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5 Undervalued Stocks And Revett Minerals Is Turning Bullish

|Includes:Greenlight Capital Re, Ltd. (GLRE), GPRC, LLEN, RVM, XNY

The market had a solid rally since the beginning of 2013. S&P 500 made 5 year high while NYSE had 182 new highs and Nasdaq had 125 new highs on Friday. In this article, top 5 undervalued stocks are identified for investors who missed the rally and would like to research into undervalued investment targets.

The screen criteria included the following 6 fundamental and 2 technical qualifiers:

Fundamental Qualifiers

  • P/E ratio (the stock's current price divided by the company's trailing 12-month earnings) below 15
  • Revenue growth, five-year average annual sales growth, greater than 15%
  • Net profit margin higher than 15%
  • Debt-to-equity ratio less than 10% (0.1)
  • P/S (price-to-sales) ratio less than 2.0
  • P/B (price-to-book) ratio less than 3.0

Technical Qualifiers

  • RSI (14) not overbought
  • Average trading volume higher than 50,000 shares

Top 5 Qualified Stocks

Name (Ticker)

Sector

Industry

Market Cap

Price

Greenlight Capital Re, Ltd. (NASDAQ:GLRE)

Financial

Property & Casualty Insurance

834.84M

22.76

Guanwei Recycling Corp. (NASDAQ:GPRC)

Industrial Goods

Waste Management

15.41M

1.48

L & L Energy, Inc. (NASDAQ:LLEN)

Basic Materials

Nonmetallic Mineral Mining

70.13M

1.87

China Xiniya Fashion Limited (NYSE:XNY)

Consumer Goods

Textile - Apparel Clothing

68.76M

1.19

Revett Minerals Inc. (NYSEMKT:RVM) Basic Materials Industrial Metals & Minerals 94.13M 2.73
Click to enlarge

Source: Finviz.com

Greenlight Capital Re, Ltd.

GLRE is a specialty property and casualty reinsurance company based in the Cayman Islands. The company's main business includes contracts containing smaller losses emanating from multiple events and enables the clients to increase their own underwriting capacity; and severity business consists of contracts with the potential for significant losses emanating from one event or multiple events. It offers personal and commercial property, general and marine liability, motor liability, motor physical damage, professional liability, financial, health, medical malpractice, and workers’ compensation reinsurance products.

GLRE has an enterprise value of -262.64M and a book value of $24.02 per share. GLRE has a profit margin of 22.81% and an operating margin of 24.67%, ttm. GLRE has 3.83% return on asset and 18.46% return on equity. GLRE has a total cash of $1.10b and zero total debt. GLRE generates an operating cash flow of -53.84M with a levered free cash flow of -94.01M. GLRE has a trailing P/E of 5.99.

GLRE closed at $22.76 on Friday with 1.00% loss. GLRE has a relatively low beta of 0.75. The MACD (12, 26, 9) had been showing a bullish trend but the MACD difference continued to converge. RSI (14) is showing a slightly bearish lean at 45.51. The next major resistance is 50-day MA of $23.14, as seen from the chart below.

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Source: StockCharts.com

Guanwei Recycling Corp.

Guanwei Recycling Corp., operating in China and formerly known as MD Holdings Corp., is mainly engaged in the manufacture and distribution of low density polyethylene, LDPE, using imported raw material in the form of plastic waste. The company transforms plastic waste into useful plastic grains. It produces LDPE from plastic waste procured in Europe, which it recycles into recyclable LDPE for sales to approximately 300 customers. The company also sells scrap materials, which comprise plastic. It primarily serves building and construction industry, where there is an ongoing governmental push to promote the use of plastic in various products, such as water and sewage pipelines.

GPRC has an enterprise value of $2.55M and has a book value of $4.18 per share. GPRC generates a profit margin of 17.34% and an operating margin of 23.84%. GPRC has 22.30% return on asset and 33.04% return on equity. GPRC has a total cash of $13.24M and a total debt of 383.12K. GPRC generates an operating cash flow of 735.78K with a levered free cash flow of -4.27M. GPRC has a trailing P/E of 1.25.

GPRC closed at $1.48 on Friday. The MACD (12, 26, 9) had been showing a bearish trend but MACD difference continued to converge. RSI (14) is showing a bearish lean at 40.77. The next major resistance is 50-day MA of $1.75, followed by 200-day MA of $1.82, as seen from the chart below.

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Source: StockCharts.com

L & L Energy, Inc.

L & L Energy, Inc. engages in the business of coal mining, coal consolidation, and wholesaling in China with operation conducted in the coal-rich Yunnan Province in Southwest China. The company offers thermal or steam coal to state owned enterprises. It is also involved in producing, processing, and selling metallurgical coal that is primarily used in steel manufacturing process, as well as coking coal.

LLEN has an enterprise value of $78.29 with a book value of $5.02 per share. LLEN has a profit margin of 12.98% and an operating margin of 17.04%. LLEN has 6.69% return on assets and 14.02% return on equity. LLEN has a total cash of $3.77M with a total debt of 12.31M. LLEN generates an operating cash flow of $23.81M with a levered free cash flow of -68.13M. LLEN has a trailing P/E of 3.10.

LLEN closed at $1.87 with 0.53% drop on Friday. The MACD (12, 26, 9) indicator had been showing a bearish trend and the MACD difference continued to converge. RSI (14) is showing a bearish lean at 45.37. If LLEN cannot break up its 50-day MA of $1.90 and 200-day MA of $1.91, LLEN may be due for a pull back and the next support is $1.74, the S1 pivot point, as seen from the chart below.

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Source: StockCharts.com

China Xiniya Fashion Limited

China Xiniya Fashion Ltd is a provider of men's business casual apparel in China. The company designs and manufactures men's business causal and business formal apparel and accessories. The company sells and markets its products under the Xiniya brand name through a network of authorized retailers and department store chains in 21 provinces, 5 autonomous regions, and 4 municipalities.

XNY has an enterprise value of -92.69M and a book value of $3.75 per share. XNY has a profit margin of 17.41% and an operating margin of 21.67%. XNY has 11.24% return on assets and 18.77% return on equity. XNY has a total cash of $165.11M and a total debt of $4.23M. XNY generates an operating cash flow of $22.13M with a levered free cash flow of $11.70M. XNY has a trailing P/E of 1.85.

XNY closed at $1.19 with 2.46% loss on Friday. The MACD difference had been converging and moving toward zero. RSI (14) had been declining and is showing a bearish lean currently. XNY closed below its 50-day MA of $1.216 on Friday. If XNY cannot rebound and close above the 50-day MA major support, XNY could be due for a pullback.

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Source: StockCharts.com

Revett Minerals Inc.

Revett Minerals Inc. is a Silver-Copper producer that owns and operates the producing Troy Mine and the world class development stage Rock Creek project. The Troy mine is an underground copper and silver deposit that comprises 24 patented lode-mining claims and 511 unpatented lode-mining claims covering approximately 850 acres of fee land and 356 acres of patented claim land in Lincoln County, Montana. Rock Creek project is a development-stage copper and silver deposit, which comprises 99 patented lode-mining claims, 370 unpatented lode-mining claims, 5 tunnel site claims, and 85 mill site claims with 1,427 acres of fee land located in Sanders County.

RVM has an enterprise value of $64.47M and a book value of $2.64. RVM has a profit margin of 15.47% and an operating margin of 17.58%. RVM has 7.65% return on assets and 13.67% return on equity. RVM has a total cash of 32.58M and a total debt of $2.91M. RVM generates an operating cash flow of $19.67M with a levered free cash flow of $8.98M. RVM has a trailing P/E of 8.67.

RVM closed at $2.73 with 0.73% loss on Friday. The MACD (12, 26, 9) just turned to show a bullish on Jan. 10, 2013. The RSI (14) is showing a bearish lean but had come out of over-sold territory since mid December. The major resistance will be 50-day MA of $3.12 and 200-day MA of $3.39. This stock could be due for a rebound.

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Source: StockCharts.com

The top pick is Revett Minerals Inc.

The Catalyst For Revett Minerals

As reported on Dec. 3, 2012...

To Read more on the catlyst for Revett Minerals, please go to Optionity.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RVM over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Stocks: GLRE, GPRC, LLEN, XNY, RVM