My pick - NWD( New Dragon Asia Corp.)
Sector: Consumer Goods, Industry: Processed & Packaged Goods
Company - This company mills, sells and distributes flour and related products to retail and commercial customers throughout China.
In January, NWD agreed to purchase a company that controls a state-owned noodle manufacturing facility in Chengdu, Sichuan Province, for about $3.3 million.The acquisition, in the western region of China, complements the company's presence in eastern and northern China. NWD expects production at this facility to begin in the second quarter of 2006. Also in December, the company acquired Shandong Xinlongya Distribution Co. Ltd.The acquisition is expected to enhance the profitability of the company's export business by $400,000 on a 12-month basis with export sales increasing to 12% in 2006, from 8% in 2005. In April, the company acquired a 10-year lease agreement for plant and machinery utilized for the production of soybean-derived products. The company estimated that this new line of business would contribute at least $5 million to 2005 revenue.
Reasons for the Pick
(1) Solid Costomer base, noodles to Chinese is like breads to American;
(2) Acquisitions position from regional to statewide and increased export sales;
(3) In IBD top lists several weeks;
(4) Recent pullback to fill the gap due to lack of News.
(5) Quarter report in 03/28 should stimulate movements.
Sector: Consumer Goods, Industry: Processed & Packaged Goods
Company - This company mills, sells and distributes flour and related products to retail and commercial customers throughout China.
In January, NWD agreed to purchase a company that controls a state-owned noodle manufacturing facility in Chengdu, Sichuan Province, for about $3.3 million.The acquisition, in the western region of China, complements the company's presence in eastern and northern China. NWD expects production at this facility to begin in the second quarter of 2006. Also in December, the company acquired Shandong Xinlongya Distribution Co. Ltd.The acquisition is expected to enhance the profitability of the company's export business by $400,000 on a 12-month basis with export sales increasing to 12% in 2006, from 8% in 2005. In April, the company acquired a 10-year lease agreement for plant and machinery utilized for the production of soybean-derived products. The company estimated that this new line of business would contribute at least $5 million to 2005 revenue.
Reasons for the Pick
(1) Solid Costomer base, noodles to Chinese is like breads to American;
(2) Acquisitions position from regional to statewide and increased export sales;
(3) In IBD top lists several weeks;
(4) Recent pullback to fill the gap due to lack of News.
(5) Quarter report in 03/28 should stimulate movements.