China Expert Charges Up Advanced Battery (ABAT)
Posted Nov 10th 2010 10:40AM by Steven Halpern
Filed under: International Markets, China, Newsletters, Stocks to Buy, Green Stocks
"China is quickly becoming the global leader in the development and production of alternative energy technologies," says Keith Fitz-Gerald.
The editor of The New China Trader suggests, "One way to play the trend is with Advanced Battery Technologies (ABAT), which engages in the design, manufacture, and marketing of rechargeable polymer lithium-ion (PLI) batteries.
"Founded in September, 2002, Advanced Battery Technologies is officially based in New York. However, it also keeps executive offices in Beijing and Hong Kong, while its manufacturing facilities are in China -- so for all intents and purposes this is a Chinese company.
"The company's PLI batteries are used in electric automobiles, motorcycles, mine-use lamps, notebook computers, and walkie-talkies, as well as other electronic devices.
"With hybrid vehicle technology moving closer and closer to the forefront of many global automakers' agendas as the world attempts to move away from fossil-fuel-based transportation, ABAT's PLI technology could fuel (pun intended) company profits for years to come.
"Speaking of profits, from 2007 to 2009, the company saw revenue and net income increase an average of 43.85% and 45.2% (respectively).
"That's great growth, and with a share price of only $3.99 and a PE of merely 7.70, this company is cheap.
"It sports a very impressive 42.11% profit margin and equally impressive 25.55% ROE, not to mention, it is sitting on $62.4 million in cash and has no long-term debt.
"With a market cap of just $270 million, ABAT still has enormous room to grow in the future. As a matter of fact, Wall Street tags a one-year estimate on the company at $6.00.
"But considering it has beat its last three earnings estimates by an average of 59.04%, I wouldn't be surprised to see the company exceed that price target.
"Buy a 50% position in Advanced Battery Technologies under $4.60 and plan on adding the remaining 50% if ABAT trades below $3.50."
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