Dig into American Oriental Bioengineering

American Oriental Bioengineering, Inc. (AOB) engages in the development and production of plant-based pharmaceutical [PBP] products and plant-based nutraceutical [PBN] products in China. Its PBP products include cease enuresis soft gel, which is used to alleviate bed-wetting and urination disorder; double ginseng yishen grain that is used for neurosis, vegetative nerve functional disturbance, and hypo-immunity; root of red-rooted salvia tablet that improves blood circulation and blood flow to the coronary artery to relieve pain, and is used for coronary ischemia and angina pectoris caused by coronary heart disease; and urinstopper patch, which is used to avoid frequent urination, urinal incontinence, and bed wetting.

The company's PBN products include protein peptide products series, which offers soypeptide tablets, milk powder, and coffee; compound bio-functional beverage series derived from honey products, marine plants, and natural herbs; vitamate oral liquid that strengthens the immune system and regulate blood lipids; and urinstopper capsule, which is used as a health supplement for children suffering from bed wetting and for middle-aged and elderly adults suffering from urinary incontinence.

American Oriental Bioengineering sells its products directly to retail stores, pharmacies, and hospitals, and to independent distributors. The company is headquartered in Harbin, China.

The Scoop: The company declared on February 14th that it will be announcing its quarterly earnings on March 12th, 2007. Analysts are expecting $106-108 million in revenues and $28 to $29 million net for 2006. Institutions will take note and start scooping up this now big board stock. Until growth slows, this is a long term winner - even Cramer is warming up to it after relentlessly bashing it from $5. The recent selloff attributed to the Chinese Government investigation into drug companies - i.e. that AOB's drugs are grandfathered - is unfounded!

I would keep this in my watchlist and notice it closely until a week before earnings, and buy on any dips from here on. Be careful though, as this is a Chinese small-cap stock and you have to you have to be ready for some volatility.

AOB 1-yr chart

Disclosure: Author has no position in AOB.