Aug 27, 2010 10:04 AM PDT
SORL: Sets new 52-Week High on New Deal & Tomorrow's Q3 Report
RDEN: Gets Significant Upgrade from SunTrust
TSTC: Soars 16.86% on Earning Expectations for Close of Market Today
Gaining 9.39% this morning is SORL Auto Parts, Inc., (SORL) http://www.sorl.cn/ currently trading in the $7.95 range. SORL doubled its average daily trading volume early in today's session. SORL flew past its previous high of $7.30 set on 11-04-09 on joint venture news and Q3 expectations set for release tomorrow.
SORL has a $5 floor and has made a steady climb towards $8 for the last three months. All the money has not been made on this stock and this is a near-term 'Buy' stock for me at this price. I expect good earnings tomorrow and the stock could easily jump to $9. Part of SORL's attraction is the $108 million in trailing twelve month revenues that produced a $0.44 diluted EPS during that period better known as the 'great recession'.
When the auto-world was in a tailspin, SORL was producing earnings, which leads to another reason to 'buy' this stock; the China insulation factor. As the PRC's GDP outgrew other economies in the past 9 months, its auto industries took shelter in government subsidies and kept growing as well, thus; the $0.44 EPS of SORL.
Yesterday, SORL announced a partnership with MGR, a Hong Kong company global auto parts distribution specialist firm. SORL will own 60% of the new enterprise. SORL already sells in Asia, Europe, and the Middle East and in Africa. The new deal will strengthen the SORL toehold in Australia, United Arab Emirates, India, and the U.S. to a footprint.
Tomorrow before the market opens, SORL, a manufacturer and distributor of commercial vehicle air brake systems as well as related auto parts will release its Q3 2009 earnings.
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SORL 3-Month SORL 1-Month
Gaining 7.83% this morning is Elizabeth Arden Inc., (RDEN) http://www.elizabetharden.com/ currently trading in $13.50 range. RDEN flew past its 3-Month average daily trading volume of 149,052 this morning in the first hour of trading. The excitement came from a SunTrust upgrade from 'Neutral' to 'Buy' on RDEN. I agree, this is a short-term (6 Mo) 'Buy' stock for me.
Approximately $1.16 of its 52-week high of $14.66 set on 09-13-08, RDEN managed to bring in $0.23 in diluted EPS from $1.05 billion in trailing twelve month revenues. The chart below sets a $10 floor on the stock making a steady climb towards $14.
RDEN dipped in early November on lackluster Q1 2010 earnings, but then made a recovery and support has pushed it back to the $14 level. I believe now that RDEN is better positioned for the holidays (in part due to Wal-Mart), it will reach $15 in the near-term with a $16 potential. There's still money to be made here.
The SunTrust analyst, William Chappell, noted that RDEN's purchase last year of Liz Claiborne's fragrance portfolio boosted Elizabeth Arden's U.S. and international opportunities and that 'The worst is behind Elizabeth Arden'.
The bottom-line part of that trailing twelve month $0.23 EPS was cost cutting and RDEN has said it expects to generate between $10 million and $12 million in cost savings by fiscal 2011 or between 25 cents and 30 cents per share annually.
The Wal-Mart story is this; the company has a 'Project Impact' underway that will boost sales for all fragrance and make-up sellers allowing them 20-30% more shelf space to promote and sell their wares. RDEN is one of the top Brand Names in the business and I believe their Wal-Mart revenues will grow substantially.
On October 29, RDEN forecasted Q2 2010 earnings of $0.65-75 EPS and net sales of $380-90 million. There's still money to be made here. During its Q1 earnings report of the 29th, in a research note, Oppenheimer analyst Joseph Altobello said he remains bullish on Arden's shares.
RDEN 3-Month TSTC 3-Month
Gaining 16.86 this morning is Telestone Technologies Corp., (TSTC) http://www.telestone.com/ currently trading in the $10.25 range. TSTC flew past its 3-Month average daily trading volume within the first hour of today's session. The enthusiasm is pure expectation momentum. TSTC will release its Q3 2009 earnings at the close of market today.
TSTC has a $5 floor and has made a steady, textbook climb to $10 in 3 months. TSTC has a 52-week high of $12.28 set on 10-20-09 and it too posted positive earnings during the trailing twelve months: $0.73 on $42 million in revenues. TSTC is doing something right. 100% value increase, ¾ of a dollar earnings during the recession on a $5 floor and what are expected to be good numbers today, this is a near-term 'Buy' stock for me as well.
Even if the 'vast profit' has already been made on this stock, it is so embedded in China's technological future, that I believe it can reach and top that $12.28 high and that $2 gain over today's price is enough profit for the risk averse, conservative, sober minded investor.
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