Friday File: Cabot’s #1 China Pick, Altius, and more…

Plus my latest Thoughts on some of our Royalty Companies, and another small buy

By Travis Johnson, Stock Gumshoe, March 21, 2014

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I bought a few more shares of Altius Minerals today, after looking into them and Sandstorm Gold following some recent reader questions, and I’ll get to that in a moment … but first, I thought I’d toss out a quick Friday File teaser solution for you if you’re curious about what’s being teased in China right now.

Paul Goodwin edits the Cabot China and Emerging Markets report, which is really the only surviving China-focused newsletter I can think of from a big publisher (most publishers had such a letter during the China bull run in the mid-late 2000s, but many of them disappeared in recent years as China got to be as much a “fear” topic as a “greed” one). He’s been teasing his No. 1 China Pick over the last week or so, here’s how he describes it:

“Just like my top auto, entertainment, Internet, and social networking picks that doubled our readers’ money four times in 2013, my No. 1 China stock now matches the same profit profile.

“Here’s why:

The stock is a fast-rising star in a global $204 billion industry. It’s a new stock that’s already up 98% in three months. It registered 198% earnings growth for its first quarter. Analysts expect it to register another 203% next year, clobbering the S&P 500 by more than $20 to $1.

“What I like most about this company is that:

It doesn’t have a single U.S. competitor and never will, China only licenses two companies to profit in this fast-growing sector, and It’s outperforming its No. 1 competitor nearly 100 to 1.”

So who is it? One more bit of clues:

“My No. 1 recommendation is one of only two companies authorized by the Ministry of Finance to provide online lottery and sports gaming to the nation’s 3 billion people.

“Talk about a wide moat!

“When you consider that it’s outperforming its No. 1 competitor by nearly 100 to 1, you can see why we are placing our bet here and why I want you in on the action.”

OK, so we’re going to ignore the fact that they goofed on the population — China doesn’t have anywhere near 3 billion people, thankfully, but the 1.3 billion or so they do have is a plenty big market for pretty much anything.

So what’s the company?

This is (WBAI), which did have ...

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