Sunday, June 6, 2010

My latest article on Geo Investing

For the people who missed my article on

As a long-term contrarian value investor I am always looking for growth stocks that are fundamentally mispriced. My 3U approach Undervalued, Underowned and Unloved plays an important roll in my investment decisions.

That is why I prefer OTC stocks. The four stocks in this article can be big winners in the future and have in general the potential to list on a major exchange. One of them already got an uplisting this year.

The first company I like is China Kangtai Cactus Bio-Tech (CKGT). The company is a leading grower, developer, producer, and marketer of cactus-derived products. Cactus has been used since ancient times as both a food and as a medicine for its health benefits. A powdered form of Nopal has become popular in modern times as a treatment for a variety of metabolic, digestive and heart problems. I think this company can capture a significant portion of the natural health industry in China but also abroad with their cactus products.

Another company that I like is a survivor from the ashes of the internet bubble Artificial Life (ALIF). This company is a leading provider of broadband 3G content and technology solutions in the world, they develop and sell a wide range of mobile applications for 3G, 3.5G and 4G network-enabled mobile (smart) phones. With the strategic investor 3M on board I think they can expand their businesses in other areas. The downloads for their iPhone and iPad applications has started very well and they achieved many #1 rankings for their mobile games all around the globe. Also the upcoming launch of various iPhone games in Asian languages has to give revenues a boost.

Lotus Pharmaceuticals (LTUS) is another company that I like. They are a growing developer and producer of drugs and a licensed national seller of pharmaceutical items in China. Because of uncertain dilution issues the stock trades at depressed levels. Dilution is in my opinion under control because of the type of financing (Standby Equity Distribution Agreement). This is basically a type of line of credit for when Lotus needs money in addition to their cash flow.

The last one I believe has a bright future is the uplisted SkyPeople Fruit Juice, Inc. (SPU), a highly integrated producer and distributor of fruit juices, fruit juice concentrates and other fruit and vegetable products. They just did a public offering to speed up their growth initiatives. If they can brand their juices like some famous beverage producers did many years ago we are looking to the new Coca Cola.


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