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Welcome to Profit Confidential • Tuesday, May 22, 2012

Special Situation Stock Poised for Great Success

Thursday, May 15th, 2008
By Mitchell Clark, B.Comm. for Profit Confidential

In early February of this year, I wrote in this column about an exciting micro-cap company called Fushi International Incorporated (NASDAQ/FSIN).

Fushi International recently changed its name to Fushi Copperweld, Inc. to better reflect its acquisition of Copperweld Bimetallics in Fayetteville, Tennessee. The company’s stock symbol stayed the same.

Operating through its wholly owned subsidiary Fushi International (Dalian), this company manufactures bimetallic composite wire products. The company’s core product is copper-clad aluminum wires that combine the conductivity and corrosion resistance of copper with the light weight of aluminum. According to Fushi, its copper-clad aluminum wires are a cost-effective substitute for single copper wire, and can be used in a variety of applications These include coaxial cable for cable television (CATV), signal transmission lines for telecommunication networks, distribution lines for electricity, electrical transformers, and wire components for electronic instruments and devices. The company is based in Dalian, Liaoning, China.

Fushi Copperweld recently reported excellent first quarter numbers and this stock is likely to do well for several years to come.

According to the company, its 2008 first quarter revenues grew 155% to fifty-four million dollars, up from the just over twenty-one million dollars generated in the comparable quarter last year. Organic revenue growth represented about 70% of total revenues, while the rest was due to the Copperweld Bimetallics acquisition in Tennessee.

Net income in the first quarter grew an impressive 52% to $7.6 million, or $0.26 per diluted share, up from net income of $5.0 million, or $0.21 per diluted share.

Fushi anticipates a little slowing of earnings later this year, because of the integration costs associated with its recent acquisition. Company management cited that it expects a great year in 2009 as a result.

Despite its volatility on the stock market, this stock is still undervalued considering its growth prospects. Fushi Copperweld is one of those unique types of businesses that can only be described as a special situation. I think this company will become a great success over the next several years.

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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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