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Ten cheap growth stocks part II

January 6th, 2010 · 1 Comment

At a glance…

1) Fuqi International (FUQI)

  • Design, production, wholesale and (increasingly) retail of jewelry in China
  • Outstanding shares 27.6M
  • Market cap ($20 share price) $540M
  • Sales: $467M
  • Cash $173M (over $6 per share)
  • Debt $48M
  • After a surprisingly robust third quarter, the expectations for the whole year are raised. Analyst expect 2009 earnings to be $2.23 per share
  • For next year, they add only 3 cents to that, but we have a feeling this significantly understates 2010 opportunities as the company rapidly expands in the more profitable retail sector and the Chines jewelry market keeps on groing at a brisk pace
  • We have already written extensively about this company, here and here and published four recent research reports (available here)

What’s there to like:

  • Solid balance and track record
  • Solid growth industry
  • Move towards more profitable retail is just starting
  • Very cheap metrics

What’s there not to like

Technically (click to enlarge)

  • Nice start of the year
  • Real chance of breaking out of the downtrend
  • We see these shares as a screaming buy at these levels.

    2) China Green Agriculture (CGA)

    What’s there to like

    What’s not to like

    Technically (click to enlarge)

    • Nice uptrend still intact and seems getting steeper since the stellar quarter results published in mid November
    • We can see no reasons for the uptrend not to last, bar a significant correction in the overall Chinese markets.

    Tags: CGA · China · FUQI