Advanced Battery Technologies (ABAT) Announces New Contract

Advanced Battery Technologies Announces New Contract

What is interesting here is that you have a $45 million company (2Q'07-2q'08 revenue) that just signed a contract for $27 million and the stock only moved up 8%? That just shows how beaten down investors are right now. I hope to buy some shares at current levels over the next few months. I think, in the long-term, they'll pay off handsomely, as Lithium Ion Batteries become more popular in vehicles.

One interesting sidebar is A123 Power, which was to go public late in the summer/this past fall. The private company never got their IPO done and it should be interesting to see what kind of buzz there is with oil coming down and gas prices coming down. Those folks were working with GM and their Chevy Volt batteries for cars.

ABAT does LI-ION batteries for electric bicycles, scooters, Buses and, in the future, cars......The technology still has a way to go but I like a company that actually makes $$$ in a business where too many competitors lose $$$ by buying marketshare (low margin sellers) or overinvest in overhead WAY too early in the game. Based in China, where most manufacturing happens, this is an interesting company to watch over the next few years.

Dan Ross
http://www.BetterBizIdeas.com

ABAT & Stock Price movement

From a post I made on a stock message board a few days back...

"The stock is CLEARLY going to $3. I agree with those levels and stated that, if $3.65-$3.75 was broken that $3.00 was the likely next point "

Well, 3 days have past now and ABAT is quickly approaching $3.00. At $3.00 I'll be buying some ABAT shares for sure.

Dan Ross

http://www.BetterBizIdeas.com

Lithium Ion Batteries (ABAT) and Hybrid Automobiles...

Lithium Ion Batteries far out from deployment in cars

http://www.reuters.com/article/technolog... <--not with oil at $100! and http://seekingalpha.com/article/95552-en <--disagrees re: lithium ion and their mass deployment in cars anytime soon but has a biased opinion based on stock interests (my 2 cents). and LG Chemical states that Lithium Ion batteries will rule the hybrid world for the next 15-20 years http://news.yahoo.com/s/nm/20080917/tc_n...

Hopefully everyone can form their own opinions. My 2 cents is that LI-ION WILL become the standard, they will make improvements in the technology and that A123 Power Systems (a filed IPO for later this fall) will likely lead to an increase in ABAT's stock price.

Dan Ross
http://www.BetterBizIdeas.com

ABAT takes it on the chin today

A few days ago I commented that I thought ABAT (Advanced Battery Technologies) would likely trend downwards towards $4.00 and then likely $3.75.

Well, I didn't expect it to come so soon! ABAT hit $3.75 today as the stock price gapped down today on negative U.S. PPI data and other weak economic news. While the stock price recovered and closed near intraday highs I think $3.75 levels will be re-tested and I am concerned the stock might make a run through those levels and head to $3.00.

I have cash going into my trading account (from savings) for such an event. I think that ABAT raised their outstanding shares by 6% but capacity by 165%. Given that the shares were issued near $4.50 and options near $5.50 I am HIGHLY confident re: future potential upside in the shares from today's levels. Nonetheless, I'll be patient and wait.

Why wait? I think the stock market is rolling over and going to re-test lows see in July.



The financials appear to be getting beaten up again on concerns of liquidity again.

Given all the recent settlements re: auction rate securities and other bond related items such a concern seems logical. I am not sure re: everyone's capitalization but additional bank failures are HIGHLY likely based on what the FDIC has been saying.

http://www.thestreet.com/s/most-read-bank-stocks-headed-to-zero/newsanalysis/stockpickr/10433780.html?puc=_htmlbooyah

Dan Ross

http://www.BetterBizBooks.com/

ABAT - trading action not looking good

I should have posted this earlier but I liquidated my ABAT position so that I could buy another stock. I thought there was greater upside with the other stock, ABAT trading / momentum had slowed and I was getting skittish re: lack of continued movement upwards. When the 5 day moving average went below the 20 day moving average (crossed negatively) I got worried.

So what happened? I sold around $5.50 and then the company came out and announced a secondary offering. That offering, at $4.40 or so per share, took the stock down. The company needs cash to retrofit buildings C & D (currently empty) and to retrofit their A & B buildings to increase capacity/efficiency. When everything is said and done their capacity will go up by 165%.

Now, if I was them I would have taken on DEBT as the stock was undervalued, sold at TOO low of a price, and diluted existing shareholders. Since then the stock has been sliding and is near $4.50 today and likely headed to $4.25 very shortly with $3.75 possible based on previous trading action.

I will step in and buy some shares after I see a bottom as I think the company's business is phenomenal and I think these guys are really plugged in close with the PRC gov't officials, which should help them in getting contracts. They will be moving out of small batteries into larger capacity batteries trying to lure large auto manufacturers to utilize them. They currently sell their product to motorcycle companies, electric bike companies (HUGE market in China) and Zap Auto (http://www.zap.com/). I'll be revising my target price here in the next few weeks after I look at their recent EPS announcement closer. Revenue growth has slowed to 53% annual but Y-Y EPS growth is 100% +.

http://biz.yahoo.com/pz/080811/148341.html

Dan Ross
http://www.BetterBizIdeas.com

Updated ABAT charts/comments

ABAT has held its uptrend really nicely and appears poised to make a run at the high a few weeks ago near $6.25. If it gets above that $9 + is possible based on technical analysis.

With the Olympics coming up in Beijing + their electric powered batteries powering some cars / buses there (for show) it should be interesting to see if there are any announcements.

Oh, and their lithium ion batteries are at work in the Color Changing Water Center with CREE's LED technology if anyone is interested.....

http://stockcharts.com/charts/gallery.html?abat <--just change the ticker and use this resource. They estimate a $12.25 target with the P&F Charts for ABAT & my target was $11-$12 so it is nice to see this.....

Dan Ross

http://www.betterbizideas.com/

Investing in Chinese Stocks - Some great resources

How do I find out about fast growing chinese companies, listed on the AMEX, NYSE or Nasdaq (ie. they have to comply with SEC standards vs. OTCBB stocks)? A ffew folks have asked me this in recent days so I'll toss some of my tools out here since anyone can access them.

Here are two resources - Between the two of them you can find tons of info. about the companies, those that worth a darn, etc.
http://www.tf1188.net/red.asp

http://chinabizfocus.com/modules/InvestChina/

What do I look for in a company?
1) HUGE revenue growth - 50% + annual with 75%-100% desired. I'd like to see $25 million + in sales as well.

2) I want reasonable prices (growth at a reasonable price - GARP investing)

3) I want PROFITS. I HATE buying companies that don't make $$$. It wreaks of not managing a business/bottom line. Companies that have a profit orientation (like the $$$ were their own) have higher ROE (return on equity) and generate larger shareholder returns over the long-term (just my 2 cents/opinion from what I have seen over the years.)

Resources I use

http://www.caps.fool.com

I use that site and check growth rates, info. about the company, etc.

Another great resource for looking at Q-Q trends, Y-Y trends, key stats and income statement/balance sheet info. is http://www.finance.yahoo.com

Here is what I look for
http://finance.yahoo.com/q/is?s=ABAT&annual <--annual income growth
http://finance.yahoo.com/q/is?s=ABAT <--quarterly growth to look for growth or lack thereof

Balance Sheets - I don't like companies with tons of debt. Heck, I would like to see nearly no debt at all! I would also like to see positive cash flow from operations

http://finance.yahoo.com/q/bs?s=ABAT&annual
http://finance.yahoo.com/q/cf?s=ABAT&annual

Great stockchart websites with technical analysis capabilities and good views/snapshots.

http://www.StockCharts.com
http://www.BigCharts.com

Sometime this weekend I'll post a list of Chinese companies listed here that are growing fast and furious, by sector. Maybe I can help you find a great company to invest in. To each their own re: investment style/thesis.

Dan Ross
http://www.BetterBizBooks.com

ABAT up another 12% today when market down 3%

Dow down 300 or 3+%. Nasdaq off 3.5% & ABAT was up over 12% today alone.

My take. I had a $9-$11 target for ABAT by YE and this thing is progressing as I hoped it would. I've got shares at $3.75, some more a hair above $4 and then some at $4.75 & $5.10 earlier this week.

What made me purchase more stock?

1) I saw the MACD weekly curve still nowhere near overbought

2) I saw a daily avg. bullish sign (price was approaching 8 day moving avg, which I expected it to bounce off of

3) Rusell 3000 add on Friday would cause top micro cap funds to purchase the company as they know they have to purchase this stock to keep pace with that index. By not buying "DOGS" they can outperform the index but no one wants to be underindexed on a company that is expereincing huge sales/profit growth. If they want to overindex they might purchase a % higher than the index. I am sure the Russell 3000 announcement is driving quite a bit of this.....and increasing awareness of the company's fundamentals on the street.

My goal....Hopefully $6 tomorrow as the stock went up today on HUGE volume, just like last week......I feel very good about the next few weeks with the stock. At some point it will have to take a break/breather but I am hoping it stays above the 20 day simple moving average the entire time & I would love it if it didn't drop below the 10 day moving average on a closing price basis. Doing that might cause me to lock in some prices.

Given that the company just broke through previous resistance some TA people would say that that $5.60 will now be support area (on any pullbacks) and that the new target is the prvious 52 week high of $9.11. If I do that I'll be partying it up! WOO HOO!

Dan Ross

http://www.BetterBizBooks.com

ABAT (Advanced Battery) up 20% today

Rumors of Lithium Ion orders related to cars is driving up the stock price. I have also heard a rumor re: Russell 2000 add but I haven't been able to verify as of now. I haven't had time to be frank about it.

I think the company is a $9-$11 stock so seeing a breakout on ENORMOUS volume was a pleasant thing to see today. The stock closed above its 200 day moving average (another HUGE plus). We'll see if the stock gaps up again tomorrow and continues a run up. $5-$5.50 has proven to be a troublesome price ceiling in recent months. If the stock could get through $5.50 a run to $8-$9 isn't inconceivable based on historic prices.

Dan Ross
http://www.betterbizbooks.com/

Interesting Electric Vehicle Debut yesterday

Wonder why the stock may have run up so much?

http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20080616/BUSINESS02/806160335

Interesting.....Notice how they say they are looking for lighter lithium ion batteries? Then guess which stock went soaring....

Oh yeah, and after rumors abounded re: Toyota and their need for more Lithium Ion sources

Another stock of mine has been hijacked my rumor mongers! I'll enjoy the ride up in the shor-term, book some gains, and let the rest of it ride (hopefully)

Dan Ross
http://www.betterbizbooks.com/

American Battery (ABAT) & Electric Scooters

Wonder what is driving some of the enormous revenue/EPS growth the company is posting each quarter/year? Read this article and it may amaze you :)

http://www.evworld.com/article.cfm?archive=1&storyid=1449&first=2806&end=2805

The one thing the article doesn't talk about enough is the ENORMOUS migration to cities in China from the rural, farming outskirts. As more folks move to the cities and travel (as they develop a middle class) this form of travel is MORE AND MORE common in China, especially when going to work!

Dan Ross
http://www.betterbizbooks.com/

CPSL update

FYI

http://www.thestreetwatch.com/

If CPSL = $1 billion = roughly a $17 stock. The Shanghai index closed up 2.2% today. Back “off to the races” either today or Thursday…In my opinion this thing is going to run higher through the end of next week, taking an occasional breath as it outstretches some of the shorter-term averages and some people take some profits.

Steel prices going higher per the article below
http://shoppingcart.reuters.com/news/articlenews.aspx?type=reutersEdge&storyID=2008-05-19T182142Z_01_N19518334_RTRUKOC_0_US-STEEL-PRICES.xml&WTmodLoc=HealthNewsHome_R3_reutersEdge-1

FYI, pick #3 reacted as I thought it would. The stock was off 15% but I still LOVE what I heard. Given that it is dead money and CPSL pulled back I sold that position and bought some more CPSL yesterday. I hope to build back my initial position in that other company ASAP. Right now I just think there is more ST upside in CPSL. I am about 100% positive I won't be recognizing the losses on those pick #3 (tiny loss) as the "wash rule" will likely apply. (ie. buying back within 30 days of taking the loss, meaning the loss carries forward into my new cost basis for tax purposes.)

Dan Ross
http://www.betterbizbooks.com/

ABAT & CPSL - first two stock purchases

I want to remind everyone that my investment criteria is really what is driving these investment picks. Aside from that, I want growth at a REASONABLE price. I am also sticking to micro/small cap stocks so that, in the event that one of these companies continues growing at staggering pace for the long-term, I can ride it all the way up :)

First Pick
ABAT - $3.50 purchase price. Today @ $4.19 but trending up nicely. This seems like an easy pick for me.

$9 1 year target price, which would be 28x an estimate of $0.32 for the year. Given the 100% Y-Y growth, 8 cent Q1 per earnings result, etc I could make the case for a higher price but, until I hear about expanded production capacity, which would likely crimp the EPS growth, I'll keep my estimates conservative. It would be dumb to imply a higher multiple given that I know additional capacity will likely be purchased/added, which would hurt EPS ...

http://biz.yahoo.com/iw/080512/0395840.html

1) Strong Revenue Growth
2) Strong EPS Growth
3) Very strong backlog - Likely going to add capacity as well to fuel next stage of top-line growth

Revenues for the first quarter ended March 31, 2008 were a record $10,031,969 compared to $5,363,923 for the same 2007 period, an increase of approximately 87%. Advanced Battery Technologies realized net income of $3,848,478, representing $.08 per share, after $629,445 in taxes for the quarter ended March 31, 2008. For the quarter ended March 31, 2007, the Company's pre-tax income of $1,338,036 was identical to its net income, representing $.03 per share. The 2008 quarter represents about a 187% gain in net profit.

Mr. Fu added, "Our production capacity at current normal operating hours is about $45 million per year. With a backlog of approximately $57 million for delivery throughout the next 21 months we are confident we can continue to meet our aggressive targets going forward, while still developing company favorable options to increase added production capacity. This growth reflects the continued demand for our advanced PLI battery technologies and related products. In addition, we are optimistic for the balance of 2008 and beyond.

3) Hybrid Motorcycles. If you are going to be ECO friendly this is the route to go. HUGE export opportunity + growth opportunity throughout Asian economies.
http://biz.yahoo.com/iw/080303/0369315.html

#2 Pick - CPSL (China Precision Steel) - Investment thesis is growth in middle class in china = more domestic demand for products that require steel. Simple as that.

Avg. cost of $4.80, today @ $7.96. I have made a nice paper profit on this stock so far, purchasing multiple lots at various prices. I think somehow speculators are thinking it is a play on rebuilding China following the earthquakes there in the last 2 weeks. Truth be told, they are wrong. These guys aren't doing steel for buildings but people see a potential supply/demand imbalance in the short-term and are driving this stock up on CRAZY volume.

China Precision Steel, Inc., a steel processing company, engages in the manufacture and sale of high precision cold-rolled steel products in China. The company produces and sells precision ultra-thin and high strength cold-rolled steel products with thicknesses ranging from 7.5 mm to 0.03 mm. It also provides heat treatment and cutting of medium and high carbon hot-rolled steel strips. The company's precision products are primarily used in the manufacture of automobile parts and components, plane friction discs, appliances, food packaging materials, saw blades, textile needles, microelectronics, packing, and containers. It sells its products in China, Nigeria, Thailand, Indonesia, and the Philippines. China Precision Steel was incorporated in 2002 and is headquartered in Sheung Wan, Hong Kong.

Analyst Estimates - 0.24 this year and 0.37 next year or 35% growth. $.37 x 35 multiple = my target price of $12 - $13. They are adding ANOTHER production line with the current one running at 50% capacity, which would normally worry me except their recent results show 61% top line growth!

http://finance.yahoo.com/q/ae?s=CPSL

Recent EPS announcemnt

http://biz.yahoo.com/prnews/080516/cnf041.html?.v=2

Operating income was $4.4 million, up 136.9% from $1.9 million in the third quarter of fiscal 2007. Operating margin increased to 23.5% from 16.0% in the year ago period. <--I think this is due to increased factory utilization....

Sales growth was Great!
Revenues for the third quarter of fiscal 2008 were $18.7 million, up 61.3% from $11.6 million in the third quarter last year. The increase in sales revenue is due to increased production and exports of low carbon hard-rolled steel coils and subcontracting income during the quarter.

Technical Analysis
This stock is trading its entire float of shares day in and day out. Anyone short the stock is getting crushed as the stock is getting more and more volume and going up on that volume. The weekly chart below indicates that the RSI can still go up for a bit before it is overbought so I will wait to sell any shares for the time being. Part of me wants to lock in some profits around $12 and let the stupidity decline but I will determine what I am going to do in a few days since the momentum on this is BEYOND amazing right now. I'll play it by ear. I expect the stock to take a "breather" before going higher into the $12, possibly $17 area.

I'll post pick #3 sometime in the next few days. I bought a few shares of this company last week and, while I am up slightly, I want to see how the EPS results cause the stock to shake out tomorrow. No matter how I slice it I want MORE shares at my original buy-in price so a 10% drop would be greatly appreciated :)

Dan Ross

http://betterbizideas.com/