BBCZ.PK

[Ramsburg]

Profile: Bodisen Biotech, Inc. engages in the development, manufacture, and sale of pesticides and compound organic fertilizers in China. The company manufactures approximately 60 packaged products in 4 product categories: organic compound fertilizer, organic liquid fertilizers, pesticides and insecticides, and agricultural raw materials. Its products address grains, vegetables, and fruit crops. Bodisen Biotech sells its products to wholesalers. The company was founded in 2001 and is headquartered in Yang Ling, China.
Website: http://www.bodisen.com

Trading Idea:
BBC is a growth company, operating on the world's biggest market for its products: China. The company looks solid, with interesting numbers to show and great prospects.... But the reason we found BBC was primarily its technical outlook, which is very strong right now, and just plotted an interesting buying signal and trend reversal.

BBC has been trading inside a large descending channel during all 2006, yesterday and after some consolidation, BBC had a breakout with strong volume, opening the way to a large upside potential. For short term, BBC has an ascending trend line near $13, creating an attractive risk / potential ratio for a short term trade. The natural projection of the broken channel is something like $20.50, so we'll set a conservative target of $18 for this trade and a stop near $12. BBC can still retest the breakout level near 13.50, which would be normal, but we'll buy it today.

Trading Plan:
Buy BBC today at or near the open, setting a stop @ $12.00

Regards,

[bigdogs99999]

I am heavily invested in BBC and have been for a bit.  I had a position prior to a price crash in May (based on false statements on a website and a news article) and tripled it when the stock hit single digits.  I presented it to G-Force at $9 and change, and elite said steer clear at the time.  Glad I ignore the technicians when there is an amazing fundamental story.  I started tracking this stock, and then buying, a long time ago based on a post by Michael (long before he was an administrator on this site).  This stock will make serious money over time.  Management has been straight, there is 100% top and bottom line growth, and great expansion plans.  BBC just reaffirmed that its guidance has legs by signing an order that exceeds one year's previous gross revenues.  A great post from the yahoo message boards (yes, it seems an oxymoron, but is not) from marvelmeister2002 (thanks whoever you are) is cut and pasted below.  Dave
_________________
Bodisen Biotech (BBC) represents a rare combination of growth and value...with a likely "kicker" in the form of tremendous IBD-driven momentum buying moving into the stock.

BBC markets organic and liquid fertilizers as well as pesticides.China is the largest fertilizer market in the world, using about 35% of the world's fertilizer, or roughly double what the U.S. consumes. The total fertilizer market in China is about a $17 billion (U.S.) opportunity, and about a $1 billion (U.S.) opportunity for organic fertilizer, which is BBC's area of emphasis.

International companies are also targeting the Chinese market, but mostly with chemical fertilizers. BBC's products are scientifically proven to create between 15% to 35% higher crop yields while also improving soil conditions. Additionally, farmers who use BBC's products can sell their products as "certified organic green foods", which are typically sold at 50%-200% price premiums at the retail level.

The Chinese government has placed great emphasis on the development of its agriculture industry by providing agriculture subsidies, eliminating tax burdens and supporting the development of an open market-driven agricultural product industry. And there is a major push in China toward environmentally conscious agricultural development. The government is mandating support of "green" products because a history of intensive farming using chemical fertilizers has destroyed soil quality, depleted soil nutrients, decreased crop yields, and created large scale water pollution.

With this favorable market backdrop, channels including 150 wholesale distributors and 500 nationwide distribution centers, and strong brand recognition with local presence among loyal target customers, BBC is extremely well positioned for continued robust revenue and earnings growth.

Now let's look at BBC's numbers. The company reported a 75% increase in net income for 2005 to $8.8 million/ $.56 EPS, from $5.0 million/ $.33 EPS in 2004. Revenues surged to $31 million, up 91% versus the prior year.

This tremendous growth has been accelerating into 2006. For the Q1 (March) just released, EPS earned $.20 (excluding a $.05 non-cash one-time warrant charge) against $.05 last year, while revenues exploded 124% from $4.7 to $10.5 million. CEO Karen Wang commented: "We're very pleased with our continued momentum and growth moving into 2006. During the quarter, we continued to see strong demand for our products, even as we raised prices twice. Although historically our Q1 is the slowest quarter in a year, we achieved a robust gross margin of 40% and a net margin of exceeding 30% excluding the non-cash warrants issuance charge. Q2 is on track to achieve strong year-over-year revenue and earnings growth."

BBC management expects to "at least double" 2005 sales volume this year while targeting net margins of 30%. This translates into revenues for 2006 in the $62 million range with EPS knocking at the $1 plateau.

BBC's 2007 guidance is equally jaw dropping, as the company expects to again double sales year-over-year, while targeting roughly 30% net margins.

BBC has already announced a $45M contract for FY07, which is greater than their TTM revenues of $37M and strongly suggests that they will meet their lofty 2007 goals. If so, the company will be earning somewhere in the neighborhood of $2 EPS for 2007. How many other companies have you seen with 100% year-over-year revenue and EPS growth two years running that trade at a forward PE of 6.5?

BBC also has a stellar balance sheet with $26 million in cash and no long term debt- as a result, BBC has indicated that it will be able to carry out its 2007 expansion without diluting current shareholders.

BBC will be added to the Russell 2000 index this Friday, which should result in institutional buying from funds that track the Russell index. Additional institutional accumulation will further diminish the stock's already small float (which is in the 10.7 million share range). This could set the stage nicely for the real catalyst for BBC: inclusion in the IBD top 100 stock rankings.

IBD ranks stocks based on their EPS score and relative strength. EPS is the most important category. It is unclear how IBD weights the two measurements, but a 99 EPS score will always beat a 99 RS. BBC currently has a 99 EPS score and should maintain that score for the foreseeable future, thanks to very impressive year-over-year earnings growth.
BBC's RS score now stands at 83. BBC will need a 99 RS score to achieve the all-important IBD #1 rank. IBD also has a floor price for inclusion in IBD: $15. If/when BBC crosses $15, its RS score will likely be in the mid 90s. At that point, BBC would probably not be the #1 IBD stock. However, it would almost certainly be in the top 10 and I believe that simply reaching the top 10 will be enough to push the stock higher and therefore improve its RS score such that it will eventually achieve a 99 EPS and 99 RS score (for an example of how much momentum buying even a top 5 IBD berth can generate for low float stocks, take a look at IFO's performance while it held the #3 spot on the IBD list from May 15 through June 9 of this year). At that point, BBC would be the new IBD #1 stock.

An IBD history lesson illustrates how explosive this ranking can be. Look at past #1s such as TZOO, TASR, ERS, ESMC, LWAY, NGS, HRT, FORD, CUTR etc. Each of those stocks went parabolic when they hit IBD #1. ERS is the latest example. ERS is a simple aluminum distribution company that I recommended as a short at $44. The IBD momo crowd ran it from $15 to $60 in 6 weeks just because of its IBD #1 ranking. To put it mildly, BBC is a much faster growing company with vastly better prospects then ERS. In addition, I believe that BBC's EPS score is much more secure then ERS's, which is why it should remain the IBD #1 stock for a much longer time than ERS managed to. Think TZOO for an example of an IBD momo stock that was able to keep its 99 EPS score quarter after quarter.


Catalysts:

1) Inclusion in the Russell 2000 index, along with accompanying institutional buying.

2) Increased investor awareness of this undiscovered, undervalued company.

3) Inclusion in the top 10 of the IBD 100 list, and ultimately a probable #1 IBD berth.

[Ramsburg]

Thanks for sharing bigdogs99999, we are also pretty bullish about BBC now

Update:
BBC had a nice start during the morning setting a new short term high, but during the afternoon it followed the general market slow down, closing negative.  Some good news about one of its holdings went out, nothing much relevant:
China Natural Gas Expects to Report Record Earnings for the Second Quarter Ended June 30, 2006

Trading Plan:
Hold BBC with a stop @ $12

Regards,

[tokyopua]

http://biz.yahoo.com/bw/060710/20060710005192.html?.v=1

News has BBC up 3.4% in pre-market trade

[Ramsburg]

Update:
Some good News:
Bodisen Expects Better 2Q Sales Growth

BBC moved pretty well on the pre market and early session, but the overall pessimism on the broad market forced BBC down. The technical outlook changed with the last 2 sessions, BBC is now trading below the breakout level, but we'll keep the same plan since the ema50 and ema200 are slightly above our stop level and we expect them to act as support.

Trading Plan:
Hold BBC with a stop @ $12

Regards,

[tokyopua]

I decided to stop out early on this one at 12.6, as I was looking at previous gap support of 12.73, and when the price went below 12.7 on the 5 minute chart today the price drop accelerated.  hope it bounces, but in this market I am erring on the side of caution.

[Ramsburg]

Update:
So far, our stop looks to be in the right spot, BBC had a positive reaction right on the ema-50 and just made what seems to be a very bullish candlestick. We expect BBC to run up above the descending resistance line and continue it's ride to new short term highs, for now we'll let the stop at the same level.

Trading Plan:
Hold BBC with a stop @ $12

Regards,

[Ramsburg]

Some news out about one of BBC holdings:
China Natural Gas Adds Two New Natural Gas Filling Stations

Update:
BBC chart is not looking so great with the last few sessions, not being able to breakout again the resistance level, but taking into consideration the dimension of the general market sell off, BBC is not behaving so bad. BBC is still trading above the ema50 and ema200, and above Tuesday lows, which is a good sign for now, and so far we'll hold it and keep the same stop level.

Trading Plan:
Hold BBC with a stop @ $12

Regards,

[bigdogs99999]

I keep telling you guys -- sometimes you have to put your short term trendlines in the garbage can and grab hold of a superstar stock.  That is exactly what this one is!   


Second Half of 2006 and 2007 Growth Outlook Positive With Strong Product Demand and Company's Expansion Into New Markets


NEW YORK, NY--(MARKET WIRE)--Aug 14, 2006 -- Bodisen Biotech, Inc. (AMEX:BBC - News) (AIM: BODI) (website: www.bodisen.com) the first China-based environmentally friendly bio fertilizer company listed on a US stock exchange, and dually listed in London, today announced that it achieved record revenue and earnings growth from the production and sale of organic fertilizer and pesticide products during the second quarter ended June 30, 2006.
The following are some of the financial highlights for the second quarter from the company's Form 10-Q filed with the SEC:

SECOND QUARTER FINANCIAL & OPERATIONAL HIGHLIGHTS

--  Revenues grew 95% to $16.4 million from $8.4 million in the same
    period of 2005.
--  Gross profit increased to $6.4 million from $3.3 million in the same
    period last year.
--  Net Income grew 118% to $5.9 million from $2.7 million in the same
    period of 2005.
--  Net income margin of approximately 36% due to strong sales in high
    margin liquid fertilizers.
--  Fully diluted EPS increased to $0.32 from $0.17 in the same period
    last year.
ADVERTISEMENT


Mr. Bo Chen, President of Bodisen, commented: "We experienced another record quarter of revenues and earnings growth during the second quarter of 2006. Our results for the second quarter and for the first half of 2006 reflect strong demand for our environmentally friendly, high yield organic fertilizer solutions and the growing awareness of the Bodisen brand among China's farmers. Our earnings per share of $0.32 again exceeded analyst estimates of $0.25 for the quarter. Our third quarter has historically been the strongest quarter and we look forward to a great year of record growth in 2006."

REVENUES

Bodisen achieved record revenues of $16,382,189 for the second quarter of 2006, up 95% from the prior year period when the company reported revenues of $8,416,805. The growth in revenue was primarily attributable to the increase in the customer base as the company continued to aggressively market their products and the growing awareness in the agricultural industry in the markets in which they do business of the efficacy of their products.

GROSS PROFIT

Bodisen achieved a gross profit of $6,411,936 for the second quarter of 2006, up 97% from the prior year period gross profit of $3,255,664. Gross margin increased to 39.1% in the second quarter of 2006 from 38.7% in the same year ago period. The increase in gross margin was primarily attributable to the increase in the prices of main products.

NET INCOME

Bodisen achieved net income of $5,879,678 or fully diluted EPS of $0.32 in the second quarter of 2006 compared to net income of $2,692,014 or fully diluted EPS of $0.17 in the same quarter last year. The increase was attributed to a successful targeted marketing campaign to further saturate its existing markets and to also further penetrate new markets and regions throughout China.

POSITIVE OUTLOOK

Mr. Bo Chen, Bodisen's President, commented: "The market opportunity in China for environmentally friendly fertilizer products remains largely untapped and Bodisen is well-positioned to benefit from China's rising standards of living and end user consumers' demand for natural and organically grown foods and produce. With solid visibility, we are on track to reach our projections for 2006 and 2007. As Chinese farmers continue to shift from chemical fertilizers to our environmentally friendly, higher crop yield bio compound fertilizers, Bodisen will continue to reap the benefits as a leading premium organic fertilizer brand throughout China."

[Melf Elf]

I keep telling you guys -- sometimes you have to put your short term trendlines in the garbage can and grab hold of a superstar stock.  That is exactly what this one is!   

bigdogs,

since you didn't say that we also had to put our intermediate-term trendlines in the garbage can, i noticed that bbc bounced yesterday off the blue one from the january high. 

strange reaction to the good earnings, though.  opened at 13.60, tanked 15% to 11.50 at the blue trendline, then rallied to close at 12.49, but it was down slightly on the day on fairly heavy volume for this stock.  looks like they basically sold the good news, and bbc did have an 80% parabolic rally off the 8.11 June 13 low, so okay.

Second Half of 2006 and 2007 Growth Outlook Positive With Strong Product Demand and Company's Expansion Into New Markets

but, the outlook at the release of earnings in may also was excellent, and the market's reaction back then was to tank the stock 46% from a high of 15.20 at the failed trendline and 50 DMA re-test on May 10, to that 8.11 June 13 low. 

there's "sell the good news," but that reaction to may earnings that was more like a second crash in the stock than it was just "selling the good news."

   

after seeing the wicked reaction to may earnings, i wonder if they're going to take bbc down again, and fill those june gaps.  i dunno.

near term resistance is 13.75, printed on july 27, july 31, and again yesterday morning.  a print of 13.76 would take that out to the upside, which should be a plus for the stock, technically.  i didn't put a short-term trendline there.  it was too far for me to reach to the garbage can to get one. 

 

applause for your post on the earnings.  bbc is an interesting stock.

[Melf Elf]

there's "sell the good news," but that reaction to may earnings that was more like a second crash in the stock than it was just "selling the good news."

The reaction to August earnings hasn't been any better.   

after seeing the wicked reaction to may earnings, i wonder if they're going to take bbc down again, and fill those June gaps. i dunno.

The June gaps are filled now.

Near-term technicals:

1. September 27 - gap down below the channel (blue)

2. October 4 - failed re-test of the broken channel, at 9.74

3. October 10 - closed at 8.67, below the May 1 Crash low.

4. "Possible" little W-bottom here if it can hold, and knock out 9.74, but it's a skimpy pattern.

Technically, I'm not surprised to see this stock back at this level, but given what seemed to be very good fundamentals, I am surprised.

Due to the extremely thin volume, I wouldn't consider it for a trade, but I think it's worth considering for an investment if/when the chart shapes up.

Anybody still following news/fundamentals on BBC?  Has the outlook worsened? 

[AussieTrader]

BBC reversal on Q3 guidance:

NEW YORK, Oct. 18, 2006 (PRIMEZONE) -- Bodisen Biotech, Inc. (AMEX:BBC)
(LSE:BODI) (website: www.bodisen.com), the first China-based environmentally
friendly bio-fertilizer company listed on a U.S. stock exchange, and dually
listed in London, today announced that the company expects to report strong
year-over-year revenue and net income growth for the quarter ended September 30,
2006. The company expects to report its third quarter financial results by
November 15, 2006. 
"We continue to make progress on all of our strategic initiatives, which
include the build out of additional factories in China's northwest agricultural
province, and we look forward to discussing our final third quarter results and
progress by November 15, 2006," said Bo Chen, president of Bodisen Biotech. 
For the third quarter ended September 30, 2005, the company recorded $10.5
million in revenues and net income of $2.9 million, or $0.19 fully diluted EPS.

[Melf Elf]

Thanks for the update, Aussie.  Applause.

Due to the extremely thin volume, I wouldn't consider it for a trade, but I think it's worth considering for an investment if/when the chart shapes up.

I gave strong consideration to buying BBC in the mid-8.00s after my post last week, with a stop below 8.11, especially seeing those little Bullish Inverted Hammers and Bullish Hammers show up on the chart, but the thin volume put me off it. 

MACD ticked above the signal line on October 17, prior to yesterday's Bullish Semi-Island Reversal (the island is circled in green) back into the channel, on very heavy volume for this stock.

2. October 4 - failed re-test of the broken channel, at 9.74

The key 9.74, where BBC got rejected on the channel re-test, got taken out.  That looks very nice.  Wasn't watching it, though, again due to the low average daily volume. 

It will be interesting to see how BBC responds to earnings this go round.  The last two responses were awful.

Good luck if you have it, Aussie!

[Amarens]

I still have it...  Missed the 3SOF sell mail and figured I might as well sit it out after that... :-[not so smart.

So, only 40% more to go

Good luck,
Amarens

[Melf Elf]

I still have it...  Missed the 3SOF sell mail and figured I might as well sit it out after that... :-[not so smart.

So, only 40% more to go

Good luck,
Amarens

Amarens,

Applause for your honesty, and for sharing that.  We've all done a "not so smart."

What's in your favor with this one is the fundamentals appear to great, and even if that changes a little, they've still got earnings and what would seem to be great prospects.

The problem is that the technicals have been trumping the fundamentals since the Crash.  There's an overhang of supply from those who didn't get out, and they've sold the reflex rallies back into the teens.

The stock getting smashed on the last two excellent earnings reports is evidence of that.  When players buy a stock at, say, $14.00 on great fundamentals, then see the stock go into the $8s on THREE occasions, the great fundamentals cease to matter.  The Fear Factor begins to dominate when players are sitting on that kind of paper loss.

Yesterday, BBC gave back 43% of the prior day's white candle, which was good news about Q3 guidance.  There's certainly no reason for that kind of give back when the fundamentals are so strong. 

It was more technical selling of good news, right at the down-trending 50DMA near 10.80.  The high, prior to the channel break, was 10.82, so that was DOUBLE resistance there.

9.74 is next support.  That's where the re-test of the broken channel failed, and it was short-term bullish for that number to get taken out to the upside on Q3 guidance.  It would be additionally bullish if 9.74 becomes support here. 

If it isn't support, BBC likely is in for a re-test of the bottom of the channel, which comes in today at about 9.33.   Also bullish if it can hold that this time, and if BBC can then knock out 10.80-10.82 DOUBLE resistance.

Good luck, Amarens!