 |
 |
A
Small Cap Looking To Go Big-Time |
|
|
 It
might be worth keeping an eye on GlobalScape Inc. (OTCBB:
GSCP) in the near future. On Tuesday they announced a stock buyback
plan - to the tune of $3 million - which would equate to about 6% of outstanding
shares. A buyback in itself is generally considered a positive sign, indicating
that management feels the stock is undervalued....so much so they're willing
to put money behind the lip service. It's also a benefit to all shareholders,
as it reduces any share dilution. While those things are nice, they're
not exactly the ultimate intent here.
 GlobalScape's
management has been looking to enhance the share price in order to qualify
for an AMEX listing. Not that it's the only requirement, but one of the
first hurdles to jump is getting the per-share price up to $3.00 or more
- and keeping it there. Currently trading at $2.79, a 6% buyback could
do the trick.
The question
is, once there, can the stock stay on the AMEX by its own merit? More specifically,
are shares going to be worth $3.00 when there are slightly fewer of them?
Some investors might argue they're already worth that (or more) even with
the current float. GlobalScape is an Internet software development company,
and a pretty good one according to the numbers. The operating margin of
24.7% is solid, as is the net margin of 15.5%. Their ROA is a nice 24.2%,
with an ROE of 28.7%. A move to the AMEX may be the final push this company
needs to really get the attention they feel they deserve.
|
|
Zhongpin:
There's Potential In Pork |
|
|
 Though
the stock got off to a rough start when it first started trading in 2005,
Zhongpin Inc. (OTCBB: ZHNP)
shares may finally have found their groove. This month's volume is the
strongest we've ever seen from ZHPN, and the overall volatility has settled
down considerably. Best of all - if you're a shareholder - is the 47% gain
made over the last four weeks. Never let it be said money can't be made
in places you'd never really think about as investment opportunities. Zhongpin
is a meat and food processing company that specializes in pork, pork products,
and fruits and vegetables in the Peoples Republic of China (PRC).
Not necessarily
exciting stuff so far, but maybe this will get your speculative gears turning....the
company was ranked the sixth largest producer in the national meat industry
(in terms of revenue) in 2005. Its customers include China-based units
of Wal-Mart, Metro, KFC, Carrefour, and McDonalds. Zhongpin also exports
its products to the European Union, Eastern Europe, Russia, Hong Kong,
Japan, and South Korea.
And as far as
meat processors go, Zhongpin seems to be a pretty good one, not to mention
being a rare 'currently-profitable' micro cap. The P/E of 20 is slightly
on the high side, but the price/sales ratio of 1.1 is impressive. Debt
is a little higher than most investors might like, but nothing unmanageable.
Gross margins are 14%, while net margins are 4.4%.
 Overall
it's a decent fundamental snapshot, but what the numbers don't quite show
is the company's improvement on all those fronts. For Q1 of this year,
revenues increased by 83.0% (to a record $55.8 million) over Q1 of last
year, gross profit increased 69.1% to a record $7.7 million, and net income
increased 77.6% to $4.6 million.
With those kinds
of numbers, it's not surprising to see a growing interest in the stock.
But what kind
of initiative leads to those kinds of improvements? Zhongpin has turned
the art of growth into a very simple science.
What's more,
Q1 may have only been the beginning of a growth spurt. In the second quarter
of 2007, Zhongpin expects to open its new production facility in southern
Henan Province, which is expected to add 72,000 metric tons of capacity.
In the third quarter of 2007, Zhongpin expects to open its northern Henan
Province production facility, which is expected to add up to 63,000 metric
tons of capacity. The company has also planned to construct a third new
production facility with up to 70,000 metric tons of capacity in the western
region of Henan, which is scheduled to be put into production by early
2008. For comparison, Zhongpin's current total production capacity for
chilled and frozen pork is approximately 177,480 metric tons.
|
|
New
Freshman, Recent Graduates |
|
|
The following
stocks have recently been added to the bulletin board listing system. Only
stocks with a viable market (volume that's relatively deep and consistent)
are presented here.
Tootie Pie
Company, Inc. (OTCBB: TOOT)
-
Last traded at 75 cents, this pie maker bakes, markets and sells high quality,
handmade pies through three primary sales channels - retail, corporate
and wholesale.
Aamaxan Transport
Group Inc. (OTCBB: AMXT)
- Last traded at 4 cents. Aamaxan is a development stage company, currently
seeking acquisitions or mergers with operating business ventures. Though
it had not conducted any business as of last year, a March SEC filing may
be the beginning of its growth. The company obviously managed to qualify
for a bulletin board listing.
We've also seen
a handful of names jump from the OTC Bulletin Board listing system to a
major exchange. Similar to the standards mentioned above, we wait to see
whether or not the stock remains viable on its new exchange before presenting
them here.
Synutra International
Inc. (NASDAQ: SYUT)
- Though headquartered in Rockville, Maryland, Synutra (through its subsidiaries)
engages in the development, production, processing, packaging, and marketing
of dairy-based nutritional products in China. It also offers nonfat dry
milk and anhydrous milk-fat. It moved to a NASDAQ listing on April 12th,
and the stock has flourished there.
Atlantic
Southern Financial Group Inc (NASDAQ:
ASFN)
- Atlantic Southern's move to the NASDAQ on April 16th hasn't exactly improved
trade volume much. However, pricing has remained stable, if not been slightly
bullish. Atlantic Southern Financial Group, Inc. is the holding company
of Atlantic Southern Bank, which offers commercial services in central
and coastal Georgia.
Dreams, Inc.
(AMEX: DRJ)
- Dreams Incorporated's April 16th graduation to the American Stock Exchange
has not been kind to the stock yet. That's a little ironic, as the company
actually paints a solid fundamental picture....a P/E of 28.9, an ROE of
14.2%, earnings are growing, not to mention the company is profitable.
Dreams, Inc. and its subsidiaries manufacture and distribute sports memorabilia
products and acrylic display cases.
|
 |
Tyler
Strikes Gold, errr, Strikes Copper |
|
|
| Tyler
Resources Inc. (OTCBB:
TYRRF) was holding the mineral exploration industry's equivalent to
a winning lottery ticket, with the winner being announced earlier this
week. TYRRF shares are up by more than 100% from where they were when they
announced there was much more copper than originally estimated in their
Bahuerachi, Mexico exploration.
How
much more? Rather than 1.4 billion pounds of copper, a third party estimates
they're actually sitting on 4.5 billion pounds. The silver estimate went
from 18.4 million pounds to 67.9 million, while zinc is expected to total
up to 6.308 million pounds rather than the original guess of 248 million
pounds.
The
news was exciting to the market for obvious reasons....it potentially improves
the revenue productivity of this particular site by 200%, or more. |
| |
|
Clean
Diesel Tech Up On Contract News |
|
|
| The
timing on this piece of micro cap news couldn't have been much better -
less than a day after we published a feature commentary about the paradigm
shift towards more ecologically-friendly energy consumption.
Clean
Diesel Technologies (OTCBB:
CDTI) rallied this week, after announcing early Monday morning they
had signed a licensing contract with German-based Bosch - a major developer/manufacturer
of automotive equipment.
The
non-exclusive license allows Bosch to use Clean Diesel's patented process
to minimize the toxic gases and other waste normally emitted in diesel
combustion. The proprietary process is a pre-emptive move to keep new automobile's
as clean and green-friendly as possible, as emission standards are slowly
being raised across the globe.
Details
of the agreement were not disclosed, but are expected to include a nominal
up-front fee, and ongoing royalty payments for the life of the contract.
Clean Diesel expects these payments to be part of 2007's revenue, which
may well mean a considerably stronger top line. Before the Bosch deal was
inked, Clean Diesel has only generated 'retrofit' revenue. The 'new market'
opportunity is expected to be much stronger . |
|
|
Updated: 9:18 am PST (17:18 GMT), January 5, 2009
