One of weekend penny stock scans pulled up what appears to be an extremely undervalued Chinese advertiser, China Global Media, Inc. (CGLO). The chart itself has been positive for the last few months and all indications have CGLO stock rated as a “strong buy.” Intrigued to look deeper into the numbers, can you believe that the EPS for the nine months ended is just 2 cents lower than the PPS? The guy who’s face is printed on the $100 bill which no one seems to carry around anymore once said “An investment in knowledge pays the best interest.” That said, some knowledge about what’s happening over in Southern China needs to be uncovered.
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CGLO Stock Chart
Market Cap: 7.12M
Close: 0.15, no change
Dollar Volume: $5,424
Average Trade Size: 3,706
Issued and Outstanding: 47,485,700
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For various reasons, there has been little trust for some time now on the reliance of financial reports filed by Chinese companies. There has been years of abuse reported of Chinese based companies purchasing shell corps and using them for numerous methods to obtain the financial means required. Perhaps that’s why traders have yet to jump on to the tiny float CGLO stock has even though revenues are bursting at the seams, growth appears unstoppable, and the share price is literally trading just .02 above the EPS for the nine months ended September 30, 2012.
China Global Media appears to be different with little to no financing as they dominate as the one-stop shop for those Companies looking to impact Southern China with their products. While the economy as we know it may seem dire, there is no denying that the growth in certain industries and sectors in China have been explosive. Those monopolizing certain sectors or industries have the market in a headlock, especially when it comes to advertising for TV, Radio, Newspaper and magazine, Exhibition and events, Elevator door display, Outdoor billboard and internet arenas.
If the numbers are a true display of the growth this Company has experienced int he last 3 years, explosive is not the right term to use. Sales for the years ended December 31, 2011 and 2010 were reported at $35.93 million and $18.05 million. That’s growth of just under 100% in one calendar year. For the nine months ended September 30, 2012, China Global Media reported sales of $46.51 million, a better than $10 million increase than all of 2011 and still with the busiest quarter, Q4, still to come. The best part: EPS for the nine months ended September 30, 2012 were reported to be $0.13, basic and diluted, the exact same as they were for the same period in 2011.
So why then is this incredible sales generating monster with positive net income and more than 81% insider owned (as of December 31, 2010) penny stock trading just .02 above its current EPS when a year ago the shares were trading at $2.05 on January 19 of this year? Are the revenue number real? Is the float, roughly 10 million, too small for traders to take an interest in? Whatever the reason may be, debt is totally manageable, cash is readily available, toxic financing is no where to be found and growth in a booming sector, advertisement, where the Chinese do things today they couldn’t do 20 years ago, purchase the same types of goods westerners can. CGLO stock is extremely undervalued and on the list of penny stocks for 2013.
About CGLO Stock
China Global Media, Inc. is engaged in the business of advertisement and brand name development in China, mainly in Hunan Province and other southern Chinese provinces. The Company’s business operations are carried out through their variable interest entities: North Latitude, Beichen and Zhongte. North Latitude and Beichen both specialize in automobile industrial advertisement and brand name development. North Latitude organizes auto exhibitions and product promotion events and Beichen focuses on the advertisement coverage of regular media such as TV channels, radio and newspaper. Zhongte focuses on advertisement of other industries, especially food and textile industries. Click here to view the SEC filing for CGLO, here to view the Company website.
Last 5 Trading Sessions:
Bottom Line: Seeing the raw numbers reported after CGLO popped up on the weekend’s penny stocks scan is just mind boggling. NASDAQ and NYSE listed companies would salivate if they had numbers that looked half as good. The lack of interest in CGLO stock is somewhat puzzling and subject for another review when the 10-K comes out in March.
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