American Oriental Bioengineering (AOB)

[rwins42943]

Stumbled upon this company. Although we don't have exactly 10 years of data AOB is certainly looking like a Rule #1 candidate at $11/share. Not sure about others but I am looking for stocks at a lower price point to increase the number of shares and maximize gains. Has anyone else looked at this company??

[Hobbes]

I don't know a thing about this business but the numbers over the last 6 years look good...good ROE and ROIC...growth across the board. At their current P/E (which is awefully close to the industry average) I get an MOS of $20.87 and it currently trading just above $11. It looks like it has gone through a P/E expansion recently which makes sense since EPS grew at 50% last year and it had a P/E around 13...but even if you pull the P/E back to about 1/2 the growth rate you get an MOS of about $13.71. Initial Rate of Return is a little light at 4.1% but that's the only thing that jumps out at me right now...

[SeanieT]

What do they do that other companies don't do? How is the Management? ANy Inside trading going on? Just a few 4 M questions.

[docdestructo62]

Here are my numbers. I don't know anything about management. The last two insider trades were in March and were purchases.

[npg]

This one is an interesting find. The business definitively strikes a cord with something I believe could be a great future trend in western countries.

No quibble with the numbers either. Nice and consistent.

Now to the smelly bits...

Debt? Why that sudden jump? I would need that answered before comitting $$$.

31% growth over a 10 year period? Unsustainable. I would settle for half of that and still call it optimistic.

Only 6 years of data do not show how well the company will fare during market downturns. It also makes it tougher to predict.

Verdict:
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It's a high risk growth play. I don't believe that the company is discounted much because the valuation suggests many analysts believe that current growth rates are unsustainable in the long term. However, the low P/E suggests that this company is not on the radar of many institutional investors yet. If the growth play works and is able to sustain itself over a longer period of time, then a P/E of 24 is justifiable. If not, expect the stock to halve in value.

I would definitively look into this company. I believe the risk/reward ratio is favorable but does not warrant a substantial bet (yet).

[ggabri07]

Hello, everyone. What do you think about AOB? From what i have been reading they seem to have been doing pretty well. But i am not sure if it is a Rule #1 possiblity. Please shed some light

[npg]

You would do yourself a big favour stating why you like this one. What are the main reasons that make you belive this security is an attractive investment?

It is best not to look at the financials at this stage ;)

[mikeyusf]

I'm applying everything I've learned, and I keep coming back to AOB

sales are increasing steadily, ROIC > 20% for 5 years, net profit margin looks good

Give me your perspective on it

[FiatSlug]

Originally Posted by mikeyusf

I'm applying everything I've learned, and I keep coming back to AOB

sales are increasing steadily, ROIC > 20% for 5 years, net profit margin looks good

Give me your perspective on it

AOB showed up in my list when I was screening for companies. I think they went public in either 2001 or 2002 so the financial data only went back to 2001. I did like 5- and 1-year numbers but eventually decided against this company mainly because the 10-year financial data were not available.

[S.Culver]

To be honest, it scares me a little, but I did buy some for my speculative portfolio as I did CROX and UA. At the very least put it on your watch list and look at it daily