CDS - Strong Long Term Investment

Discussion in 'Stocks' started by NoDoji, Aug 19, 2008.

  1. NoDoji


    I believe this is a little-known gem that should double in value within a year. Perfect for long term investors and IRA accounts.

    I came across China Direct (CDS) in the spring when they first reported record 4th quarter 2007 earnings, then raised guidance 20%. At that point I began swing trading and day trading the stock, and made nearly $25,000 in 6 weeks trading in 3 IRA accounts and my main trading account. In May, they reported record 1st quarter 2008 earnings/revenues and raised guidance another 8%.

    CDS is a Louis Navellier A-rated growth stock and has been rated A by him throughout all of 2008. Their president Marc Siegel recently received an Ernst & Young Entrepreneur of the Year award.

    It is a very thinly traded stock that is off the institutional radar because of its low price. Several funds have recently begun to acquire shares.

    Their growth has been nothing short of amazing. They made $14 million in revenue in 2006 and $174 million in 2007; earned $169,000 in net income in 2006 and $11.8 million in 2007; earned a penny a share in 2006 and $0.67 a share in 2007. Their 2008 numbers continue to break records of growth and profitability.

    They now control nearly 10% of the world's magnesium supply, which has been a major factor in their growth. Magnesium demand is growing as a result of the need for it in manufacturing light-weight cars and aircraft.

    Aside from their magnesium segments, CDS's zinc & lead facility should be completed this month and production should begin in the 4th quarter. Their
    CDI metal recycling should begin operating in October, and their scrap tire recycling center should begin production in December. CDI Jingkun zinc should begin operations in the 1st quarter of 2009. CDS expects the tire recycling operation alone may well outdo their magnesium segments in terms of future revenues and earnings.

    The stock has declined significantly throughout the summer and despite yet another record earnings/revenue report this month, it is currently trading close to 2008 lows at $6.50/share from 2007 highs of 12.95/share.

    DISCLOSURE: I have a long position in CDS. It was tempting to trade them short term yet again, but I decided to be a good shareholder and hold on to some for the long haul :cool: