Tag Archives: Chinese penny stocks

Which penny stock will have a huge break out next?

Which Penny Stock is due for a Huge Breakout?

 

Ever wondered where your next break will be in the penny stock market?  I do. There is so much hype about this or that company and to buy low and sell high and take your money and either reinvest or take your money and take out your initial investment and go at it again.  I am new to the game of penny stock trading.  I started with an email I received and at my son’s suggestion about me liking “penny stock trading.”  Wrong.  I invested an initial $1,000 on a, supposedly, great stock and how it was going to gain a 400% return and even if it cost .33 it was going to increase eventually to $2.00.  Well, what a highway robbery that was.  By the end of two weeks, my initial investment had gone from $1,000 to a mere $167. “What a joke!”  I thought.  How could I fall for such a scam?  That email I received indicated that the penny stock for TAGG was going to take a HUGE leap and it was going to land a $2.00 per share and to my surprise, TAGG was never brought up again by pennystock.com and they went on to another, supposedly, “GREAT” investment.

I thought to myself how I could have fallen for that one. I guess you live and learn, or do you?  Penny stocks are a gamble.  If you are not prepared to lose then I suggest you don’t invest.  Just like me, there were probably a lot of persons who received that same email and fell for the scam.  Sometimes you can have a great analyst select a penny stock and it turns around and makes you a large amount of cash. How, you might ask?  Well, one, there are analysts with a very good track record. One must make sure that those who are out there do not just do it to convince you and others to sway the buy of the stock to their favor making the stock pay more by bringing in more investors and then they sell their stock to people like us and then they run with the profits. That is no fun for a newbie like me who lost a major part of my money because I fell for the scam.  It’s hard not to, we are wanting to believe in miracles and for the most part, we get disappointed.

The truth is, we have to do our own research. We need to run comparison charts and we need to do our own online research on the companies we choose to invest.  I see that TAGG has dropped to a little over .05 and I am waiting for it to drop again so that I can purchase at least $100 more worth but for at least a million shares.  Can it happen?  It might.  The market is tricky.  I purchased 1,000,000 shares from at .0001.  It is a pharmaceutical company. Most of these will pull back up again and sell for 2 cents or more and when it does, .0001 will turn into a HUGE profit being that I purchased 1,000,000 shares for a mere $100. My $100 will have turned into a $20,000 profit minus the original $100.  Not bad at all.

So is buying penny stock a risk?  Yes, most definitely, especially when you are not ready to spend that money and not care what happens to it.  For now, I will let you know how I do on my shares.  Good luck trading.

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Longhai Steel, Inc. (LGHS)

Chinese stocks have taken a real beating as the pundits fret about a hard or soft landing, but face facts!

The Red Dragon is still the hottest growth story on the planet at a depressed 7.8% a year.

And as Beijing pumps cash into the manufacturing sector, Chinese factory names like Longhai Steel, Inc. (LGHS) are bouncing back fast!

Check out the LGHS chart gliding up an easy 50% over the last six weeks for the proof.

But even after that big move, LGHS has a LONG way to go before traders really climb the Great Wall of Worry!

You see, LGHS makes steel wire, which is then turned into nails, screws, concrete support mesh and other construction materials.

It might not be sexy but its a recession-resistant and remarkably lucrative business.

Last year, LGHS sold $608 million worth of wire and reported fully diluted net earnings of $1.12 a share.

And so far this year, 2012 earnings are tracking 36% above 2011 levels. (Read more)

LGHS has been so badly beaten up by the China bears that the P/E here is clearly well below 1 either way!

And when you factor in anticipated growth, it’s hard to imagine a value investor these metrics wouldn’t tempt!

I see a whopping $119 MILLION in assets on the LGHS balance sheet, including $4.7 million in cash.

You can do that math yourself, but if LGHS wasn’t controlled by Chinese steel magnate Chaojun Wang, it just might be ripe for an opportunistic takeover!

Maybe you’re thinking all this looks great on paper, but how do we know LGHS really has all that cash or that state-of-the-art $20 million wire factory?

For one thing, Chaojun Wang doesn’t strike me as the kind of guy who’d tolerate much funny business from lowly accountants.

LGHS is a captive customer for the hot steel billets his other companies make, so he’s got a big incentive to keep the lights on.

Skip the latte today, read the paper online and take another look at LGHS instead!

Resources:
http://ih.advfn.com/p.php?pid=squotesymbol=LGHS
http://www.google.com/finance?q=OTC%3ALGHS
http://finance.yahoo.com/q?s=LGHS%2C+ql=1

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American Jianye Greentech Holdings, Inc AJGH

American Jianye Greentech Holdings, Inc

AJGH

AJGH Chart:

Currently Trading:  $0.97

AJGH is a manufacturer and distributor of “alcohol-based” automobile fuel products in China.   AJGH is currently selling its ethanol fuels at an incredible pace and is rapidly expanding its manufacturing capacity to keep up with enormous demand.  AJGH recently landed $75 Million from the Chinese government to build new plants capable of  ‘catching up’ to the increasing demand in China for Ethanol.

While the U.S. has been rather slow in jumping on the ethanol movement, demand for Ethanol fuels in China has absolutely skyrocketed.  Roughly 20% of all Chinese automobiles (millions and millions) currently run on Ethanol.  That number is expected to grow significantly in the near future.

ETHANOL DEMAND – WORLDWIDE RECESSION?

In spite of the global recession, car sales in China have increased 20% this year alone, with no signs of slowing down.  In fact, China’s top 30 car makers plan to more than double the annual production of units (cars) to more than 31 million new cars per year by 2015.

The car market is absolutely surging in China.   45% growth in 2009, over 20% growth so far in 2010, and those numbers are only expected to increase over the next 3 years.   China is going through an automobile ‘golden age’ right now!

AJGH – INCREASING ETHANOL DEMAND

In the second quarter of this year AJGH announced expansion plans to build 2 new ethanol plants, one in Hong Kong, and the second in Northern China in order to keep up with ethanol demand.  AJGH received $75 Million in loans from the Chinese government to increase production of Ethanol!

With the numbers of new car sales increasing rapidly (more than 1.2 Million new cars per month) combined with dwindling petroleum reserves, the Chinese government has seen the importance of alternative fuel to power their rapidly growing economy.

Right now China is burning over 70 Million tons of gasoline a year, and 20% of Chinese fuel is coming from ethanol.   This means that just to SUSTAIN their growth, China needs to produce 14 Million tons of ethanol to keep pace!

Currently China only has the capacity to make 2 Million tons per year!  China needs to increase production of Ethanol by 700% per year just to ‘break even’!

This is why the Chinese government granted AJGH $75 Million in loans to build new ethanol plants!

China is heavily banking on AJGH to produce the massive amounts of ethanol needed for the country just to ‘keep pace’ with their current needs, let alone keep up with rapid growth!

This is basic ‘supply and demand!’   When supply is low, demand increases, pushing prices through the roof!   AJGH is slated to increase production by over 150% by the time their plants come online in early 2011, and China will already be burning more ethanol than local distillers can pump out.

This puts AJGH in a perfect position to capitalize on massive increases in the price of Ethanol, due the laws of supply and demand!  No other ethanol company is in a better position with the rapid growth, rapid sales increases, and the Chinese government backing them with $75 Million!

AJGH is a relatively new company.  Started in late 2009, the company went from $0 in sales, to $30 Million in sales in 6 months!    Recent third quarter earnings for 2010 we’re nearly 10 times what they were the year prior.    Current projections put AJGH at over $90 Million in sales by the end of 2010!   Off the top of my head, I can’t even think of a company that started off like AJGH!

I love AJGH’s long-term potential, as it appears that the ‘buy and hold’ investors have really been battling it out with short-term investors betting on the future of AJGH.  So far, the long-term investors are winning.

In the immediate short term, I expect AJGH to rally through the week on nothing short of spectacular earnings announcements, and would not be surprised to see it move another 30% in the next few days.

Trading was extremely strong on Monday and I see this trend continuing as more and more investors discover AJGH.  Right now AJGH is still relatively unknown, but this week it will certainly be in the spotlight, as there doesn’t appear to be any serious competition for AJGH to absolutely dominate future Ethanol production in China.

China could not be a more perfect place for AJGH as the economic/environmental situation is absolutely ripe to become a major player in China.

AJGH has enormous upside, and is still available under $1 p/share.  I really don’t see it staying under $1 for much longer.

All the indicators point to AJGH on the verge of a move this week, and the increased exposure it received yesterday is only going to bring more serious investors to the table who are looking for an undervalued stock with a ‘sky-is-the-limit’ future, like AJGH.

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