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I'll be heading to Washington, D.C., today for the Money Show, where I'll be meeting with many of the advisors who have participated in choosing stocks for my portfolio, and I will come back with updates from them and decisions on whether to hold or sell. I also expect to come back from D.C. with some fresh ideas for my cash.
Meanwhile, I want to add one position to my portfolio, with the strong caveat that this is a highly volatile high-risk selection that can easily move 5% or more in a day. My portfolio has little exposure to small caps or speculations and no exposure to China, and this one will give us a small-cap, speculative China play in one holding.
The company is Bodisen Biotech (BBC, news, msgs), which is slightly misleading as it really has nothing to do with biotechnology. Rather, the company sells organic fertilizer in China. With some 900 million farmers in China and a total fertilizer market in China estimated at $17 billion, this strikes me as an intriguing opportunity.
The idea for this stock originally came from Ian Wyatt, editor of The Growth Report and SuperNova Stocks, and a specialist in uncovering smaller, undiscovered growth stocks that do not yet appear in the financial press, among other newsletters, or on Wall Street's radar screens.
Says Wyatt, "Bodisen, based in China's agricultural hub, produces environmentally-friendly fertilizers designed to increase crop yields and decrease China's dependency on imports, as mandated by the government.
"Chinese officials are actively pushing for the farming sector to implement organic methods that will increase production and decrease soil toxicity. We believe the company's financial results and the possibility of stellar growth offers investors a rare opportunity at an outstanding valuation. Its growth potential appears immense."
And while the stock price has not yet reflected the company's positive news, the developments in recent months appear very favorable. In its last quarter, income rose 181% on a revenue gain of 124%. The company also recently reaffirmed "record guidance" for the soon-to-be released quarterly numbers.
In addition, to date the firm has been the leading player in western China and recently announced its first venture into the northern province of Xinjiang, the largest agricultural province in China. The shares were also recently added to the Russell Microcap Index.
Meanwhile, the stock is down from a high in February of nearly $22 a share.
I'd add that with a float of under 11 million shares, there are nearly a million shares sold short. However, a second consecutive quarter of triple-digit growth in earnings and revenues may very well be the catalyst to force shorts to cover.
Although this probably goes far beyond what is needed for fair disclosure, I would note that I often suggest stocks to friends, family and associates and some bought these shares in recent months on my advice, at prices both above and below current levels. Meanwhile, with my portfolio currently very heavily focused on portfolio hedges and more defensive larger cap stocks, I clearly have some room for a few high-risk speculations with the potential for significant upside gains. For those willing to incur high risk in exchange for high potential reward, add Bodisen Biotech to your list.
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