Glen’s Christmas Special Part 3/3
By
Glen Bradford
This is the last part of the Glen Bradford Christmas Special. The goal is to identify companies that are worth following that I haven’t mentioned yet. I want to overview a couple companies looking to uplist and give examples of what happens to small, growing companies.
One of my core beliefs is that as companies grow, the tendency is that more people own them. In other words, more people own larger companies. Going along with this philosophy, as companies grow, they get more shareholders. I feel that the more shareholders a company has, the more likely it will trade around what it is worth and shareholders may experience the winner’s curse. The way to take advantage of this is to own small companies priced to be small companies that are growing on the path to becoming larger companies. The same applies to exchanges. The larger the exchange, the more likely the company is closer to intrinsic value. I’ll illustrate three potential values using this framework briefly.
Starting on the pink sheets, which is the lowest of the lows, is Sino Agro Foods (OTC: SIAF). The rumor is that they’re going to be paying a dividend and uplisting to the OTC. They are currently selling less than book value, and I don’t find them excessively cheap by my absurd standards, but nonetheless they are worth more. From the pinks, the next leg up is the OTC.
China Armco (OTC: CNAM) is on the OTC, but in my opinion, not for long. It’s moving on up. This is my Grand Slam breakfast meal and part of my daily diet. If you are able to crunch numbers on the back of a napkin or a envelope, I would recommend doing so here. Keep it, you might just find yourself stopping by the framing store a couple years from today or maybe this next year looking to frame your first Grand Slam as well.
From the OTC, you start getting into the larger exchanges. In the USA, these are the AMEX, NASDAQ and NYSE. The NYSE would be the home of all the big boys, but the technology boom created room in the NASDAQ that some of the big boys didn’t want to leave. Telestone Technologies (NASDAQ: TSTC) may look expensive at first glance. Check out the forecasted growth and managements naked enthusiasm about their forward growth potential not in double digit percentages but in whole number multiples of where we are today.
And so this concludes my brief Christmas special. I’ll close by mentioning a couple stocks worth mentioning. China Gerui (NASDAQ: CHOP) is another idea to take advantage of high-end specialty steel in China. As I’ve mentioned before, that’s been heating up on the stimulus package over there. Lastly, ZST Digital Networks (NASDAQ: ZSTN) could be really cheap after popping out a darling quarter.
Disclosure: Bradford was long China Armco, and Telestone Technologies at the time of publication.