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Zack Buckley
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Zack Buckley is the founder and President of Buckley Capital Partners, a value-focused long/short equity hedge fund. BCP employs a fundamental approach that is research intensive and concentrated, generally with 10-15 core positions focused primarily in small cap equities. While BCP is... More
  • Top 50 Companies of 2010 Part 5  0 comments
    Apr 19, 2010 1:50 PM | about stocks: SIAF-OLD, CPQQ, TXIC, CADC, CYXN

     I believe that if you are planning on buying stocks buy shooting fish in a barrel, by far the best barrel to shoot in is the US Chinese small caps. Go get you’re gun. It’s been hunting season for over a year. You practically can’t miss.

    I feel it would be fun to give some color as to what’s really going on in the market lately and what you should watch out for. Inflation; don’t bet against it. Contrary to popular belief, holding cash or bonds is risky in my opinion as there will be substantial loss in purchasing power.  The latest Goldman Sachs crisis will likely be forgotten; people focus too much on macro events. For some reason, the majority of the money flooding capital markets is going into bond markets. Buying treasuries shouldn’t be anyone’s long term strategy. TIPS won’t protect you from inflation. 

    Sino Agro Foods (siaf) "Chinese agriculture is another thing I think is going to boom because it's such a wreck." ~Jim Rogers.  I agree with Jim wholeheartedly, and SIAF is one of the companies taking advantage of the boom in agriculture in China.  Based on their 2010 guidance, they are trading at a forward p/e of 4, which gives a very attractive valuation if they are able to reach those numbers.    

    China Linen Textile Industry Ltd. (OTC: CTXIF) produces over 50 types of linen yarn and 110 varieties of linen fabric and products. We would argue that it would produce holders of its common shares significant future profits if the holders choose to buy now at the current price. For a company that is arguably growing faster than 20%, the current pricing suggests no growth and the way to bet against the antagonists is to purchase. Go ahead, you can do it.

    China Yongxin (cyxn) just recently released 2009 results of $.15/share, pretty cheap for a company trading around $.60.  They are a pharmaceutical company who is expanding its retail drug stores; they expect to open 28 new stores in 2010.  They also just recently appointed four independent board members, which suggest uplisting in their future.  Our favorite. 

    China Rutai International Holdings (crui) develops cellulose ether and is trading at a p/e of less than 5.  Cellulose ether is used in the pharmaceutical industry, construction industry, food and beverage, petroleum, and cosmetics industries.  If they are able to sustain these numbers this company is cheap, if they can increase them - who knows. 

    China Advanced Construction Materials (cadc) produces concrete materials in China.  They should be able to capitalize on the growth of the construction industry in China based on the recent infrastructure investments by the Chinese government based on the 4 trillion yuan stimulus package.  Their expansion plans consists of adding portable stations in 2010 and 2011, acquiring smaller similar companies, and to add products to their mix. 

    Tongxin International (txic) is in the rapidly expanding auto industry, they build the body structure for commercial vehicles in China.  They are trading at a p/e of 5 based on 2008 net income and growing rapidly.  They will be able to expand within China and also have exports abroad that are growing in other developing nations

    China Insoline (chio) is one of the more speculative plays but will be heavily rewarding to investors if the company become successful.  It is an online insurance provider who services the Beijing area.  They have great profit margins and high returns on equity.  My main issue is I have been unable to get in touch with them, despite trying several different phone numbers and emails. 

    China Power Equipment (Cpqq) is trading at a p/e of about 10, yet they are growing at breakneck rates – net income over the past year almost triped.  They manufacture alloy transformer cores and alloy electricity transformers that are designed to step down voltage in power plants. 

    China Baicaotang Medicine (cnbi) is engaged in three segments in Guangxi province- pharmaceutical distribution, retail pharmacy and manufacture of pharmaceuticals.  They are currently at a p/e of 6, despite solid growth.  They just recently engaged Crocker Coulson for their IR, a great sign that they will uplist in the future. 

    Yasheng Group (yhgg) has had quite the month.  It's up almost 300% since they recently started filing with the SEC, which they have not done in about 3 years.  Rumors are that they are planning on completing all of their late filings and plan on eventually listing on Nasdaq.  If that occurs this 250 million dollar company could easily reach a billion.  Again this is a more speculative company, investors should carefully weigh their decision to invest.




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