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Welcome to Profit Confidential • Tuesday, May 22, 2012

If You Can Stomach the Risk, Put Your Money Here

Wednesday, November 22nd, 2006
By Mitchell Clark, B.Comm. for Profit Confidential

I have to mention American Oriental Bioengineering Inc. (AMEX/AOB) once again. This pure play China company is in the business of developing and selling plant-based pharmaceutical products and plant-based nutraceutical products that it distributes throughout China and Asia.

It is difficult to get a real sense for the plant-based pharmaceutical industry in China, but if there’s one country in the world that believes in these products, it is this red tiger.

The company is registered in Nevada, has a corporate office in New York, and maintains its production and research facilities in China. It was first founded in 1970 and was listed for trading on the OTC bulletin. The stock’s been trading on the American Stock Exchange since July of 2005.

The company’s line of plant-based pharmaceuticals has more than 80 products, while its plant-based nutraceuticals have more than 20 products featuring what the company calls “double soybean peptide tablets.”

Recently, American Oriental announced its preliminary financial results for the third quarter 2006.

According to the company, it expects to report that its revenues for the quarter will more than double to approximately $27 million. The company cited that it is experiencing continued strength across all its major product lines.

The company also expects that its earnings per share will grow some 38% over the comparable quarter of the previous year.

For a stock trading at its current reasonable valuation, I think this expected growth makes for attractive investment opportunity. I do believe that AOB is under-followed by the investment community at this time.

The one thing you can expect from U.S.-listed China stocks is significant volatility in stock prices. Even though the economy in China is booming, it is still a bit like the Wild West. Just about anything can happen. With this in mind, however, if you can stomach the risk and the volatility, there’s no better place for risk- capital monies right now.

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Profit Confidential AuthorMitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.

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