Date updated:06-30-2007
I look for low PEG (PE/Growth) stocks that have decent sales and earnings visibility into future quarters. I like stocks that are currently profitable and poised to grow faster in the future by taking advantage of clearly identifiable trends. Ideal candidates for purchase are selling at a substantial discount to a sustainable rate of LT growth. I rarely assign a forward growth multiple greater than 15x, so a lot of my picks were purchased when they were selling at 6-9x my estimate of fully taxed, fully diluted eps looking out one year.

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CPHI.OB
Cphi.ob - $0.00
- N/A
- $N/A
Chinese generic pharmaceutical company. On pace to earn 0.20 in FY06, trades at 1.45 currently. Q4 should be its strongest quarter, and management has indicated they can grow sales and earnings next year at +30%.

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CAGC.OB
China Agritech In - $2.84
- 0.00%
- $N/A
Organic fertilizer company located in China. Has worked to increase capacity this year, which is a transition year for them. By year end, they should have 160% additional capacity for producing their organic fertilizer. Sales growth could be explosive next year, but I'm a little concerned about margins in the first half of the year as they ramp up. TTM PE of less than 10x

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TBYH.OB
T-bay Holdings In - $0.35
- 0.00%
- $N/A
Completely unknown handset design company in China, D/B/A "Sunplus" but trades under the name T-Bay Holdings. They have done a pretty decent job of managing their cash flow and sales growth, while keeping margins high and eps strong. Closest match that most might know is CNTF, although Sunplus's technical expertise isn't as great. This has actually helped them, as CNTF's current problems stem from the transition to 3G. TBay/Sunplus has a trailing eps of 0.39 fd, and trades at 1.80. I think they can earn 0.37 - 0.44 this year.

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AIRT
Air T - $9.81
- +5.14%
- $9.49
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A. It does look like oil is taking a
breather here, but I'm not shorting it.
A. The only one I own : SLX,
too hard pick a winner out all of them
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