares will only be outstanding approximately six months of FY2009. So fully diluted weighted average shares for FY2009 should be approximately 2.569 (1.869 + half of 1.4m).

If I divide the FY 2008 adjusted net income by the new post-IPO share count of approximately 2.569m, I get EPS of $2.61. Skystar would only have to grow net income by approximately 15% in 2009 to have EPS of $3. However, in the first quarter of 2009, net income was up 72% YOY! It is easy for me to see how this Company could potentially do over $3 EPS for FY2009. Lastly, as discussed in my original blog post, in FY2010 expansion sales give the potential for approximately another $1 EPS. So I also see that potential for this Company to do over $4 EPS in FY2010.

The expected price range of the share sale this week is $9-$11 ( I would guess the high end and personally question if they could get more)? The stock could either pullback creating what I would consider a nice opportunity to buy or gap up as it is already on the NASDAQ now.

One thing is for certain, considering the P/E of approximately 24 that recent IPO DGW is trading at as of last week, combined with my calculations of $3-$4 EPS potential and the ultra low float of SKBI, it is easy for me to be very excited of what SKBI potentially could do.

I am long SKBI with an average of approximately the $12 range.

Friday, June 19, 2009

Review of 3 Chinese IPO's- Week of June 22nd

1) DGW - Duoyuan Global Water Inc. - NYSE Listing

What They Do :
We are a leading China-based domestic water treatment equipment supplier. Our product offerings focus on addressing the key steps in the water treatment process, such as filtration, water softening, water-sediment separation, aeration, disinfection and reverse osmosis. Founded in 1992, we offer a comprehensive set of more than 80 complementary products across the following three product categories:
• Circulating Water Treatment Equipment
• Water Purification Equipment
• Wastewater Treatment Equipment

Links :
F-1 Filing
Road Show Presentation

The Numbers :
- Float will be 5m. Outstanding will be approximately 21m. (Each ADS represents 2 ordinary shares. There will be approximately 42m ordinary shares outstanding after this deal).
- Revenue growth 40% 2008 vs 2007 and 39% Q109 vs Q109. Net Income growth 63% 2008 vs 2007 and 92% Q109 vs Q109.
- They did 19.5m of Net Income in FY 2008.
- Expected Pricing $13-$15

super-trades summary : This is perhaps one of the sexiest sectors that exists. Water is a scare resource, especially in China. China is predicted to lead the world out of this recession. When I take the 19.5m of net income divided by the post-IPO ADS shares outstanding of 21m I get .93 trailing EPS with the company growing revenue and net income in Q109 by 39% and 92%, respectively. At $15 pricing that is about a 16 trailing P/E. Mix in a 5m float and I expect this IPO to generate strong interest. Only question is how high does it gap up. Under $20 I will try some shares.

Sympathy plays :
CLWT - Small cap play on this IPO similar business. Due to release annual report in June. I am sure those that like lower priced stocks come for this in a sympathy trade.

RINO.OB - Similar business with much better EPS and priced at what I consider to be ridiculously cheap. (Currently P/E of 4-5) Read why I think RINO.OB is a much better play than DGW. Applying the 16 P/E on RINO.OB recent EPS run rate would make it a $32 stock. Read Blog Post

2) CPC - Chemspec International - NYSE Listing

What They Do :
We are a leading China-based contract manufacturer of highly engineered specialty chemicals. In particular, we are the largest manufacturer of fluorinated specialty chemicals in China based on sales with a share of approximately 21% and 25% of the Chinese market in 2007 and 2008, respectively, according to a commissioned report prepared by Frost & Sullivan. We manufacture specialty chemicals, which are typically highly engineered chemicals used as building blocks in the manufacture of more advanced chemicals or to enhance the performance of the end products manufactured by our end users in various industries including electronics, pharmaceuticals and agrochemicals.

Links :
F-1 Filing
Road Show Presentation

The Numbers :
- Float will be 8.1m. Outstanding will be approximately 36m. (Each ADS represents 60 ordinary shares. There will be approximately 2.1B ordinary shares outstanding after this deal).
- Revenue growth 60% 2008 vs 2007 and 23% Q109 vs Q109. Net Income growth 34% 2008 vs 2007 and -44% Q109 vs Q109.
- They did 45.9m of Net Income in FY 2008.
- Expected Pricing $7-$9

super-trades summary : China is predicted to lead the world out of this recession. When I take the 45.9m of net income divided by the post-IPO ADS shares outstanding of 36m I get 1.28 trailing EPS. The company grew revenue by 23% in Q109, yet net income declined by 44% due to lower margins and increased R&D expenses. They also mentioned a slowdown due to the global recession that they gradually see recovering. I am sure that affected the pricing range. At $9 pricing that is about a 7 trailing P/E. I need to see how well this is received, but I think a 10 P/E range would not be unreasonable for this Company. It could get a higher one if they convince investors that net income growth will continue. Would try some around the pricing range or 10% above but will not chase unless I sense it is getting interest.

Sympathy plays :
CPC may not have enough interest to push some sympathy plays. However if this IPO is well received, then NOEC and SDTH are two small cap sympathy trades to watch.

3) SKBO.OB - Skystar Bio-Pharmaceutical Company - Nasdaq Listing

What They Do :
Skystar is a China-based developer and distributor of veterinary healthcare and medical care products. Skystar has four product lines (veterinary medicines, microorganisms, vaccines and feed additives) and over 170 products, with over 40 additional products in the developmental stage. Skystar has formed strategic sales distribution networks covering 29 provinces throughout China

Links :
S-1 Filing
Company Presentation

The Numbers :
- Float will be approximately 1.5m. Outstanding will be approximately 3m. Company currently trades on the OTCBB and will do an IPO on the Nasdaq with the placement of 1m shares.
- Revenue growth 70% 2008 vs 2007 and 42% Q109 vs Q109. Net Income growth 63% 2008 vs 2007 and 73% Q109 vs Q109.

Mind Boggling Numbers - In the S-1 filing, Skystar reported $3.07 EPS for FY 2008 and $0.57 EPS for First Quarter 2009. Revenue was up 70% in FY 2008 vs. FY 2007. Revenue was up 42% and Net Income was up 73% in the First Quarter of 2009.

More Mind Boggling Growth - From the S-1 "Manufacturing Facilities. We intend to complete a vaccine manufacturing facility with approximately $2.5 million from the net proceeds of the offering. Under our current plans, this facility is expected to be completed by the fourth quarter of 2009 and obtain GMP certification in late 2009. Once completed, we believe that this facility will increase production capacity by 6 billion units, or 2,300.0% from 250 million units, with a value of $14.0 million in projected revenue at a gross margin rate of 60-70%.

Additionally, we are planning to construct a new production facility for micro-organism and feed additives with approximately $1.5 million from the net proceeds of the offering. Under our current planning, the annual production capacity of this production facility will be approximately 4,000 metric tonnes, an increase of 48.7% from our current capacity of 8,200 metric tonnes. We anticipate construction to complete in the fourth quarter of 2009."

By my calculations, with the addition of these two facilities the Company will have the potential to add up to $14m additional revenue at 60-70% gross margin rate from vaccines and approximately $3m in feed additives (facility increases capacity by 49% and they did $5.9m in this category in 2008 at a 65% blended gross profit margin - see Presentation). If they can produce and sell this extra capacity I calculate that as an additional $10m in gross profit. In Q1 2009 the Net Income margin was around 28%. So this extra capacity (if produced and sold successfully and at these same margins) could add another $1 EPS in 2010 by my calculations.

In 2008 (see the presentation and the S-1 they did $3.07 EPS on the shares outstanding), Skystar had $5.6m of net income that included $1.1m of non-recurring expenses, or $6.7m adjusted net income. If I divide that by the new post-IPO share count of approximately 2.9m, I get EPS of $2.31. Now, in the first quarter of 2009, net income was up 72% YOY. If the Company hypothetically can even grow net income by 30% for all of 2009 over 2008, that $2.31 would go to $3.00 EPS with the new shares offered.

In 2010 if they have these new facilities in place and produce and sell with the above assumptions from the S-1 that would calculate to another $1 EPS. Going by my calculations, I see a scenario where if all falls into place perfectly this company could do $3+ EPS in 2009 and $4+ in 2010. (Not to mention potential growth from the many products they have awaiting approval) You can use your imagination with a 10-20 P/E ratio. Again, this is what I see as potential when I look at their numbers and information, not a prediction or guarantee.

Lastly, according to the Company website, they are also working on an Avian flu vaccine for the birds themselves. "While larger international companies are focusing on vaccines to prevent people from catching avian flu, Skystar's focus is on vaccines to be administered to farm chickens and other poultry to prevent them from catching H5N1 Avian Influenza. This type of vaccine is well within Skystar's current scope and expertise and could potentially prevent an epidemic/pandemic by controlling an outbreak at the source (the poultry)." See Website

super-trades summary : This is perhaps one of the most exciting scenarios I have seen in sometime. If the Company can do $3+ EPS in 2009 then this is pricing at a P/E of 3! If DGW ends up with a P/E of 20+, applying that to $3 EPS would be a stock price of $60. With this float and amazing EPS and low valuation, if the momentum/valuation crowd shows interest, I can see this stock being one of those rare stocks that runs to the $30-$50 range like EFUT did in 2006. Read Blog Post

Sympathy plays :
Any low float China stocks with great EPS and low valuations.

I am long SKBO.OB. This blog is my opinion and not investment advice or a prediction of future prices.

Tuesday, June 16, 2009

RINO.OB - Amazing Growth - Compare to Coming DGW IPO

There is an exciting IPO scheduled to trade the week of June 22nd. Duoyuan Global Water (DGW) They are a provider of water treatment equipment in China. China has a water scarcity issue so this is one of the hottest sector to me. Water and Air industry in China. By my calculations DGW would have done approximately $1 EPS with the post-IPO share count for 2008. The IPO is expected to price at $13-$15 for a 13-15 p/e and I would guess this gaps open much higher. The problem with hot IPO's in many cases is they gap so high that the only people that make money are the people who were able to participate in the IPO shares. I think I found a much better stock.

RINO.OB - RINO International Corporation, through its direct and indirect subsidiaries, including Innomind Group Limited and Dalian Innomind Environment Engineering Co., Ltd., its contractually-controlled affiliate, Dalian RINO Environmental Engineering Science and Technology Co., Ltd. ("Dalian Rino") and Dalian Rino's wholly-owned subsidiaries, Dalian Rino Environmental Engineering Project Design Co., Ltd. and Dalian Rino Environmental Construction & Installation Project Co., Ltd., is a leading provider of environmental protection equipment for the iron and steel industry in China. Specifically, RINO designs, manufactures, installs and services proprietary and patented wastewater treatment, flue gas desulphurization equipment, and high temperature anti-oxidation systems, which are all designed to reduce either industrial pollution and/or improve energy utilization.

This Company has amazing numbers:

Fiscal Year 2008 Sales Increase 119.8% to $139.3 million, **Adjusted Net Income Increases 119.9% to $39.0 million with EPS of $1.56 -- Reaffirms 2009 Guidance: Revenues expected to exceed $176.5 million Read 2008 Press Release

Q1 Net Sales Increased 87.0% to $35.6 Million while Net Income Increased 148.5% to $12.5 Million with EPS of $.50 vs. $.20 Read Q1 Press Release

"The first quarter represents a very strong start in 2009 as we made significant improvements in all of our key financial metrics," stated Mr. Zou Dejun, President and CEO of RINO International, "Our business continues to be driven by a number of fundamental factors all centered around China's desire to ensure that iron and steel manufacturers properly protect the environment, specifically the water and air. By collecting a significant portion of our receivables we ended the quarter with $47.9 million cash and cash equivalents on our balance sheet. This generated significant cash flow from operations, and puts us in an excellent position to capitalize on our growth opportunities for the balance of 2009. We ended the quarter with a backlog of approximately $61.8 million, which represents 8 desulphurization, 5 wastewater treatment and 1 anti-oxidation projects which will be implemented during the next two quarters. We are very confident that we will continue to provide incremental and robust top-line and bottom line growth for our Company".

There is one analyst that has estimates for RINO on yahoo that expect over $2 EPS. It does not look like they were updated for the recent Q1 results. See Estimates

If DGW is going to trade at a P/E of 20 or higher, it is easy to see why a Company like RINO seems extremely undervalued to me at current prices. If RINO is currently near or above a $2 EPS run rate with impressive growth and backlog, then a P/E of 13-15 like DGW is pricing at would be a $26-$30 stock.

Lastly, the Company stated in the 2008 year end conference call that they have applied to list on the Nasdaq. Listen to Conference Call

The float is 7.1m and outstanding shares are 25m according to Bloomberg Bloomberg

I am long RINO.OB

AIM Great News the Day After Great Earnings

Aerosonic Chosen as Key Supplier to AleniaSIA for the AleniaAermacchi M-346 Trainer Aircraft
On Tuesday June 16, 2009, 8:00 am EDT
CLEARWATER, Fla.--(BUSINESS WIRE)--Aerosonic Corporation (NYSE Amex: AIM), a leading supplier of precision flight instruments and systems for commercial, business and military aircraft, announced today that it has signed a Long Term Supply Agreement (“LTSA”) and received an initial production order from AleniaSIA to supply its Integrated Multi-Function Probe (“IMFP”) and related equipment for the production of AleniaAermacchi M-346 aircraft FBW Flight Control System. The deliveries to AleniaSIA will begin in March of 2010. Based on current forecasts, Aerosonic expects this program to generate up to $10 million in revenue over the next 4 years
Read Article

AIM - super-trades.com started off the week with a buy/alert on AIM at $4.20 today Read Blog Post. It hit $6.45 for a one day gain of 54%! This situation reminds me eerily of my recent stock pick MRM Read Blog Post, which I called at $6.40 on a similar earnings and EPS turnaround and hit a high of $13.38, or 109% from the original alert. While AIM may pullback, I think it has much higher to go based on what appears to be a potential EPS run rate of well over $1+. Now with a new contract I like it even further for a continued move. I am long AIM from $4.20.

Monday, June 15, 2009

super-trades Momentum Continues With Staying Power

AIM - super-trades.com started off the week with a buy/alert on AIM at $4.20 today Read Blog Post. It hit $6.45 for a one day gain of 54%! This situation reminds me eerily of my recent stock pick MRM Read Blog Post, which I called at $6.40 on a similar earnings and EPS turnaround and hit a high of $13.38, or 109% from the original alert. While AIM may pullback, I think it has much higher to go based on what appears to be a potential EPS run rate of well over $1+. I am long AIM from $4.20.

SKBO - I am extremely excited about this stock and cannot wait for it to get to the Nasdaq. I am long this stock with an average in the $11's and will be adding on any pullbacks. (Although it does not seem to want to pullback so far). Read my reasons for thinking this is the next EFUT type mover Read SKBO Research

LZR - Old super-trades favorite LZR which I nailed for 100% gain TWICE, still kept going. Today it hit a new high of $11.14 becoming a 140% super-trades idea gainer from low to high.

VIFL - Another old super-trades favorite. Bought at $1.35 Read Blog Post It hit $3.00 for a 122% gain. It then pulled back under $2. Today it closed at $2.80 on the strength of Friday's news of irradiation approval for oysters Read Article.

super-trades Notes:
- Very exciting to me that many of my picks are not only working , but showing staying power much higher than my original alerts. This proves the research was correct more than anything.

- When I have profit on a pick, I will always take some off the table and use a mental stop on the rest to ensure profitability.

- Look for more new ideas every week as I spend much time researching.

- Don't chase any stocks. Low float stocks can be volatile and dangerous. My blog is not investment advice but instead documents my trades/ideas.

In AIM $4.20

In AIM at $4.20 on a nice quarter. $0.37 EPS less an insurance claim so I get $0.28-$0.29 without it. Read Press Release

Float 3m Outstanding 3.7m per Bloomberg Bloomberg

Tuesday, June 9, 2009

SKBO.OB Also has Swine Disease Expertise

SKBO.OB is my latest position/idea Read Blog Post. I wrote how I am in this stock because I think this stock has potential to be the next EFUT. (EFUT went from $11 to $49 in 2006)

Aside from the $3-$4 EPS potential (by my estimates but read blog post it is based on information from the filings - they did report $3.07 EPS in 2008), the growth potential, and the Avian Flu angle, I found these articles from 2007 about SKBO.OB and swine fever/diseases:

Skystar Bio-Pharmaceutical Releases First Aid Kit for Swine High-Fever Syndrome
7/23/2007


The Company has developed prevention and treatment therapies specifically designed for large-scale pig farms.

XI'AN, China, July 23 /Xinhua-PRNewswire-FirstCall/ -- Skystar Bio-Pharmaceutical Co., Ltd. (''Skystar''; ''Company''), a leading bio-pharmaceutical company in the People's Republic of China (''PRC''), today announced that it has successfully developed a first aid kit to treat the recent outbreak of Swine High-Fever Syndrome (''SHFS'') among pigs in China. The kit is expected to generate about $526,000 in revenue during the second half of 2007.

SHFS is caused by mutated viral strains of porcine reproductive and respiratory syndrome, also know as blue ear disease, and is often complicated by porcine circovirus type 2 (PCV-2). The complication evolves in three stages. First, the viral infection damages pigs' immune system resulting in immunity paralysis or complete loss of immunity. Consequently, primary mixed infections usually follow including many other viral diseases such as hog cholera, pseudorabies, cephalitis B, parvovirus, rotavirus and influenza. Further, complicated viral infections lead to secondary mixed infections caused by highly contagious bacterial diseases such as streptococcemia, pleuropneumonia, colibacillosis, pasteurellosis and mycoplasma pneumonia. As a direct result of blue ear disease, SHFS often results in rapid infection and extremely high mortality rates.
Read Article


Skystar Receives Approval For 36 New Veterinary Medicines
Article Date: 12 Jun 2007 - 0:00 PDT

Three of the new products target a variety of indications in pigs and piglets and are expected to become top sellers. Chinese Goldthread (Huanglian) Detoxification Powder ("CGDP") is a TCM which clinical tests have shown is especially effective in treating pig diseases such as upper respiratory tract inflammation, acute bronchitis, pneumonia, diarrhea, contagious gastritis and blue-ear disease, also known as Porcine Reproductive and Respiratory Syndrome (PRRS). GGDP has overcome many of the shortcomings of traditional Chinese medicines such as slow effectiveness and unstable components. Its effectiveness in the prevention and treatment of viral diseases such as blue- ear disease is a significant advantage. CGDP is estimated to generate annual revenue of RMB 5 million in 2007.
Read Article


Here is what the SKBO.OB website says about the Avian Flu:
While larger international companies are focusing on vaccines to prevent people from catching avian flu, Skystar's focus is on vaccines to be administered to farm chickens and other poultry to prevent them from catching H5N1 Avian Influenza. This type of vaccine is well within Skystar's current scope and expertise and could potentially prevent an epidemic/pandemic by controlling an outbreak at the source (the poultry). See Website

I am long SKBO.OB

SKBO.OB vs. ADY - Compare These Two China Growth Stocks

All the usual disclaimers - This Blog is not investment advice but documents my stock ideas/positions. Some of my ideas do not work. I never think it is a good idea to chase stocks. Low float stocks in particular can be dangerous and volatile. See disclaimer at bottom of blog home page.

ADY is a stock that has been on a tear recently. They reported earnings after the close on May 14, 2009 when the stock closed in the $18's. They had a blowout quarter, helped by the recent melamine crisis in China Read Press Release. The stock took off and has not looked back, closing at $42.10 today, June 10, 2009.

SKBO.OB is my latest position/idea Read Blog Post. I wrote how I am in this stock because I think this stock has potential to be the next EFUT (EFUT went from $11 to $49 in 2006). SKBO.OB closed at $16 today, June 10, 2009.

Although they are in completely different industries, they are both Chinese growth stocks and I decided to do a comparison in certain categories.

1) Float and Outstanding Shares -

ADY - 17.2m shares outstanding and 7.5m Float per Bloomberg Bloomberg - ADY

SKBO.OB - 1.9m current shares Outstanding per Bloomberg and there is an S-1 filed to sell 1m shares whcih would make approximately 2.9m shares outstanding. Page 39 of the S-1 states that between managemnt and two funds they own approximately 1.5m shares. By my calculations, after the 1m share offering the float would be approximately 1.5m and must be like 400-500k right now pre-offering.
Bloomberg - SKBO.OB
S-1 Filing

2) EPS -
ADY - Current estimates are for $3.34 this year and $4.49 next year per yahoo finance See Estimates

SKBO.OB - Per the S-1 filing, they reported $3.07 EPS in 2008. They are now increasing outstanding shares by 1m per the S-1 filing. In 2008 Skystar had $5.6m of net income that included $1.1m of non-recurring expenses, or $6.7m adjusted net income. See SKBO.OB Presentation If I divide that by the new post-IPO share count of approximately 2.9m, I get EPS of $2.31. Now, in the first quarter of 2009, net income was up 72% YOY. If the Company hypothetically can even grow net income by 30% for all of 2009 over 2008, that $2.31 would go to $3.00 EPS with the new shares offered. Q1 2009 Press Release

For next year, the S-1 filing talks about the opening of a new facility at the end of 2009 and the potential revenue opportunity that would provide. By my calculations, with the addition of these two facilities the Company will have the potential to add up to $14m additional revenue at 60-70% gross margin rate from vaccines and approximately $3m in feed additives (facility increases capacity by 49% and they did $5.9m in this category in 2008 at a 65% blended gross profit margin - see Presentation). If they can produce and sell this extra capacity I calculate that as an additional $10m in gross profit. In Q1 2009 the Net Income margin was around 28%. So this extra capacity (if produced and sold successfully and at these same margins) could add another $1 EPS in 2010 by my calculations.

So, if SKBO.OB can grow Net Income by at least 30% this year and open the new facilities and sell the product at the disclosed and historical margins (hypothetically as neither guaranteed), then by my calculations, they also could be in the $3 EPS range this year and the $4 EPS range next year, similar to ADY's estimates on yahoo finance.

3 - Analyst Price Targets

ADY - Targets are out there from a low of $30 to a high of $50 per yahoo finance See Targets For ADY

SKBO.OB - None that I could find

Another reason I am long SKBO.OB

Monday, June 8, 2009

105% Gainer , 50% Gainer and a New, Exciting Stock

What a day for www.super-trades.com

MRM - Bought at $6.40 on May 19th. See Blog Alert. It hit at $13.10 today for a 105% gain so far. Still looks like going much higher, but always protect some profit.

UTA - I entered Friday May 29th at $7.65 See Blog Post. It hit $11.44 today (six trading days later) for a 50% gain from the original call. Looks strong still.

EVK - Entered it at $1.85 on this Tuesday June 2 Read Blog Post. It hit $3 Friday June 5th, (three days later) for a 62% gain. It hit $2.95 again today and looks good.

New exciting position for me is SKBO.OB - Is it the next EFUT? (Bought some $10,$11,$12,$13) Read DD on SKBO.OB. Thin and volatile and not a stock to chase however.

This Blog is to document my trades and ideas and is not investing advice. Do not chase stocks. Low float stocks can be dangerous and volatile.

Friday, June 5, 2009

Is this the Next EFUT? - From the Person who called the First One

Before you read this: This message and this blog are not investment advice. This blog documents why I buy or sell stocks personally and is in no way meant to advise anyone to trade. Chasing stocks is never something I do or recommend. Low float stocks in particular can be extremely volatile and risky. Please read disclaimers at the bottom of the blog.

One of my most successful stock trades/ideas ever was EFUT. It was a Chinese IPO in 2006. The IPO came out around October 31, 2006 at $7 and instantly ran up to the $10-$11 range the next day. It then was dead and drifting for 3 days and most lost faith and thought it was over while I was pounding the table at www.thelion.com (where I post as Superman) that this stock was going to make a monster move like TZOO did. Read my post Twelve trading days later EFUT hit a high of $48.64 and would top out at $49.90 a few days after that for a 454% gain in a little over 2 weeks. See historical prices EFUT was one of the more exciting small cap plays of all time (excluding the Internet boom era).

I bought what I believe I have now found another stock that has similar characteristics that EFUT had except its EPS is WAY higher than EFUT's ever was.

SKBO.OB

Skystar Bio-Pharmaceutical Company See Website has filed an S-1 to sell 1m shares in what looks like a move from the OTCBB to the Nasdaq. This is a Chinese Agriculture/Food stock. "Skystar is a China-based developer and distributor of veterinary healthcare and medical care products. Skystar has four product lines (veterinary medicines, microorganisms, vaccines and feed additives) and over 170 products, with over 40 additional products in the developmental stage. Skystar has formed strategic sales distribution networks covering 29 provinces throughout China."

See Company Presentation

See S-1 Filing

Q1 2009 Press Release

From the S-1 they are approved for the Nasdaq pending this 1m share offering. - "We have been approved for listing of our common stock on the NASDAQ Capital Market under the symbol “SKBI”, pending the final determination of the public offering price for the common stock offered hereby."

Current outstanding shares are 1.9m per Bloomberg and should be 2.9m after the offering. Page 39 of the S-1 shows that insiders and funds own approximately 1.4m shares. So after the offering the float should be approximately 1.5m if my calculations are correct. See Bloomberg


Mind Boggling Numbers - In the S-1 filing, Skystar reported $3.07 EPS for FY 2008 and $0.57 EPS for First Quarter 2009. Revenue was up 70% in FY 2008 vs. FY 2007. Revenue was up 42% and Net Income was up 73% in the First Quarter of 2009.

More Mind Boggling Growth - From the S-1 "Manufacturing Facilities. We intend to complete a vaccine manufacturing facility with approximately $2.5 million from the net proceeds of the offering. Under our current plans, this facility is expected to be completed by the fourth quarter of 2009 and obtain GMP certification in late 2009. Once completed, we believe that this facility will increase production capacity by 6 billion units, or 2,300.0% from 250 million units, with a value of $14.0 million in projected revenue at a gross margin rate of 60-70%.

Additionally, we are planning to construct a new production facility for micro-organism and feed additives with approximately $1.5 million from the net proceeds of the offering. Under our current planning, the annual production capacity of this production facility will be approximately 4,000 metric tonnes, an increase of 48.7% from our current capacity of 8,200 metric tonnes. We anticipate construction to complete in the fourth quarter of 2009."

By my calculations, with the addition of these two facilities the Company will have the potential to add up to $14m additional revenue at 60-70% gross margin rate from vaccines and approximately $3m in feed additives (facility increases capacity by 49% and they did $5.9m in this category in 2008 at a 65% blended gross profit margin - see Presentation). If they can produce and sell this extra capacity I calculate that as an additional $10m in gross profit. In Q1 2009 the Net Income margin was around 28%. So this extra capacity (if produced and sold successfully and at these same margins) could add another $1 EPS in 2010 by my calculations.

In 2008 (see the presentation and the S-1 they did $3.07 EPS on the shares outstanding), Skystar had $5.6m of net income that included $1.1m of non-recurring expenses, or $6.7m adjusted net income. If I divide that by the new post-IPO share count of approximately 2.9m, I get EPS of $2.31. Now, in the first quarter of 2009, net income was up 72% YOY. If the Company hypothetically can even grow net income by 30% for all of 2009 over 2008, that $2.31 would go to $3.00 EPS with the new shares offered.

In 2010 IF and I say IF they have these new facilities in place and produce and sell with the above assumptions from the S-1 that COULD calculate to another $1 EPS. Going by my calculations (and it is just my calculations not a prediction or guarantee), I see a scenario where IF all falls into place perfectly (not saying it does) this company could do $3+ EPS in 2009 and $4+ in 2010. (Not to mention potential growth from the many products they have awaiting approval) You can use your imagination with a 10-20 P/E ratio. Again, this is what I see as potential when I look at their numbers and information, not a prediction or guarantee.

Lastly, according to the Company website, they are also working on an Avian flu vaccine for the birds themselves. "While larger international companies are focusing on vaccines to prevent people from catching avian flu, Skystar's focus is on vaccines to be administered to farm chickens and other poultry to prevent them from catching H5N1 Avian Influenza. This type of vaccine is well within Skystar's current scope and expertise and could potentially prevent an epidemic/pandemic by controlling an outbreak at the source (the poultry)." See Website

After doing this research, this Company seems to me to certainly have the potential to be another EFUT or even better.

This is just my opinion and not investment advice.

I am long SKBO.OB

Last 3 picks all took off this week 67%,62%,30% gainers

It was an exciting week. My last three picks all took off this week. I am working on what I believe are some potential monsters this weekend. Will announce on the blog when DD is ready. Sign up for free email alerts on the blog. May send the next two out first to the email list.

EVK - Entered it at $1.85 on this Tuesday June 2 Read Blog Post. It hit $3 today, (three days later) for a 62% gain. Stock closed at $2.43.

UTA - I entered Friday May 29th at $7.65 See Blog Post. It closed strongly at $9.95 today (five days later) for a 30% gain from the original call. Looks like it is going higher next week.

SMCG - I entered at $1.36 on May 21st Read Blog Post. It hit $2.27 this Thursday, June 4, for a 67% gain (11 days later). Took most off here.


Again, don't chase any stocks. Don't buy stocks just because I buy them. Manage your own entry/exits and risk. This blog is to document my trading ideas and is not investment advice. However, it was an exciting week for www.super-trades.com

Tuesday, June 2, 2009

in EVK $1.85 - Unkown China Retailer 2m Float

Based in Nanjing, China, Ever-Glory International Group, Inc. is a leading apparel supply chain manager and retailer in China. Ever-Glory is the first Chinese apparel company listed on the American Stock Exchange (now called NYSE Amex), and has a focus on middle-to-high grade casual wear, outerwear, and sportswear brands. The Company maintains global strategic partnerships in Europe, the United States, Japan and China, conducting business with several well-known brands and retail chain stores. In addition, Ever-Glory operates its own domestic chain of retail stores known as "LA GO GO."

Per Bloomberg the float is 2m. Bloomberg

EPS was $0.12 per share for the most recent quarter. The Company forecast up to $6.5m Net Income for this year. Bloomberg has o/s shares at 13.5m so that would amount to approximately $0.44 EPS.Read Press Release
If they can deliver that EPS, a 10 P/E would be over $4.

Given the strength of the Chinese small caps lately and the fact that this is the first Chinese apparel Company listed on the NYSE Amex, EVK looked attractive to me under $2.

JVA - Earnings Report

JVA reported earnings - will sell and take profit on most shares in the $4's and watch the rest.

Monday, June 1, 2009

super-trades - Two 52 week highs and others about to join them

FIT - Bought at $3.50 on May 7th. See Blog Post It hit $4.65 (52 week high) today June 1st for a 33% gain from original entry so far. Still think this has room to go higher if you own from the $3.50 range. Profitable Obama health care play.

DIT - Bought at $32 on April 23rd See Blog Post. It hit $43.99 today (52 week high) June 1st for a 35% gain from the original call. Lowest float out there and very volatile. Bought a few back but have very small position here - not a stock to chase. I should have re-entered after first big dip like I did on the LZR moves Read Blog Post. But original DD was solid.

MRM - Bought at $6.40 on May 19th. See Blog Alert. It hit at $11.55 today June 1st and looks strong and ready for the next move higher. They had a fantastic earnings report Read MRM press release. The reported EPS of $0.29 for the quarter vs. a loss of $0.29 for prior year and also said next quarter will be strong (What more could you ask for?). They have a float of 1.5m and o/s shares of 2.9m See Bloomberg. I am sticking with this stock as I believe this is an exciting turnaround business with a tiny float like BOOM was in 2005 and DDRX this year. I believe the next wave of momentum is due and this will see $15-$20. I am in this originally from the $6's and have added a few along the way so I have the luxury and cushion to see this play out.

UTA - New stocked I entered Friday May 29th at $7.65 See Blog Post. It closed at $8.20 today and is up 7% in one day from the original call.

Even LZR (which I am no longer in) but was a 100% gainer for me TWICE Read Blog Post hads a strong day closing at $8.

A super day for super-trades.......more new stock picks to come stay tuned and sign up for free blog email alerts.

www.super-trades.com

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Welcome to super-trades.com, blog home of Superman. Purpose of this blog is for me to discuss my trades and stock ideas (As well as opinions and rants on stock market related issues). I will mention the date and price I enter. As far as exits, I always try to take half off when I have some profit and if I believe in the stock, let the rest run further. I always also use mental stop limits, at which time I would exit and minimize any losses. I do not like to give price targets unless I can support them by P/E in some way or by comparison to another stock. I just post stock trades and ideas that I believe will go higher (or lower for shorts) and the reason I believe that. Individuals should have their own strategies for managing profits and losses. My stock picks tend to NOT be daytrades at all and many take time to move. I am not an investment advisor and this blog should not be considered or followed as investment advice.