Terra Nostra Resources (TNRO.OB)
Dear Bottarelli Research Member,
I hope that you were able to get into Origin Agritech Limited (SEED – NASDAQ) for a nice entry price, as the stock has pulled back just enough to get us in around the $10.00 to $10.50 level. Commodities remain a big-time global play, and I’m confident that SEED will serve us well.
Now, in terms of this week’s pick, I think you’ll really like what I’ve discovered. We’ll once again travel to China to add another commodities-based small-cap company that’s really been on the move. But as you’ll quickly see, this one is still very early in their growth cycle.
As you know, China is a huge buyer of copper, zinc, and just about every other base metal you can imagine. That’s what this new pick is all about. Trading for only $4.50 per share, this company is one of the leading copper producers in China. Not only that, but they’re also quickly emerging as a leading stainless steel producer in China as well — yet they remain a Wall Street secret.
They’re located in a highly industrialized coastal province of Shandong, which is midway between Beijing and Shanghai. But what really gets my hair raised is the fact that their earnings were breathtaking. For example, revenues for the fiscal year that ended May 31, 2007 came in at $284.8 million. Compare that to last year’s $5.1 million, and that’s a year-over-year increase of 1,325%. I kid you not. Talk about making money hand over fist! I firmly believe that the company I’m bringing you this week could surpass anything I have found in a very long time. This stock is that good!
The company is called Terra Nostra Resources (TNRO.OB) and I consider this gem a “must-own” stock that we all need in our back pockets. Despite the fact that shares have been moving up fast, I still recommend that you buy at current levels. If we get lucky enough to experience a momentary dip, then add to your position.
On October 22nd, they’re due to report their latest operating results, and if these results come in where I expect them to come in, you’ll see an explosive upside move. So the time to own TNRO is now. I’ll hand things off to Bryan for the full details on this unique gem in just a moment, but first let’s address some position updates.
UPDATES
Beacon Power (BCON – NASDAQ): This week, a company called Arete Power made a desperate attempt to pull the rug out from under BCON by filing a patent infringement suit on their flywheel energy storage systems. I have been in touch with them about this, and they told me that they anticipate to vigorously defend themselves, contesting whether the patent is valid and whether any infringement has occurred. I have no doubt that BCON will nip this in the bud. BCON’s technology is awesome so continue to hold for more upside.
Idaho General Mines (GMO – AMEX): This stock just made it back to its old highs, and believe me, the upside story is far from over. I remain very bullish on molybdenum, so continue holding GMO for more gains.
Uranium Resources (URRE – NASDAQ): Similar to GMO, URRE has also been moving up rather nicely. They just entered into a definitive agreement with BHP Billiton to acquire 100% ownership of Rio Algom Mining, which is a conventional uranium mill. This is big news. I believe the time for this company to fly is in close proximity. As I write, oil prices are pushing $89.00 a barrel. With these high prices, it’s only a matter of time before uranium prices spike, making a strong case for companies like URRE. Hold.
JA Solar Holdings (JASO – NASDAQ): Just like that, JASO has hit yet another new 52-week high, handing us a gain of over 100%. By this time, you should have taken all of your “seed money” off the table, which enables you to sit back and enjoy the free ride on the remainder of your position. I still believe that $65 is in the cards, so continue holding for more gains!
US Geothermal (UGTH.OB): Another new 52-week high! We are now up over 50% from our original June 25th entry point, so the smart thing to do is to take some of your profits off the table. If shares move up to $5.00 on an intra-day basis, I want you to cash out all of your original “seed money” and hold the remainder of your position for a free ride. But until then, take some profits now!
Puda Coal (PUDC.OB): I got us into this play very early on with the belief that the steel industry in the Pacific Rim will continue to experience unprecedented demand. Since I’m not seeing any slowdown in global expansion, I now feel that PUDC is ready to make a run to its old highs. Coaking coal for making steel remains a strong global play, so continue to hold PUDC.
Lighting Science (LSGP.OB): LSGP and LED Holdings just joined forces. This move will strengthen their global presence and bolster their ability to develop and market a complete spectrum of digitally-controlled lighting solutions. Keep in mind, the push towards LED lighting is just getting going, so let’s be patient. The global push for energy efficient lighting is certainly in strong demand, and this little gem is going to benefit in a big way. Hold.
EDITOR’S NOTE: Looking at the full spectrum of our Bottarelli Research Small Cap plays, I must say that we’ve been on a nice roll lately — and I have no intention of slowing down anytime soon. But speaking of being on a roll, I have to tell you, Bryan has absolutely been on fire in his options service.
As I write, Bottarelli Research Options has been perfect in the month of October, hitting winners on 15 out of 15 plays. I don’t know of anyone out there that consistently does what Bryan does, and — believe me — I’ve tried every service out there. Nothing compares to what Bryan is doing.Not only is he a friend, but he is one of the savviest option traders alive.
Just like old E.F.Hutton used to say, “You make money the old fashioned way: You earn it.” To me, this quote exemplifies why Bryan and I work so diligently to bring you the very best investment opportunities each and every day. Speaking from the heart, returns like we’ve seen recently in both Bottarelli Research Small Cap and Bottarelli Research Options services make me truly honored to have you as part of our elite group of small-cap investors — and I feel very strongly about exposing you to the most profitable investment opportunities. So, if you have yet to add Bryan’s fantastic options program to your investment arsenal, I want you to take a moment and join this service right now. Click the secure link below to subscribe and get started. Trust me, you’ll be glad you did!
https://www.bottarelliresearch.com/subscribe/?service=opt&offer=QZVG67AAD8
Have a good week.
Sincerely,
Quarterly Revenue Growth of 2,743%
Are You Kidding Me?
I have a feeling that Mark has just uncovered the next major small-cap winner.
To be blunt, Terra Nostra Resources is one of the most rapidly-growing small-cap picks I’ve ever encountered.
Headquartered in Pasadena, California but operating in the People’s Republic of China, Terra Nostra Resources is the first foreign company to hold a majority ownership position in both the copper and stainless steel refining industries in China.
I’ll share with you their eye-popping financial numbers in just a moment, but first let’s consider the statistics on TNRO’s two primary business segments: Copper and stainless steel.
Starting with copper, 66% of China’s copper consumption comes from the wire cable industry. You probably consider copper wires an afterthought, but this market is actually quite massive. When you consider that power grids, urban railways, nuclear power plants, telecom infrastructure, and power equipment all requite copper wire, it makes sense that this market niche generates $30 billion in revenues. And with unprecedented demand for wire cables and copper, this market will continue to grow at an exponential rate.
In fact, over the last 15 years, China’s wire cable industry has experienced an average annual growth rate of 16%. Looking specifically at China, they’ve just surpassed Japan and the United States to become the world’s largest wire cable manufacturer — and they’re now the single largest copper consumer, eating up 22% of the world’s total demand. Since China’s domestic copper production can only meet 60% of their country’s total demand, its’ easy to see why copper will enjoy double-digit growth projections through 2010. That’s why TNRO’s Jinpeng Copper venture is so promising.
JINPENG COPPER: TNRO owns a 51% joint venture interest in a company called Jinpeng Copper, which manufactures and sells electrolytic copper and copper rods. “Electrolytic copper” is an intermediate product used for melting and casting copper wires, rods, and ingots. It’s also blended with other metals to form metal alloys. They also produce bullion-quality gold and silver as a manufacturing by-product. Based on the copper growth statistics outlined above, Jinpeng Copper is quickly emerging as the leading copper producer in China.
TNRO’s second market segment is stainless steel, which is used in industries like automotive, construction, food service, and consumer durables (which include goods like refrigerators, dishwashers, ranges, etc.). On a global scale, stainless steel is the fastest-growing metal industry — and China is the fastest growing stainless steel market in the world. That’s a double whammy.
And just like copper, China is also the single largest consumer of stainless steel, eating up 22% of the global demand. Of course, domestic production is nowhere close to meeting the demand, and that’s why TNRO’s second venture, Quanxin Stainless Steel, is also so promising.
QUANXIN STAINLESS STEEL: TNRO owns a 51% joint venture interest in Quanxin Stainless Steel, which produces cast billets for downstream rolling into stainless steel strips and stainless steel rods. The company operates a super-modern stainless steel production facility in Zibo City that supplies billets to factories throughout China.
When you combine both of these copper and stainless steel ventures, you’ll see that TNRO is well-positioned to supply China with their insatiable copper and stainless steel demand. In fact, TNRO is positioned to evolve into one of the 10 largest electrolytic copper producers in China — simply because of their incredible geographic location.
You see, TNRO currently operates the second largest and most modern stainless steel mill in Shandong Province — and this is huge. Both of TNRO’s production facilities are strategically positioned midway between Beijing and Shanghai, home to a population of 94 million people. This Shandong location is particularly rich in minerals and energy resources, and with an extensive coastal area which offers 26 ports with a cargo handling capacity of over 100 million tons per year, it’s easy to understand why TNRO has two of the most powerful business segments operating in one of the most attractive geographic locations in all of China. See the map below.
But that’s just the beginning of this exciting investment opportunity. Now comes the most exciting part of TNRO: The Numbers.Get this:
- Consolidated revenue for the fiscal year that ended May 31st 2007 was $284.8 million compared to $5.1 million in the 2006 fiscal period. That’s a 56-fold increase year over year!
- Gross profit for the fiscal year was $18.1 million compared to a loss of $1.7 million for the same period last year. And operating profits were $1.8 million compared to a loss of $13.5 million in fiscal year 2006. What an amazing year-over-year turn-around!
- And finally, the cost of sales for the year came in at $266.7 million compared $6.8 million in 2006. That’s a 39-fold increase year over year!
With both the stainless steel and copper facilities hitting on all cylinders, TNRO expects to report revenues over $1 billion within two years.
With a current market cap of $179.47 million, you can only imagine what $1 billion in sales over two years could do to this company’s stock price. In short, a 10-to-1 return is certainly not out of the question. In fact, with bowl-shaking quarterly revenue growth of 2,743%, it’s not difficult to predict that the stock’s 123% gain over the last 52 weeks is just the beginning of a long and prosperous upside run.
Just listen to Terra Nostra’s Chief Executive Officer Sun Liu James Po: “At present, strong market conditions for our products exist in China. Demand for stainless steel and copper remains high, driven by continued economic growth and development in China. This market situation has allowed Terra Nostra to pre-sell certain production at premium contracted prices. We expect these strong market conditions to remain for the foreseeable future while the Company continues to ramp up production at current facilities to full capacity to meet market demands."
Also, TNRO has made no secret about putting out “feelers” concerning expanding their current copper and stainless steel operations — which translates into possible acquisitions or partnership deals.
After all, the company wants to become the most profitable out of the top 10 producers of copper and stainless steel in China — and with the second largest and most modern stainless steel mill perfectly positioned within the 94 million people living in the Shandong Province, the future certainly looks promising. Since the stock just established three new 52-week highs on October 15th, 16th, and 18th, this signals to me that the upside momentum is just now beginning to gain strength. Let’s jump aboard TNRO now and ride their exploding copper and stainless steel business for all that we can.
PLAY: Buy shares of Terra Nostra Resources (TNRO.OB) at or under $4.50, good for the week.
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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