AMERICAN ORIENTL BIO (AOB)

I got in after earnings release on this one. It was apparent it would be rare for them to meet expectations, so I expected a drop and got it. China plays are tough, they do not do business like us and there is a lot of speculation on mismanagement. I see it doing well once the economic jitters are out of the way, and as long as they get a handle on expenses, it looks like they misread the economy and spent far too much for the level of sales they got. It appears to me to be a mistake made by management, but certainly fixable.

Tough to see what's wrong here.

I haven't done extensive research, but earnings look good, margins are great (>15%), and debt about equal to cash.

May pick this up for real.

Upthumb. Traditional medicine products in China. Excellent cash flow. Huge sales growth. Low to nominal debt ratio. Lots of cash on-hand. Ascencio short with large short ratio. Ascencio doesn't like their lack of disclosure of subsidiaries.

May not do much in the short term as I feel too much money has moved into emerging markets over the past year, and China is due for a pullback as the US begins to recover and money starts coming back home. Having said that, over the long-term companies in China will continue to grow, even the poorly run ones, simply simply due to the massive socio-economic shift of the growing Chinese middle class. As people acquire wealth, the number one place they put it is in securing health (their own, and that of their children). The Chinese are no different, and AOB has huge advantage selling into that market- it knows it, and it sells niche products that have a cultural moat that's hard to beat. This stock is easily a 10 bagger over the next decade.

Bargain hunting

Neutraceutical!

Exceptional fundamentals and revenue growth

This companies EPS for the year is predicted to be .62 which makes the P/E for this year 4.24/.62 = 6.8.
Next years EPS is predicted to be .77 which would make its forward p/e 5.5
The industry average for p/e in this sector is 14.3

Best way to play this stock....
I am looking at the Jan 2011 $5 call options for roughly 1.1.

However this isn't a bad stock to buy right around $4.

Global Gains just downgraded AOB to Sell. I usually agree on the teams recommendations, but in this case, they are so so wrong.

AOB is a certain winner. It has all the fundamentals of a very sound company and their recent earnings report was quite positive as well. When this whole wave of bad press blows over, AOB is going to start it's march up to the double digits.

I'm still LONG on AOB. Great growth prospects here

Despite recent news of pork prices dropping demand for food will still increase as Chinas population grows so I can see this company doing well.

It's healthcare in China. That's a lot of people to sell medicine to. And there's a lot of upside here - if only management would tell us why they bought that real estate from the CEO's shell company. Hmmm.

good returrns, not bad price

great company growth and great balance sheet

A solid combination of a strong balance sheet, and growing market demand. Playing this is reality with January $5 calls.

Lots of customers in China says it all.

Investment is all about risk vs reward. Some shady accounting practices definitely don't help investors' confidence. But for the valuation, I am willing to take that risk. I believe that management of the company has learned its lesson and they would get their act together from this point on.

According to Jubak, the Chinese government is making a substantial push to expand the country's healthcare sector. American Oriental Biology ought to benefit from this initiative. The price is right at 1.04 times book value and 6 times estimated earnings in 2010 (i.e. $0.77 per share). The balance sheet is good and historical sales growth is phenomenal. Stockscouter rating is 7.

ETLY...Right timing with the right Products!

china, med. enough said