ShengdaTech, Inc. (SDTH)

DavidBear (24.27) Submitted: 8/01/07 5:43 PM : Start Price: $5.00 SDTH Score: 15.53

I like this stock because its estimated growth rate is somewhere between 25% and 42%, yet its PE ratio is like 14. Further, the company is holding cash and has a positive free cash flow (although I expect that to disappear for a while while they pay the capital costs of their new facility). They don't seem to be able to make enough of the nano precipitated calcium carbonate (NPCC), since they keep reaching 100% capacity after each recent expansion to their facility. They have recently improved (patented, i think) their technology to both lower their costs and improve their product. These NPCC particles are finding their way into all sorts of things, so I don't see them having over capacity anytime soon. Since they are a chinese specialty chemical company with few sales in the US, it seems that the current US housing/mortgage woes should have little effect on its performance.

In real life, I bought in today on a dip to $4.77, but I have been waiting for a while.

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