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10.20.09 TimelessWealth.net: Value investing with American Oriental Bioengineering (NYSE: AOB).
On the 19th of October, the Wall Street Journal (WSJ) released a
publication titled, "CEOs
Tally Health-Bill Score", where co-authors, Janet Adamy and
Greg Hitt discussed the causes and effects of a health bill
tallying $829 billion over the next 10 years. The essence to
this work was best described in the subtitle which reads: “Drug
Makers and Hospitals Figure to Benefit, While Insurers Brace for
a Big Hit”.
Where “timing is everything”, experienced investors begin forecasting
potential new trends and movements in the equity market. The
question is, how do we interpret a raw source of information,
for instance, the WSJ’s article, and put our money to work?
Staff at Timeless Wealth took to value companies in the
Healthcare Sector, interpreting that is where the market bulls
will head next. Our findings? Read on.
American Oriental
Bioengineering Inc., listed on the NYSE under the
symbol AOB ($4.62), encompasses the best of
both worlds: the roaring Small Cap China market, and the
currently underrated Healthcare Sector. Among debt-ridden,
overvalued Biotechnology competitors, American Oriental boasts an excess of
$100M in cash, with revenues in the last reported quarter
(period ended June 30, 2009) growing 21% compared to the same
period the in the year prior. EPS (ttm) of $0.60/share,
contribute to a P/E ratio of 7.7, less than half the industry
average (17.26). In the event the market adjusts to a valuation
based on the industry multiplier, the upside to American
Oriental could be as much as $10.35/share or a
potential 124% ROI, assuming that on the 9th of
November, American Oriental does not report
earnings growth. Bare in mind that for the second quarter 2009,
American Oriental recorded its largest net
income since the third quarter 2008. Earnings translate to
value, and value to high ROI.
AOB’s float,
consisting of approximately 62 million shares, is reportedly 18%
short. In other words, short covering or likewise events will
influence movement in the market, especially in anticipation or
the unveiling of better than expected earnings. Preceding such
an event that market may begin to appreciate, better known as
“speculation”. Staff at Timeless Wealth strongly believe that in
a market where “timing is everything”, now is the ideal time to invest in the
undervalued AOB. Where the Fundamental and
Technical Analysis agree, the market is capable of
extraordinary events. For this very reason, we offer you our
complimentary T/A (please click here to view).
While our report is designed to
cover key technical and fundamental concepts, TimelessWealth.net
strongly encourages investors review our fundamental analysis on
American Oriental Bioengineering Inc. (AOB)
with further research. All the best.
Sincerely,
Edward Stevenson.
Timeless Wealth Staff.
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