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MOTHER NATURE SAYS BUY THIS STOCK NOW!

Raw materials are the carbohydrates of our economy. Every country is dependent on commodities like coal, iron, steel, and agricultural products like wheat, corn, and soybeans.

These materials are not just for expansion and growth… but vital for economic survival.

Consider these stats…

China is using about 131 million tons of coal a year. World demand for steel is 1.24 billion metric tons. Iron ore production is around 2,240 million metric tons. And the U.S. production of wheat is estimated to be 2,106 million bushels.

What’s common amongst these numbers? MORE >>>

One Company Cornering A $2.3 Billion Market!

Right now, it’s easier to land a man on the moon than to cure cancer.

In many respects getting to the moon was easy.  There are lots of things leading medical experts still don’t understand about the human body.  It’s one reason the medical research industry is such a robust market.

The other reason… the numbers.

According to the American Cancer Association, 569,490 people in the United States died because of Cancer in 2010.

They estimate there are around 1.53 million new cases of cancer every year.

Cancer has touched everyone’s life in one way or another.  Maybe you’ve had a close family member die of cancer… or a friend diagnosed with the horrible disease.

You may have sidestepped the big “C” however you probably know someone doing battle right now.

Remember, the 1.53 million unlucky souls diagnosed last year are people.  They need our love and support.  And most importantly, they need treatment.  Bottom line, cancer is put into remission by pricey hardware, expensive surgical treatments, and powerful drugs.

Companies bringing powerful treatment to the frontlines of this disease are poised to reap not only huge financial rewards, but emotional rewards too!

Just take a look at BSD Medical (BSDM).

BSD MEDICAL’S BUSINESS

BSD Medical makes its money off some pretty advanced cancer fighting medical equipment.

They specialize in Hyperthermia therapy devices.  Hyperthermia therapy entails superheating cancer cells with radiofrequency and microwave energy to damage or destroy them.  Weakened tumor cells might suffer apoptosis, which is a certain type of cell death.  If the cancer cells don’t die they at least become more susceptible to traditional treatments.

Right now BSDM produces superficial, deep, and internal hyperthermia therapy devices.

The various devices all target cancer cells in different ways.  For example, superficial hyperthermia is noninvasive and used for tumors within centimeters of the skin’s surface.  This is effective for treating cancers like melanoma and breast cancer.

Other products like the internal/intestinal device are used inside the body.  An antenna is threaded into various parts of the body to deliver hyperthermic microwave energy.  This technology can be used on prostate cancer, breast cancer, and head and neck cancer.

The company is working on even more powerful versions of these devices.

WHY BSDM? WHY NOW?

BSDM received FDA clearance to market the MicroThermX in August 2010.  They also received clearance from EU regulators to market the new product line in Europe.  This is a huge milestone as management estimates the potential world market for ablation devices to be around $2.3 billion.

With FDA clearance comes an ability to sell their equipment.

In early May 2011 the company announced a distribution agreement with CoMedical who specializes in selling noninvasive or minimally invasive medical equipment. BSDM’s hyperthermia ablation device is right up their alley.

The latest news indicates the company has since signed up two additional distributors.  The company is continuing to work on additional distribution networks for the US, Europe, and other international markets.

BSD MEDICAL’S FINANCIALS

Just a few weeks back the company announced second quarter results.  Now, keep in mind for whatever reason the company doesn’t use a traditional year-end… their second quarter ended in February 28, 2011.

And their third quarter numbers should be released in a few weeks.

The key to understanding their financials is that the business is still in development.  Remember the ink is still drying on the new distribution deals.  BSDM won’t magically see a huge influx of revenue overnight.

Keep an eye on their revenue over the next couple of quarters.

The key at this point is the balance sheet…the sales revenue will come in time.  For now, we want to focus on cash and debt levels.  And I like what I see.

The company reported just under $20 million in cash and no debt.

The company lost just over $1.5 million last quarter and at that rate, they’ll be in business for over 3 years before running out of money.  But I don’t think that will be a problem.  Once the company starts seeing sales from their distribution network, the losses should dwindle.

BSDM VALUATION

Right now you can’t really slap traditional valuation measurements on the company.  Without significant revenue or earnings, the normal valuation ratios don’t apply.

In this case we have to look at the value of the company and the value of the market they are approaching.  Remember, the company is selling a newly FDA approved device into a $2.3 billion market.

In the next few years you could estimate the company grabs a small slice of this industry… maybe 5%…

Five percent of a $2.3 billion market would generate over $115 million in annual sales.  Not bad…

Now consider this…

When looking at the entire medical device industry, the average Price to Sales ratio (or P/S) is just over 4.7x… and the Median is just over 2.0x.  A little back of the envelope math gives us a valuation range of $540 million to $230 million.

Granted right now these are just estimates… but at a $540 million valuation BSDM’s stock would be trading for around $18.51 a share!  At the lower $230 million value the stock would only be trading around $7.87.

Look the stock’s trading for less than $3.00 right now… $2.85 actually.

Even if I’m off by a few million, the stock still has lots of room to move higher.  I could see it easily doubling form here if management is able to get sales rolling.

ANALYSIS OF BSDM’S STOCK

BSDM is trading at a deep discount right now.  The company’s value has been heading lower along with the general downtrend in the market.  I think the selloff is overdone.

Remember, as the sales start to roll in, we’ll see big improvements in the financials… and the stock is sure to jump on the news.

 

 

 

 

 

 

Chart courtesy of StockCharts.com

 

ACTION TO TAKE

If you like what you’ve read, do your own research… then Buy BSDM up to $3.00 a share.

 

 

 

 

Prices as of June 13, 2011
The “Recommended Price” is as of the date and time of the recommendation (adjusted for splits and dividends), you may pay more or less. “Buy-up-to” means don’t pay more than this price for the stock. If you can get it cheaper, then great! “Hold” means hold if you own it, but don’t buy it if you don’t. “Sell” means sell. Remember to consult your investing professional before making any trade or investment. And remember all investments have some risk.

Buy China Stocks Now

What Are You Doing With Chinese Stocks Now?

 

The last few months have been rough for China’s economy.  Businesses are struggling, and China stocks have been poor performers.  But that’s all about to change… I’ll tell you why in a moment.

 

If you hold Chinese stocks, the last few months have used up a lot of your willpower.

 

Stocks in China are taking it on the chin… all because of the economy.

 

Consider this…

 

China is expected to grow around 9% in 2011.  While that kind of growth is fantastic, it creates some problems.  The biggest is the inflation threat to economy.  See, growth is driven by demand… and the demand for commodities and other goods is jumping.

 

Millions of Chinese are reaching the middle class… and that means lots of new consumers with pockets full of money.

 

And these consumers want to buy!

 

As a result, Chinese government officials are having to battle back inflation.  A little growth is good… inflation (too much growth) is bad.  And the communist leaders know inflation causes people to do crazy things – like overthrow governments!

 

So they’re working hard to control inflation.

 

In March, China witnessed consumer prices skyrocket over 5%.  That’s a 5% jump in prices in one month’s time!  That rate is unsustainable.

 

So, in early April, the Chinese Central bank increased interest rates again.  All in an attempt to keep the “Inflation Tiger” caged.

 

The central bank is also using other unique techniques to cool off the economy.  They’ve been asking companies not to increase prices.  They’re forcing banks to pay higher interest rates (to take money out of circulation).  And they’re increasing reserve rates at banks to cool lending.

 

They’re even tightening down on lending standards for real estate.

 

They’re doing anything and everything in their power to keep growth low and slow.

 

As a result, the markets’ haven’t been kind to Chinese stocks.

 

In just the last two months we’ve watched as the Shanghai Composite plummeted by over 11.4%.

 

 

 

 

 

 

 

Chart courtesy of stockcharts.com

 

It’s ugly.

 

I don’t care who you are.  If you’re sitting on Chinese stocks right now, you’re second guessing your investment decision.  Getting hit with more than an 11% loss in just two months is never easy.

 

However, let me encourage you to hold tight to your Chinese stocks… And if you don’t own any right now, consider adding Chinese stocks to your portfolio right now.

 

Why?

 

Remember, the same threat to China’s economy is what’s going to drive stock prices higher.  The central bank may want to slow down growth in their country… but they’re still growing and growing rapidly.

 

It’s estimated around 600 million people in China will reach middle class status in the next decade.  If you think the buying frenzy is crazy now, just wait.

 

Companies who are aggressively expanding in China right now will reap the rewards in a few years.

 

Growth will not only drive prices higher, but sales volumes as well.  And with the recent down draft in the market, company valuations are at ridiculous levels.

 

Consider this…

 

Just today I used a powerful database to screen for Chinese stocks.  Out of the tens of thousands of companies traded in the US markets, the system identified 250 stocks as being based in China.

 

Then I screened the group based on valuation.

 

I started looking at Chinese companies trading at deep discounts to earnings.  My focus was on P/E ratios.  Now, before I go any further, let me remind you the P/E ratio compares the value of a company to their earnings.

 

Here in the United States, the S&P 500 has an average P/E ratio of around 15x.  That means you’ll pay 15 times earnings to buy the average American stock.

 

Of the 250 Chinese stocks in my database 78 are trading at ridiculously low P/E ratios.

 

What’s ridiculously low?

 

Try a P/E of under 5!

 

So more than 31% of all of these Chinese stocks are deeply discounted.  But what’s more amazing…

 

17 of the companies I screened for are trading at P/E ratios below 1.0x.  That’s right, a P/E of one!  In other words, you can buy these companies for about what they drop to the bottom line in earnings.

 

Talk about scooping up deep discount stocks at ridiculous valuations.

 

Now let me warn you, you have to do your diligence.  You can’t run out and buy everything you see.  Take some time, do a little research… and grab a few of your favorites.

 

You many never see Chinese stocks this undervalued again!

Another Opportunity To Make Big Money Following The Footsteps Of The Pros

Every year, millions wait anxiously for the annual report of Berkshire Hathaway.  Why such clamor for a notoriously boring document?  It’s the opportunity for everyday investors to see what famed investing genius Warren Buffett is investing in.

 

That simple document tells you every investment Buffet has made, and it allows thousands to follow in his footsteps.

 

Now, I’m not going to argue with the logic of following other successful investors… I’ve looked at my share of unknown stocks just because a big name investor has been buying it by the truck full.

 

However, allow me to make one simple observation… there’s a lot of successful investors out there.  Buffett isn’t the only one!

 

Take for example the investors Austin Marxe and David Greenhouse.

 

If you don’t eat and breathe investing like I do, you may have never heard of them.  However, these two run one of the most intriguing investment funds around – “Special Situations” is the name… and let me tell you, their success is legendary.

 

At last count they were managing almost $800 million in funds.

 

That’s why I sat up when I learned they owned a significant chunk of a very tiny company… Noble Roman’s Inc. (NROM.OB)

 

They own over 1 million shares, representing over 5% of the company. It’s worthwhile taking notice of the penny stocks major investors are holding onto.  After all, these guys didn’t earn their fortune without making wise investing decisions.

 

When I examined the company, I really liked what I found… there’s a lot more to the story than just a few big named investors!

 

NOBLE ROMAN’S BUSINESS

Noble Roman’s owns a variety of popular restaurant trade names, and sells and services franchises.  Their restaurants include Noble Roman’s Pizza and Noble Roman’s Take-N-Bake Pizza.

 

In addition to its pizza brands, the company also franchises its Grab-N-Go Subs, Tuscano’s Italian Style Subs, and the Noble Roman’s Bistro trade names.  Many of their franchises are located in very non-traditional venues like universities, convenience stores, and even hospitals.

 

Now, the franchises are all built around one overriding ideal… selling high quality food with fast service at affordable prices.  They focus on using fresh ingredients and providing a big menu full of choices.

 

When the business first started, they owned and operated all of their locations… but in the late 1990s, the company shifted focus.  Today, Noble Roman’s operates only two locations for demonstration purposes.  As a result, the bulk of revenue comes from franchising and licensing fees.

 

I’ll tell you more about their numbers in a moment…

 

The franchise business has been good to the company.  Noble Roman’s boasts locations in Italy and Canada in addition to its locations in 45 states and Washington D.C.

 

The company has over 1,112 locations, and 314 were added in 2010 alone!

 

Clearly the company has been growing in difficult economic times.  And their growth is poised to climb even higher as consumers spend more money eating out in 2011 and 2012.

 

Another appealing aspect of this company is its product diversification.  In addition to its traditional franchises, Noble Roman’s also offers licensing for the Take-N-Bake Pizza trade name.

 

The Take-N-Bake Pizza products serve as add-ons for existing convenience store franchises.  However, Noble Roman made it a stand-alone offering for grocery stores as well.  The company has already signed 635 grocery stores to participate in the program!

 

Now, let’s take a closer look at the business outlook.

 

As everyone knows, the restaurant industry suffered following the 2009 recession.  Since then, the outlook has brightened considerably.

 

According to experts, the entire restaurant industry is positioned to see substantial sales improvements in the next few years.  And we’re already seeing consumer discretionary spending rebound.

 

It all means higher sales for Noble Roman’s… and greater returns for investors.

 

Clearly Noble Roman’s industry and the company are poised to see substantial growth in the coming quarters.  Now’s the perfect time to step in and buy this company stock while it’s cheap!

 

Before we get ahead of ourselves, let’s take a closer look at the numbers.

 

NOBLE ROMAN’S FINANCIALS

The key to Noble Roman’s strong financial performance is due to the business model.  They generate most of their revenue from high margin franchising and licensing fees.

 

The company’s revenues remained strong in 2010, despite a drop in same store sales in the first part of the year. Total revenues were $7.3 million in 2010, which was down slightly from $7.5 million in 2009.

 

Remember, their business model means low overhead and operating expenses.

 

Just look at the company’s margins.  As of the most recent quarter, they’re showing operating margins of over 40.4%.  These margins are huge compared to the restaurant industry as a whole, which is lucky to see operating margins over 10%.

 

Now the company stock has suffered because of a fall off in net income.  The loss was due to an accounting charge on discontinued operations in 2010.  The future is looking bright however.

 

For the first quarter of 2011, the company announced revenue climbing, operating income moving higher and net income climbing as well.  As a matter of fact, the company is on track to generate close to $1.4 million in net income this year.

 

NROM VALUATION

At first glance, Noble Roman’s stock looks a bit overvalued.  They have a trailing P/E of 63x!  A ridiculous number for a restaurant.

 

But this high valuation is because of the accounting write-down.  If you look at their most recent quarter… and assume they do about the same for the following few quarters… NROM should generate close to $1.4 million in net income.

 

Based on that number, their P/E becomes a much more attractive 13x.  As a matter of fact, the company is trading at a valuation about 7% below the S&P 500.

 

But that’s not all.

 

With the rebound in consumer spending… the bright outlook for the restaurant industry… and the company’s huge leverage and stellar financial performance, I could see Noble Roman’s performing even better in future quarters.

 

And that tells me the company is very undervalued!

 

ANALYSIS OF NROM’S STOCK

NROM is trading at bargain basement prices right now.  The stock trades at $1.01 per share.  As you can see from the chart, this is a stock you should buy on the dips.

 

Remember, as the business improves, and the company continues to drive bigger profits, the stock is sure to skyrocket.

 

 

 

 

 

 

 

Chart courtesy of StockCharts.com

 

ACTION TO TAKE

If you like what you’ve read, do your own research… then Buy NROM.OB up to $1.20 a share.

 

 

_____________________

Prices as of May 27, 2011
The “Recommended Price” is as of the date and time of the recommendation (adjusted for splits and dividends), you may pay more or less. “Buy-up-to” means don’t pay more than this price for the stock. If you can get it cheaper, then great! “Hold” means hold if you own it, but don’t buy it if you don’t. “Sell” means sell. Remember to consult your investing professional before making any trade or investment. And remember all investments have some risk.

 

 

 

The Buying Opportunity Of A Lifetime

Every few years, the markets hand you a gift.  At the time, it looks like a mud pie… many investors shun the gift.  They throw it away.  Only to realize months and years later just how great the gift was.

What gift am I talking about?

The gift of a market correction.

Now many of you are looking at me a little cross-eyed right now.  I can see what you’re thinking… Since when is a market correction a gift?

You’re right to question me… but what I’m going to do is challenge you to think outside the box.  Try not to think of a market correction as a bad thing.  Instead of dwelling on the current value of your portfolio, shift your view.

Look at a market correction like a discount sale at your favorite store.   When the stock market experiences a correction, it’s a gift.  It’s an opportunity to buy some of the best run companies in the world at prices you’d only dreamed of!

There have been numerous “gifts” given to investors over the years.  Smart ones stepped up and took advantage.  They bought hand over fist… making millions in the process.

Remember, a market correction is a very natural phenomenon.

They happen all the time.  Some are caused by market specific bubbles, others are caused by manmade acts, and still others are caused by Mother Nature.  Any way you slice it, a market correction is a natural part of the investing cycle.

Right now, one overseas market is in the midst of a market correction.  If you play your cards right, the rewards could be phenomenal.  I’ll tell you more about it in a moment.  But first let’s take a quick look at some past market corrections.

By studying the past, you’ll be able to recognize them yourself in the future.

For example, look at one of the greatest market corrections of all time… the Great Depression.

For many, this time in American history needs no introduction.  We had just seen the roaring ‘20s, the invention of mass production, the end of World War I, and the widespread sale of the automobile.  Optimism was high.

But the market got too hot, too fast.

And in October of 1929 the market came apart.  The stock market faced a serious and prolonged correction… over 80% of the value was lost.  And the entire US economy suffered.

Now there’s a lesson to learn here…

In the worst market correction in US history, some very smart investors turned their tiny piles of money into millions… and hundreds of millions!

Take for example Floyd Odlum.  He started investing with $39,000 during the great depression and turned it into $100 million!  Howard Hughes founded Hughes Aircraft in 1932… making him a millionaire.  And J. Paul Getty used the depression to buy up oil companies… and we all know how well he did!

My favorite example however is Sir John Templeton.

In 1939 the market was still in a depressed state.  He borrowed $10,000 from a boss and proceeded to buy every stock on the New York Stock Exchange trading for less than a $1.  Within 4 years, he was rich!

Investing during a market correction – if done in the right ways – can turn humble amounts of money into mountains of cash.

So let’s look at another correction.

There seems to be a big correction every few decades… but while some are caused by market bubbles like the Great Depression, others are caused by man.  Just look at the market during the bombing of Pearl Harbor.

Back in December of 1941, the Japanese attacked Hawaii, and the markets plunged.  It wasn’t a good time in America… or the markets.  But not only did the markets snap back within a few years, they thrived.

We witnessed it again in the summer of 1990, during the Persian Gulf War.

Just look at the chart…

Chart courtesy of StockCharts.com

The market was flying high during the summer of 1990, only to be knocked down by news of Iraq invading Kuwait.  Within 3 months, the market had fallen almost 20%.  It was ugly… but it was a gift to investors.  The market subsequently rebounded and just over half a year later was trading at pre-war levels.

There are hundreds of examples out there… And I see one shaping up right now.

Just look across the Pacific to the country of Japan.

A few weeks ago the country was rocked by a massive 9.0 earthquake.  As if that wasn’t enough, they were hit by a massive tsunami.  Villages and entire towns were destroyed.  The impact of these natural disasters will be felt for years if not decades…  My heart goes out to all those who are suffering.

But the real impact…. The real challenge to the people of Japan was manmade.  A group of nuclear reactors are in dire straits.  They were hammered by the earthquake and the tsunami and badly damaged.

How much radioactive dust, water, and pollutants are they spewing out?  It’s anybody’s guess.

The entire situation is scary and not one to give investors much comfort.  It’s still touch and go at the plants … the worst might happen… a total melt down is still possible.

But here’s the deal.  As an investor you know this is a horrific accident.  It is scaring the living daylights out of people.  Everyone is selling.  Many stock accounts are being sold down and the Japanese market is taking it on the chin.

Could it continue to fall?  Of course.

Could Japan see further destruction and more fallout from the nuclear accident?  Sure.

Could the situation get much worse… before it gets better?  You bet it can.

But the time to strike is when everyone is still fearful.  Is Japan going to disappear?  No, of course not.  Will they eventually recover? Of course they will.  Here’s the key – if you buy into this volatility now… when the outcome is less certain… you have the potential to turn a tiny investment into millions!

As the Baron Rothschild famously said, “The time to buy is when there’s blood in the streets!

Now a word of warning… don’t just run out and put your life savings into the first Japanese stock you find.  You need to have a strategy.

Look for Japanese companies who are leaders in their industry.  Focus on the biggest and best.  As the markets recover they will probably be some of the first to rebound.

If you don’t want to take the time to research individual stocks, consider picking up a Japanese specific ETF.  They often own baskets of Japanese stocks, and depending on which one you pick, the returns could be off the charts.

How To Win With A FULL HOUSE Every Time

$30 Billion Dollars… How’d you like to grab your share of that pie?

In 2005 the American Gaming Association announced revenue from US gaming (their polite word for gambling) activity surpassed $30 billion annually!

And it’s not just casinos throwing big money around.  State lotteries, horse racing, and charitable gaming all add to the dollars flowing into the industry.  Big money can be made in this industry… and that’s why for the longest time mobster’s have played a role.

In 1947 mobster Bugsy Siegel opened the Flamingo Hotel in downtown Las Vegas… forever cementing the relationship between the mob and casinos.

Now, almost 60 years later, many of the casinos in Las Vegas are owned and operated by corporations.  It was inevitable.  The small casino operation has morphed into a mega resort.  It’s a model with huge hotels, giant banquet rooms, massive convention centers, and tons of non-gaming entertainment.

The money it takes to get new facilities up and running is mindboggling.  And now, casinos are a vital part of the business and vacation travel markets!

The fact that they spit out more cash than a broken ATM is just another benefit to their owners.  If you want to grab your share of this lucrative industry, now’s the perfect time to invest in a successful casino operator…

But which one’s the best?

Allow me to introduce a small but rapidly growing industry participant…

COMPANY DESCRIPTION

Full House Resorts (FLL), is a rapidly growing casino owner and operator.  They own the Stockman’s Casino in Fallon, Nevada.  And they recently purchased the Grand Victoria Casino in Rising Sun, Indiana.

But that’s not all…

Management’s also struck a few agreements to run other casinos.  These are fantastic agreements, giving Full House a fixed fee for running operations.  Recent contracts were signed with the FireKeepers Casino in Battle Creek, Michigan, and the Harrington Raceway & Casino in Harrington, Delaware.

Now, Full House doesn’t just show up and run the casinos… they assist with everything from soup to nuts.  They often assist with regulatory approval, development of the property, architecture design, construction management, and even financial planning.

This experience has paved the way for future growth and expansion.  Two areas warrant special attention… and I’ll get to those next.

BUSINESS OVERVIEW

Management has a two pronged expansion strategy.

First, they began the process of acquiring successful, established casinos.  But they didn’t just rush out and buy anything on the market.  They are focused on buying casinos that immediately added to their bottom line.

Full House also has a unique demographic strategy.  They focus on areas where there’s a steady demand for gaming and relatively few competitors.

This practically guarantees a nice, even stream of revenue.

Given the recent market downturn, opportunities are now more plentiful than ever!

Second, Full House made a conscious decision to partner in the Native American Casino market.  They offer their casino management experience to these clients… and get to charge some heavy fees.

For example, through a subsidiary called Gaming Entertainment Delaware the company runs the Harrington property in Delaware.  This property is nicknamed a Racino.  Now, a Racino is a unique type of casino, it combines the casino experience with the racetrack.

They’re relatively rare and new.  And Racino’s are only legal in 9 US states right now.

As Full House acquires new casinos, or expands their management of others, their top line is sure to grow… and that eventually leads to bigger profits for shareholders.

Speaking of profits, let’s take a look at their financial statements.

FULL HOUSE’S FINANCIALS

Just a week ago, we got the financial numbers for Full House… and let me just say they were fantastic!

In 2010 Full House revenues skyrocketed!

In 2009 FLL reported a mere $19 million in revenue… by 2010 their revenue grew to over $32 million!  All of this growth is due to management’s focus on the casino management side of the business.  The best part is, the contracts allow for annual increases… so we know the revenue number is only heading higher!

Just imagine how revenues will grow as the economy recovers…

As a result of stronger revenue, the company reported a net income of $7.6 million in 2010.  This is a huge step up from the $4.7 million they reported in 2009.  That’s a 60% jump in net income in one year!

As a result of the strong earnings, the company reported EPS of $0.43, a 65% increase from 2009.

What’s more, the balance sheet is clean and strong!

Full house has more than $13 million cash on the books and no debt.  It’s the perfect combination for big growth and further corporate development.

Needless to say, the company is reporting some amazing financial results… but do you have to pay through the nose to buy this high flyer?

VALUATION

As I write this, FLL stock is trading for $3.68 a share.  And in my opinion, it’s a screaming deal.

First, let’s look at earnings.

Right now, Full House is trading for a P/E of only 9.8x.  Not bad.  But when you compare it to the rest of the industry you make an interesting discovery… The Resort and Casino industry as a whole trades closer to a P/E of 29x.

That means the Full House stock would have to almost triple in value just to reach parity with the rest of the industry!

But that’s not all…

Their growth is off the hook. Some analysts are expecting even bigger growth from the company over the next few years.  Right now, five year estimates are calling for a 30% growth rate for the company… this blows away the 14% growth rate the industry is expected to experience.

Any way you slice it, this stock is heading higher.

 

 

 

Chart courtesy of StockCharts.com

Now, I’m not the only one who thinks the stock is undervalued.  One of the larger shareholders is Austin Marxe.  If you’re wondering who he is, just crack open the list of the Forbes 400.

He’s the President of AWM Investment Company… and they’re considered by many to be the “Smart Money!”

Anyway, Mr. Marxe owns an astonishing 10% of the company!  I call that a real vote of confidence.

Full House is a unique company, poised to profit from a rebound in the casino industry.  Management has made a concerted effort to grow the business not only through acquisition, but by also by signing key casino management contracts.

On what is arguably one of the most difficult economic times, the company has posted amazing revenue growth of 68%, and grown net income by 60%.

And right now, the stock can be bought up for cheap.  It’s trading at close to 30% of the industry averages, despite having some of the biggest growth rate expectations.  I could see this stock double or more in the coming months!

ACTION TO TAKE

If you like what you’ve read, do your own research… then Buy FLL up to $3.99 a share.

 

Prices as of March 14, 2011
The “Recommended Price” is as of the date and time recommendation (adjusted for splits and dividends), you may pay more or less.  “Buy -up -to” means don’ t pay more than this price for the stock. If you can get it cheaper, then great!  “Hold” means hold if own it, but don’t buy it if you don’t. “Sell” means sell.  Remember to consult your investing professional before making any trade or investment.  And remember all investments have some risk.

Warren Buffett Loves…

Wouldn’t you love to be a big league investor… even just for a day!?!  If you’re reading this, you’re probably not managing billions of dollars, or running leveraged buyouts… but with a little secret I’m going to share, you can access the same information these investing titans use.

More on that in a moment…

First, consider how fun it would be to act like a billionaire investor… You’d get phone calls from Goldman Sachs offering up sweetheart deals.  You’d rub elbows with other rich and famous investors, and enjoy the finer trappings of life.

Of course you’d have to work… if you could call it that.

You’d fly first class all over the world visiting your investments.  Your “corporate partners” as you’d call them would wine and dine you.  Only the best hotels… restaurants… meals… wine… cigars…

You’d have your own private jet… no waiting in line for a TSA patdown.

The moment you land a chauffeur would pull up next to the plane.  No waiting for the 300 people in front of you to de-plane.  Your black limo would be standing by to whisk you off at an instant to your next destination.

Everyone would watch your every move.  And fellow investors would beg for a hot stock tip!

Wouldn’t it be nice!?!

Well, in the real world not everyone can be a superstar investor.  All of the traveling could wreck your home life… and the jet lag is a drag – trust me.  The fancy meals often come with an upset stomach… and a constant battle losing 5 or 10 pounds!

And the private jet and limo… just wait till you have a losing quarter – your investors will want to string up your hide for misappropriating investment funds!

Look, not everyone can make billions.  Not everyone can move markets with their comments.

However, you can look over the shoulder of the greatest investors of all time.  You can see almost trade for trade what they’re investing in.  You can sit in on those smoke-filled back rooms where the big deals are cut and see exactly what they’re investing in.  (Without inhaling all of that cigar smoke!)

It’s easy to do.  And it’s FREE!

So while you may not be able to get the ear of investing greats like Bill Gates, Warren Buffett, or T. Boone Pickens you’ll know what they’re doing.  You’ll be able to see what they’re buying, what they’re selling… and if you read between the lines you may be able to figure out what they’re thinking!

How is this possible?

Let me share a secret with you.  And to be honest, we have the Federal Government to thank for this inside look at the big boys of the investing world.

See back in the 1930s and 1940s, after the great depression, the government was looking for a way to level the playing field.  They were sick of the little guy always getting crushed.  One of the big problems back then was big investors secretly taking big positions in certain companies.

When an industry tycoon decided to buy up a local railroad, all he had to do was start buying the stock.  Nothing illegal, mind you, but once others figured out what he was doing, they’d start buying too.  A stock could shoot the moon overnight.

But here’s where it gets tricky… that same industrial titan could then start dumping his stock and not tell anyone.  He’d laugh all the way to the bank as the small guy who bought alongside of him watched the price plummet.

And it worked the other way too.

If some big industry tycoon decided to unload a big stake in a company – even his OWN company – he could do so easily.  There were no restrictions.

You can see how this would cause problems… and if left unchecked, it compromised the very stability of the markets.  So, congress took action… and the rules changed.

If you are a big player in the market, you have to disclose your holdings.  You have to make your filings public.  It’s a law from Section 12 of the Securities Exchange Act of 1934… and it calls for the filing of a form SC 13-D.  It sounds complicated, but it’s really simple.

Whenever anyone… and I mean anyone… acquires more than 5% of the stock in a company they must file a “13-D”.

Now, not only do these “Big Investors” need to tell people when they take a big position (more than 5%) but they also have to make another filing if their position changes materially!  So if they want to keep buying… or start selling… they have to tell everyone!

But wait – there’s MORE!

It gets even better.  These big league investors don’t just need to tell you when they buy 5% or more of a company… every quarter they need to tell you what they hold.  This is the famous “13-F” filing.

Here are the specifics – anyone managing more than $100 million must file a 13-F within 45 days of the end of the quarter.  They need to list not only the name of the company, but the number of shares they hold, and the total market value.

It’s like playing poker with the other guy playing his cards face-up!

If you want to see what Warren Buffett is buying… take a look at the 13-F for Berkshire Hathaway.

Want to know what Bill Gates is holding?  Look at the 13-F for Cascade Investment LLC… that’s Bill’s private investment vehicle.

To see what T. Boone Pickens is buying… you got it.  Just look at the 13-F filings by his investment company BP Capital Management.

These documents are a wealth of knowledge.  You can see what’s new… what the investors are buying more of… even what they are selling.  Now it will take a bit of detective work… but you can also figure out just how much of their investment portfolio is in each security.

Imagine the power you have at your fingertips knowing when investment greats are getting into… or out of… a particular industry.  And if they really like a company… and own more than 5% you’ll be able to see that too in the 13-D filings.

You can uncover all of this information yourself by going to the sec.gov website and doing a search by investor name, investment Company, or even by the stock.

I recommend every investor look at the holdings of these big players before ever making an investment.  You never know – you may just find out that the very stock you’re considering buying is loved by Warren Buffett!

Trading the 50-Day Moving Average

So, you want to be a better trader or a better investor. You’re tired of buying a stock only to see it head lower right after you pull the trigger.

You’re sick of selling a stock and they watching it jump significantly higher after you’ve sold.

You’re simply waving goodbye to your hard earned cash!

What you’re experiencing is nothing new.

For as long as the financial markets have been in existence… heck, as long as humans have been trading and bartering, this has been a problem.

There is a simple solution.

It’s called the 50-day moving average. I like to call it the “Money Magnet”.

First what is the 50-day moving average (Money Magnet)?

The 50-day moving average is simply the average price of a stock over the prior 50 days. To calculate it, you add the most recent closing price to the 49 prior days and divide by 50.

There are charting packages and software to do it all for you so don’t stress about it being complicated.

The Money Magnet gives you in a simple look what the overall trend is. Keep in mind 50 trading days is 10 weeks… or almost 3 months.

So it’s easy to see if the stock is trending higher or lower.

Also, since the Money Magnet is an average, big one day swings don’t move it much. So it tends to be a more calming way to look at a stock.

So how can you use it?

Let me give you a real world example…

Take a quick look at this chart of Alcoa (AA). Alcoa, as you probably already know is a Dow Jones Industrial Average Component and one of the world’s largest producers of aluminum.

Chart courtesy of StockCharts.com


Many investors look at the money magnet as a key indicator of when to get into… or out of… a stock.

In its simplest form, if the 50-day moving average is trending lower and the stock moves below the 50-day line, many investors will sell.

You can see that clearly in May on the stock chart. The stock was below the Money Magnet line… and the trend was down!

Now in September, everything changed. You’ll notice the money magnet line started moving higher… and the stock started trading above this point.

It’s a huge buy signal for many investors out there.

And in the case of Alcoa, the money magnet worked like a charm. By following this simple entry and exit strategy, you could have sidestepped a more than 30% loss in AA starting in May.

Then you could have jumped back in for a 55% gain starting in September.

Whenever I’m looking at a stock to buy… or monitoring one I already own, I always look at the Money Magnet line.

It’s an easy way to see trends. And in the blink of an eye you can see if a stock is overbought… or oversold.

And some investors even use it as a signal for entering and exiting investments.

The Money Magnet is an investing tool everyone should know how to use… and apply on a regular basis.