Category Archives: Stocks

Zagg Reports Record-Breaking Results for the First Quarter of 2009

From yahoo.com

ZAGG Inc. (OTCBB:ZAGG), a leading producer of mobile electronics accessories including the popular invisibleSHIELD™ and award-winning ZAGGaudio™ brands, announces successful financial results for the first quarter of Fiscal Year 2009, ended March 31, 2009. ZAGG highlighted a record-breaking quarter with revenues of almost $8.1 million dollars, a nearly 184% increase when compared to first quarter 2008. Earnings per share for ZAGG were $0.05 for the first quarter 2009.

“Even during these challenging economic times, ZAGG continues to see unprecedented demand for its products. Much of our success can be attributed to the ability to execute on our business plan. We look forward to rolling out new products and services over the remainder of the year that will continue our rapid growth track for years to come,” said Robert G. Pedersen II, President and CEO of ZAGG.

“We continue to see great results from our strong partnerships with Best Buy and Carphone Warehouse, and plan to continue announcing new partnerships that will contribute to ZAGG’s success,” said Pedersen. “This will be the best year ever for ZAGG, and if economic conditions continue to improve, we are well-poised for even more accelerated growth.”

The Company will host an investor conference call today, Thursday, May 14, 2009 at 11:00 AM EDT, to answer questions regarding the results from our Form 10-Q for the 3 months ended March 31, 2009. To participate in the call please dial (877) 407-9210. Interested parties may also listen via the Internet at the event website and on the Company website at: www.ZAGG.com. The call will be available for replay for 30 days by dialing (877) 660-6853 and entering account number 286 and call ID number 322566.

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9 Top China Plays

By Glen Bradford, GlenBradford.com

The financial crisis has sent the markets plummeting. For those who believe that companies that make more money than other companies should be priced higher than other companies, boy do I have some bargain bin deals for you. In the past 6 months, I’ve hand sorted through over 5000 companies. The steals are all in China.

1) China Architectural Engineering (NASDAQ: CAEI) specializes in high-end curtain wall systems (including glass, stone and metal curtain walls), roofing systems, steel construction systems, eco-energy saving building conservation systems and related products, for public works and commercial real estate projects.

The company just got added to the Halter USX China Index.

Trading at $37.24M with a book value of $78.2M for a company that does specialty construction projects looks like a steal, especially when they made $22.6M in the first 9 quarters of 2008.

They lowered their guidance for Q4/2008 and they are eating some cost overruns. Recent news includes that they were awarded two new contracts for projects valued at $80 million in Dubai and Singapore.

The company also reported that its project backlog has increased to a new record of $245M.

2) China Yongxin Pharmaceuticals (OTC BB: CYXN) has three segments: the wholesale of pharmaceuticals and other medical-related products, the operation of retail drugstores, and the cultivation, processing of ginseng.

Currently trading at $2.19M when they made $4.0M in the first 3 quarters of 2008 and $2.6M in the first 3 quarters of 2007 is absurd. Not to mention that the book value is $12.5M.

Yongxin also just put up a new, more flashy website. The investor message boards were very concerned when their old website went down. I sat by and let the people who don’t understand website development sell out. Same thing happened with New Dragon Asia (NWD) below.

3) New Dragon Asia (OTC BB: NWD) is engaged in the milling, sale and distribution of flour and related products, including instant noodles and soybean-derived products, to retail and wholesale customers throughout China. I find trading at $9.14M with a book value of $74M mildly entertaining. The company made $14.12M in 2008.

In my opinion, investors are shaky because their operating margins got squeezed by the ridiculous expansion in commodity prices. Good news, the whole bubble collapsed. As I see it, this is an opportunity for the company to make some huge numbers in 2009, not to mention that they’ve been religious about growing revenues over the past 5 years with high predictability.

Their website crashed about a month ago and the stock price hit the chopping block, getting cut by more than half. Look for the catalyst at $0.83 of the Halter USX China Index.

4) Gold Horse International (OTC BB: GHII) is principally engaged in three business sectors in China: construction, residential and commercial real estate development, and management and operation of the Inner Mongolia Jin Ma Hotel.

Top line revenue guidance for 2009 is $90M and the company is priced at $2.63M.

In 2008, they made $4.53M on revenues of $66.91M. The book value is about $25M. Gold Horse is located in Hohhot, China; a city that has been growing at 23.5% for the past 7 years.

Gold Horse has contracted to build a wind power manufacturing plant. This company is located in the middle of china, not on the outskirts where the exports have fallen and hurt the economy.

There are two issues that I see. The first is that their cash is low and they are burning through cash to maintain operations. The second is that there are some big shareholders that look to be slowly selling the stock down.

5) Orsus Xelent Technologies (AMEX: ORS) is engaged in the business of designing, manufacturing and distributing cellular phones for retail and wholesale distribution.

What we have here is a company trading at $7.44M that has a book value of $42.4M. In the last 9 months they made $6.34M.

According to their annuals, they are trying to advance along with technology into the 3G markets and are targeting China’s rural population. They grew 16% in 2008 even with the economic crisis slowing them down in the end of the year.

6) Lotus Pharmaceuticals (OTC BB: LTUS) manufactures branded drugs and distributes them along with products produced by third-party manufacturers throughout China. Lotus also just came out with a new website in the last week.

Trading at $8.06M with a book value of $38.3M and making $6.3M in the first 9-months of 2008 makes Lotus extremely attractive. There is downside for the risk-averse. Lotus East has historically funded its capital expenditures from their working capital and has advised us that they believe this capital is sufficient for their current needs.

Lotus East has contractual commitments for approximately $65.5 million related to a Technology Transfer Agreement and the construction of the new manufacturing facility. If Lotus East is not successful in obtaining all of the funding necessary to complete the construction of the new facility, it would lose the approximately $17,219,000 spent to date, including the $17,000,000 for the deposit on the land use rights which is non-refundable.

That said, it’s still trading below book value and has several huge projects in the works setting the stage for huge growth potential.

7) China Sun Group High Tech (OTC BB: CSGH) mainly engages in the production and sales of cobaltosic oxide and lithium cobalt oxide, both anode materials used in lithium ion rechargeable batteries in the People’s Republic of China.

Trading at $12.29M with a book value of $27.45M with a 2008 annual net income of $6.74M, I immediately started digging deeper into the growth potential of this company. Not to mention that every quarter in 2008 trounced the comparable quarter in 2007.

I don’t really mind reading headlines like: Quarterly Revenue Up 42% to $7.6 Million; Net Income Increases 145% to $1.8 Million. You can’t find headlines like those with your average run of the mill blue chip.

8.  Asia Cork (OTC BB: AKRK) is a rapidly growing leader in the development, manufacturing and marketing of cork-based building materials.

Asia Cork is currently valued at $4.64M, even though it has a book value of $17.1M and pulled down $2.54M of profit in the first 3 Quarters of 2008.

In my conversations with flooring experts, Cork seems to be trending back into fashion as a “green” alternative.

Another set of great headlines: Asia Cork Q3 ’08 Revenue Up 117% to $8.96M; Net Income Up 220% to $1.40M.

The issue here is the daily volumes are low and Asia Cork isn’t off it’s 52-week high as much as I’d like it to be.

9) China Kangtai Cactus Bio-Tech (OTC BB:CKGT) is principally engaged in the production, research and development (R&D), sales and marketing of products derived from cacti.

Again, I see a big deal here since the company is trading at $3.93M with a book value of $22.69M and a yearly net income of $2.1M including a -1.09M adjustment in Q1 2008.

The downside is that there are rumors that the market maker, NITE, has a lot of excess shares.

For the three months ended September 30, 2008, revenues increased by $2,229,213 or 56.4% to $6,184,685 from $3,955,472 in the corresponding period of the prior year. The increase in revenues was attributable to the fact that the company is continuing to expand its productions and distribution, and its products are better accepted by the Chinese market customers.

Bottom Line: In an environment like this, where game theory is prevailing, there’s no question in my mind that a lot of these companies are likely to become more attractive in the short term. The long term tradeoffs and value price tradeoffs warrant further investigation. Price is what you pay and value is what you get.

Disclaimer: I own NWD, GHII, CAEI, ORS, and LTUS in my accounts and the accounts I manage. I am working around Ameritrade to acquire exposure to CYXN and AKRK. I also plan on purchasing the other companies mentioned in this article.

Pennyheaven Super 7 (2009)

These are our top stock picks for 2009. Once again we are looking for growth. Prices reflect close of business on 12/31/2008. All trade on the OTCBB except AFOP and DVAX which trade on Nasdaq. Nasdaq stocks trading under $1.00 do run the risk of being delisted.

1) Alliance Fiber Optic Products, Inc   AFOP $.64

41,776,011 s/o as of October 31,  2008; 0 preferred s/o.
$23m cash; $937k debt.
9-month revenue up ~20%; 9-month net income .08 v .05

Founded in 1995, Alliance Fiber Optic Products, Inc. designs, manufactures and markets a broad range of high performance fiber optic components and integrated modules. AFOP’s products are used by leading and emerging communications equipment manufacturers to deliver optical networking systems to the long-haul, enterprise, metropolitan and last mile access segments of the communications network. AFOP offers a broad product line of passive optical components, including interconnect systems, couplers and splitters, thin film DWDM components and modules, fixed and variable optical attenuators. AFOP is headquartered in Sunnyvale, California, with manufacturing and product development capabilities in the United States, Taiwan and China. AFOP’s website is located at www.afop.com.

2) Alloy Steel International, Inc.  AYSI $.50

16,950,000 s/o as of December 1, 2008; 0 preferred s/o.
$664k cash; $301k debt.
Year-over-year sales $13,511,458 v. $8,729,644. Year-over-year net income: $2,507,912 or $0.15 per share, for the year ended September 30, 2008, compared to $1,308,865 or $0.08 per share for the year ended September 30, 2007.

Alloy Steel International, Inc., together with its subsidiary, Alloy Steel Australia (Int.) Pty Ltd., engages in the manufacture and distribution of Arcoplate, a wear-resistant alloy overlay wear plate. It offers fused-alloy steel plates for installation and use in structures and machinery that suffer wear and hang-up problems. The company is also developing the 3-D Pipefitting Cladder process. Alloy Steel International’s customer base primarily consists of companies involved in the mining and dredging industries in Australia, the United States, South America, India, Indonesia, Singapore, South Africa, Japan, China, Canada, and Malaysia. The company was founded in 2000 and is based in Malaga, Australia. Web Site: http://www.alloysteel.net

3) Artificial Life, Inc.  ALIF $.915

47,724,132 s/o as of October 29, 2008; 0 preferred s/o.
$2.7m cash; $1.44m debt.
9-month revenue up ~400%; 9-month net income .18 v (-.03)

Artificial Life, Inc. is a public US corporation headquartered in Los Angeles, with its production center in Hong Kong and additional offices in Berlin (EMEA headquarters) and Tokyo. As a leading, full-service provider of mobile broadband 3G technology, mobile participation TV, mobile gaming, content and business applications, Artificial Life provides 2D and 3D multi- and single player rich-media applications for 3G, 3.5G and 4G network-enabled mobile phones. Recognized internationally for outstanding content quality and technology, Artificial Life transcends traditional modes of mobile communications and interactive gaming. For more information, please visit http://www.artificial-life.com or the company’s m-commerce portal at http://www.botme.com.

4) China Sun Group High-Tech Co.  CSGH $.44

53,422,971 s/o as of October 14, 2008; 0 preferred s/o.
$11.09m cash, $0 long-term debt.
3-month rev up ~ 150%; 3-month net income .04/sh v .01/sh

Recent News:
China Sun Group High-Tech Co. Develops New Product ‘Lithium Iron Phosphate’

China Sun Group High-Tech Co., (“China Sun Group”) produces anode materials used in lithium ion batteries. Through its wholly-owned operating subsidiary, Dalian Xinyang High-Tech Development Co. Ltd (“DLX”), the Company primarily produces cobaltosic oxide and lithium cobalt oxide. According to the China Battery Industry Association, DLX has the second largest cobalt series production capacity in the People’s Republic of China. Through its research and development division, DLX owns a proprietary series of nanometer technologies that supply state-of-the-art components for advanced lithium ion batteries. Leveraging its state-of-the-art technology, high-quality product line and scalable production capacity, the Company plans to create a fully integrated supply chain from the primary manufacturing of cobalt ore to finished products, including lithium ion batteries. For more information, visit http://www.china-sun.cn

5) Dynavax Technologies Corporation  DVAX $.84

39,854,265 s/o as of October 31, 2008; 0 preferred s/o.
$64m cash and securities; $0 long-term debt.
9-month revenue up ~ 400%; 9-month net loss (-.60/sh) v (-1.21/sh)

Recent news:
Dynavax ends deal with Merck for Hepatitis B vaccine
Dynavax signs development deal with Glaxo

Dynavax Technologies Corporation, a biopharmaceutical company, discovers, develops, and commercializes Toll-like Receptor 9 (TLR9) agonist-based products to treat and prevent infectious diseases, allergies, cancer, and chronic inflammatory diseases using proprietary approaches that alter immune system responses in specific ways. The company’s TLR9 agonists are based on immunostimulatory sequences (ISS), which are short DNA sequences that enable the immune system to fight disease and control chronic inflammation. Its product candidates include TOLAMBA, a ragweed allergy therapy in Phase II clinical trial; a therapy for metastatic colorectal cancer that is in Phase I clinical trial; and a therapy for hepatitis B in Phase I clinical trial. The company’s preclinical asthma and chronic obstructive pulmonary disease (COPD) program is partnered with AstraZeneca AB. It has a strategic alliance agreement with GlaxoSmithKline plc to discover, develop, and commercialize novel inhibitors of endosomal Toll-like Receptors for the treatment of immuno-inflammatory diseases. Dynavax Technologies Corporation was founded in 1996 under the name Double Helix Corporation and subsequently changed its name to Dynavax Technologies Corporation. The company is based in Berkeley, California. Web Site: http://www.dynavax.com

6) Heartland, Inc.  HTLJ $.25

41,783,107 s/o as of November 1, 2008; 2.37m preferred s/o.
$856kcash; $1.5m long term debt
9-month rev up ~ 50%; 9-month diluted net income .035/sh v (-.02/sh)

Heartland, Inc., through its subsidiary, Mound Technologies, Inc., engages in the fabrication of structural and miscellaneous steel products. The company offers structural steel, miscellaneous metals, steel stairs, railings, bar joists, and metal decks to general contractors and fabricators in the United States. It also provides erection services. The company was incorporated in 2002 and is headquartered in Middlesboro, Kentucky. Web Site: http://www.heartlandholdingsinc.com

7) ZAGG  Incorporated  ZAGG $.93

19,143,995 s/o as of November 12, 2008; 0 preferred s/o.
950k cash; 24k long-term debt.
9-month revenue up ~ 300%; 9-month net income .05/sh v (-.07/sh)

ZAGG Incorporated designs, manufactures, and distributes protective coverings for consumer electronic and hand-held devices under the brand name invisibleSHIELD primarily in the United States and Europe. Its invisibleSHIELD, a protective film covering designed for iPods, laptops, cell phones, digital cameras, personal digital assistants, MP3 players, watch faces, GPS systems, gaming devices, and other items. The company also offers RockStic portable speaker system designed for Apple iPod and compatible with various digital media players. In addition, it sells accessories for electronics devices, including power cords, chargers, and adapters. In addition, the company offers approximately 2,000 precision pre-cut designs through online channels, resellers, college bookstores, Mac stores, and mail kiosks. ZAGG Incorporated sells its products directly through its Web site, distributors, kiosk vendors in shopping malls and retail centers, and electronics retailers. The company was founded in 2005 and is based in Salt Lake City, Utah. (from stock board – The 4.2 million warrants at 1.20 a share create overhead resistance). Web Site: http://www.ZAGG.com

CLFD, GNLB, and HAUP

I got a trial membership at Vectorvest.com this month. They currently have a buy recommendation on three stocks within our wheelhouse:

CLFD 1.26  +.12

HAUP 1.12 +.02

GNLB 1.29 +.01

CLFD and HAUP both have marketcaps below cash value.

Xenonics Fiscal 2008 Revenue Doubled to $10.2 Million

XENONICS HOLDINGS, INC. (AMEX: XNN) announced today that revenue for the fiscal year ended September 30, 2008 increased 104% to $10.2 million from $5.0 million for fiscal 2007. The net loss for fiscal 2008 narrowed to $1.4 million, or $0.07 per share, which included $963,000 in R&D expenses and $241,000 in non-cash stock-based compensation expenses. For fiscal 2007, the net loss was $4.0 million, or $0.22 per share.

“Xenonics’ improved operating performance for fiscal 2008 versus fiscal 2007 was driven by higher shipments of our NightHunter high-intensity illumination devices to U.S. Army, U.S. Marines and military distributors, and sales of our patented SuperVision high-definition night vision products to more than 100 police and government agencies throughout the United States. Looking forward, with more than $11 million in Operational Needs Statements requesting funding for purchases of NightHunter 3 already submitted by military units, and the growth we are generating in our SuperVision customer base in both the U.S. and abroad, we believe that revenue can double again in fiscal 2009 and the Company can deliver a profit for the year,” said Chief Executive Officer Chuck Hunter.

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