Newsletter Watch: Favorites for 2008
Today, we look at a trio of stocks that could be considered micro-caps, as their market capitalizations are all well below the $100 million mark. Given their small size, readers should be aware of the inherent risks; nevertheless, not only is each selected by a top newsletter, each is also selected as a favorite speculative stock for the coming year.
Tony Sagami, editor of The Asia Stock Alert, says “My favorite speculative, home-run idea for 2008 is Man Sang Holdings, Inc. (AMEX: MHJ).”
“I run at a pretty fast pace when I’m in Asia as every day is packed with factory tours,” Sagami says. Despite this hectic schedule, he says, “When I was in China in May, I postponed my entire South China schedule because what should have been a one hour meeting at Man Sang turned into two full days of tire kicking and fact checking.
“Man Sang Holdings is one of the leading pearl merchants in Greater China. The company primarily sells in the U.S., Europe, and Asia such as QVC,” he says. “I’m not talking about a fly-by-night, newbie business. This company has been operating for decades ... and it’s been extremely profitable over the years.
“I’ve been doing this for 23 years,” he says, “and Man Sang Holdings is the most undervalued stock market bargain I have ever seen. I consider this an undiscovered gem.”
Tom Bishop, editor of BI Research, says, “My favorite speculative idea for 2008 is NutraCea (OTC: NTRZ).”
Rice, he explains, is the most consumed food on the planet and NutraCea has found a way to process rice bran into an “extraordinarily nutritious food ingredient/nutraceutical.
“Companies such as General Mills, Inc. (NYSE: GIS), Sara Lee Corp. (NYSE: SLE), Archer Daniels Midland Company (NYSE: ADM) and Purina want to boost the nutritional value of their products.” He says that over 500 companies have signed confidentiality agreements with NutraCea to look into reformulating their products.
“The main problem now is capacity. Its new Louisiana facilities had been delayed for six months due to relentless rains (the most in 50 years), which led to the firm missing its revenue and EPS estimates,” he says. “However, all of this 2007 stuff is more than reflected in the stock price, as disappointed investors have thrown in the towel.”
Looking ahead, he says, “The future looks bright. I see earnings of about $0.03 to $0.05 a share for 2008, and preliminarily $0.10 or more for 2009. On that basis the company trades at a single digit forward P/E relative to 2009 earnings, making this a good selection for year-ahead appreciation.”
Nate Pile, editor of Nate’s Notes, says, “My speculative favorite — a ‘swing for the fences’ pick for 2008 — is a tiny company called Wizzard Software (OTC: WIZD).
“The company has been around for a number of years doing work in various speech-to-text and text-to-speech industries, though it has also spent much of the last two years building a presence in the podcasting arena,” he says. “With the acquisition of Liberated Syndication last year, the company managed to take over the top spot as the largest podcasting network in the world.”
The advisor says that “while it remains to be seen exactly when and how Wizzard might be able to monetize that ‘top dog’ position, what is already known is that ‘the big boys’ of the digital marketplace (Google Inc. (Nasdaq: GOOG), Yahoo! Inc. (Nasdaq: YHOO), Microsoft Corporation (Nasdaq: MSFT), etc.) have not been too stingy in the past when they have made offers to buy their way into various niches of the ‘digital lifestyle’ space.
“We are not shy about admitting that our primary reason for being in the stock is in hopes of receiving a nice buyout offer from one of these major players,” Pile says.
Meanwhile, in addition to its podcasting business, the advisor is attracted to an additional product from the company called “Rex the talking pill bottle.”
“This is essentially a pill bottle that has been programmed with information regarding the bottle's contents, and when the pill bottle is placed on the other half of the device, the user hears a spoken description of what's in the bottle, how often to take said medicine, when the prescription needs to be refilled, etc,” Pile says.
He cautions that this is a very speculative story, but the advisor considers Wizzard a strong buy under $2.50 and a buy under $4.
About the Author
As a newsletter editor and financial journalist, Steven Halpern has covered the investment newsletter industry for 25 years.
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Jan 04 05:51pm
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