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:
“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 spends billions to upgrade its ...