“Don’t Miss This Energy Profit Play” (Ian Wyatt)

By Travis Johnson, Stock Gumshoe, January 29, 2010

Today, for your Friday File pleasure, we roll out the Gumshoe carpet (we can make it a red one, if you like) for a recent tease from Ian Wyatt (again) for his SmallCapInvestor Pro newsletter — and this time, it’s about electricity. It’s also a tiny stock, so again, an appropriate one to look at with our much smaller Irregulars audience — I always feel bad when one of the microcaps I mention over on the main site gets a big bump as a result of that attention.

Wyatt is teasing a stock that manufactures a particular kind of efficient electric transformer, in China, but of course in his words it comes off quite a bit sexier than that:

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“Don’t Miss This Energy Profit Play

“China Power Demand Could Bring Investors +50% Gains…

“It’s called a transformer. It converts electricity from hi-voltage power lines to the lower voltage that works in homes and businesses. The transformers you see on telephone poles usually have a silicon steel core.

“But I’ve found a small $4 company that makes an amorphous alloy core transformer. Made of 3,150 layers of metal, it’s 77% more efficient than silicon steel core transformers. (Actual product photo from the factory floor at right.)”

Jeez … 50% gains? Is that all? I know, 50% is nothing to sneeze at, but from the promises we all see so often from these folks, a mere 50% gain sounds a bit tepid. Or refreshingly honest, if you prefer.

So what is this stock? Let’s look quickly at a few more of Wyatt’s tasty tidbits, and I’m sure we’ll find our answer:

“China has made it a law that companies must give priority to energy-saving transformers, like these amorphous alloy core transformers. This company I’m telling you about is already seeing a massive surge in revenues and earnings…

“Between 2008 and 2009, revenue grew 142% and earnings grew 175%. And in the most recent quarter, revenue growth was 250% and earnings growth was an astounding 516%! Clearly, this innovative little company is picking up steam. And it could make you a bundle in the process…

“Demand for this company’s amorphous alloy core transformers is so strong, it’s increasing its manufacturing capacity by 200% in 2010.

“And did I mention this company’s amorphous alloy core process is patented? That means it truly is in the catbird’s as China ...

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