2Q Stock Picks

My pick is an unloved stock. It is unloved because it is an S-chip and it operates in an industry many investors say is too competitive, and its products are commodities and so tend to be of low margin. As a contrarian....and as a value investor....to me China Gaoxian is cheap (2.6X last year\'s earnings); has growth (strong expansion in production capacity this year); has, surprise, strong profit margins as gross margin is above 30% and above 20% net profit margin. And not forgetting, it has zero debt. UOB Kay Hian has a 40-cent target price - it\'s more than 100% upside.

Was going to highlight Courage Marine a stock pick but then noticed that AK71 had beat me to it. My 2 cts worth is that Courage Marine is going to return to better times after being hit by the shipping downturn in most of 2009. Courage Marine is into dry bulk shipping - involving iron ore, coal, etc. - to China. The company has shown fantastic returns on its ship fleet in the good ol days, and I believe it will do much better this year. The stock has high volume today and in some days in the past couple of weeks. I think value investors are re-entering the stock.

Would like to add China New Town as a stock pick by readers, given its landbank in Shanghai and & Wuxi which are gonna fetch great prices compared to the cost of development. The new management has been quoted recently talking about the profitability of China New Town, and so on. Now stock is 12.5 cents with a small dividend coming. Volume is super high this morning with 12 million shares traded in just the first 6 minutes of the morning. Good luck!

admin wrote:

Bestworld, thank you for your posting but could you kindly offer some reasons for your stock pick? Bestworld wrote:

Time Watch 20.5:woohoo:

We thank you for your postings in the Time Watch thread, but for the convenience of readers, could you put some reasons in this 2Q stock picks thread?

- PE only about 5 - Management confident that 2HFY2010 performance will exceed 2HFY2009 - Continue to perform during financial crisis. - Should see greater benefits in the coming quarter for those M&A and expansion efforts that were put in place earlier.

Meiban look very attractive !! Meiban IssShrs = 332m, Mktcap = $110m ====== FY2009\'s EPS=4.6c, NAV=43.6c out of which 12.6c are cash Currently trading Cum Div 2c (will on 20-Apr ) At current price of $0.33, it\'s trading at 7.2x PE, 0.75x P/B with div yields = 6.06% !! it been paying out dividend without fail every years since at least Jun-1995 and it just amend some articles and adopted a Share Buyback program in end-Feb2010, and is renewing Share Buyback Mandate again in coming AGM next Thurs (15-Apr) ==>> may be a mini \"InnoTek\" phenomenon in the making 1) Balance Sheet\'s Cash FY2007 = $24.726m FY2008= $26.919m FY2009 = $41.835m ==> that\'s net cash of $39m or over 11c cash per share 2) Debts - almost debts free now from $20m in FY2007, reduce to $10m in FY2008 to latest below $2m for FY2009 3) Cahflow Statements ==> every year been generating CASHs Cashflow B4 Working Capital Changes FY2007=$48m FY2008=$38.2m FY2009=$34.2m Net Cash Generated from OPs FY2007 =$43.2m FY2008=$28m FY2009=$34.95m 4) Forward Commentary .......Depending on the appropriate response to changing market conditions, the Group could restructure and right-size some of its operations in Singapore and the region to maintain operating efficiency. . Besides the ongoing focus on cost and cash management, the Group will continue to seek new customers on a selective basis to expand its customer base. The Group expects to commence initial production for some new customers in FY2010. 5) Share Buybacks + avoidance of TakeOver Sure to see a significant amount of Shares Buybacks this year (FY 2010) coz Buybacks will beside other benefits, also help elevate the GOHs\' stake in Meiban to cross above the 30% level without need for making a Mandatory General Offer 6) Past Divs + Bonus distribution: Meiban had NOT issue any new shares for the past 6 yrs, Last Bonus Issue was way back in 2004-Sep BUT dividends: it had been paying Every Years without fail eversince Jun-1995 or earlier www.sgx.com/wps/portal/marketplace/mp-en...nfo/corporate_action Company Name Type Expiry Date Record Date Date Paid/Payable Particulars MEIBAN GROUP LTD DIVIDEND 20 Apr 2010 22 Apr 2010 5 May 2010 SGD 0.01 ONE-TIER TAX MEIBAN GROUP LTD DIVIDEND 20 Apr 2010 22 Apr 2010 5 May 2010 SGD 0.01 ONE-TIER TAX MEIBAN GROUP LTD DIVIDEND 21 Apr 2009 23 Apr 2009 6 May 2009 SGD 0.01 ONE-TIER TAX MEIBAN GROUP LTD DIVIDEND 21 Apr 2009 23 Apr 2009 6 May 2009 SGD 0.01 ONE-TIER TAX MEIBAN GROUP LTD DIVIDEND 11 Apr 2008 15 Apr 2008 25 Apr 2008 SGD 0.01 ONE-TIER TAX MEIBAN GROUP LTD DIVIDEND 11 Apr 2008 15 Apr 2008 25 Apr 2008 SGD 0.01 ONE-TIER TAX MEIBAN GROUP LTD DIVIDEND 5 Sep 2007 7 Sep 2007 19 Sep 2007 SGD 0.0226 NET OF TAX MEIBAN GROUP LTD DIVIDEND 24 Apr 2007 26 Apr 2007 10 May 2007 SGD 0.005 LESS TAX MEIBAN GROUP LTD DIVIDEND 24 Apr 2007 26 Apr 2007 10 May 2007 SGD 0.01 LESS TAX MEIBAN GROUP LTD DIVIDEND 18 Apr 2006 20 Apr 2006 5 May 2006 SGD 0.005 LESS TAX MEIBAN GROUP LTD DIVIDEND 18 Apr 2006 20 Apr 2006 5 May 2006 SGD 0.01 LESS TAX MEIBAN GROUP LTD DIVIDEND 25 Apr 2005 27 Apr 2005 9 May 2005 SGD 0.01 LESS TAX MEIBAN GROUP LTD DIVIDEND 25 Apr 2005 27 Apr 2005 9 May 2005 SGD 0.005 LESS TAX MEIBAN GROUP LTD BONUS 14 Sep 2004 16 Sep 2004 OFFER OF 1 FOR 2 MEIBAN GROUP LTD ENTITL. 14 May 2004 18 May 2004 STOCK SPLIT OFFER OF 2 FOR 1 MEIBAN GROUP LTD DIVIDEND 30 Apr 2004 4 May 2004 13 May 2004 SGD 0.015 LESS TAX MEIBAN GROUP LTD DIVIDEND 5 Jun 2003 9 Jun 2003 19 Jun 2003 15% LESS TAX MEIBAN GROUP LTD RIGHTS 28 Nov 2002 2 Dec 2002 OFFER OF 1 FOR 5 @ $0.22 MEIBAN GROUP LTD DIVIDEND 20 May 2002 22 May 2002 4 Jun 2002 15% LESS TAX MEIBAN GROUP LTD DIVIDEND 21 May 2001 23 May 2001 4 Jun 2001 15% LESS TAX MEIBAN GROUP LTD DIVIDEND 20 Jun 2000 22 Jun 2000 4 Jul 2000 12% LESS TAX MEIBAN GROUP LTD DIVIDEND 17 Jun 1999 23 Jun 1999 7 Jul 1999 12% LESS TAX MEIBAN GROUP LTD DIVIDEND 5 Jun 1998 11 Jun 1998 25 Jun 1998 12% LESS TAX MEIBAN GROUP LTD DIVIDEND 6 Jun 1997 12 Jun 1997 25 Jun 1997 12% LESS TAX MEIBAN GROUP LTD RIGHTS 20 Jun 1996 26 Jun 1996 OFFER OF 2 FOR 5 @ $0.38 MEIBAN GROUP LTD DIVIDEND 20 Jun 1996 26 Jun 1996 10 Jul 1996 12% LESS TAX MEIBAN GROUP LTD DIVIDEND 6 Jun 1995 12 Jun 1995 21 Jun 1995 6% LESS TAX

Dear Forumers; I tend to hold a slightly more cautious view towards the 2Q and 3Q. The small cap stocks are running again. And while it is good news, it also mean that we are nearing the end of this leg of the rally. Please be careful. For 2Q, I also agreed with a few other forummers that Courage Marine looks pretty good. Fundamentally, the Company is solid in net cash position. Track record, the management has shown its capabilities in utilising second hand vessels to reap maximum returns. Prospects, the near term outlook has also improved vastly given the credit loosening and the surge in oil price has resulted in coal price picking up too. Lastly, I heard that the management has been meeting investors since the announcement of the FY2009 results. To me, this is an indication that the outlook is improving and management are taking a more proactive approach to engaging shareholders. Definately a stock that I am keeping in my radar screen.