Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Finding the best tech stock to own today

Stock-Markets / Tech Stocks Jun 12, 2007 - 08:35 AM GMT

By: Money_and_Markets

Stock-Markets

Twenty-two days — that's how long I spent racing around Asia on this last trip. I missed one of my daughter's dance recitals and a lot of my boys' baseball games. But I firmly believe there's no substitute for boots-on-the-ground research.

Reason: Every trip I've ever made has translated into big investment profits down the road.

And let me tell you, this was my most productive trip yet! I looked at several dozen companies, and I have a small handful to add to my buy list.


One company, however, stood out from all the rest. In my opinion, it's the #1 best tech stock in the world to own today. My investigation started with a bus ride …

"Jhongli? Most Americans Visit Our Shijr Plant!"

My host was just trying to be helpful. He knew that the location I wanted to visit was a long bus ride to the gritty industrial city of Jhongli. It wasn't exactly a popular tourist destination. The other factory was just outside of Taipei and much more convenient.

But I wanted to visit the Jhongli factory for two reasons:

#1. 87% of this company's sales were from the Jhongli division.

#2. I've learned that the further away you get from the Investor Relations department, the more useful the information you'll get.

So … I was off on another adventure on another crowded bus to another Asian backwater town equivalent. Hey, riding a bus in a foreign country is an adventure by itself. It wasn't that long ago that I accidentally ended up on my way to Tibet because of incorrect pronunciation!

Jhongli is an ordinary, busy industrial city about two hours outside of Taipei. It is considered the capital city of the native Hakka people who live there in great numbers. In recent years, the area has also seen a large influx of foreign workers — mainly from the Philippines and Thailand. They've settled there because of the abundance of factory jobs.

Two of my escorts were T.C. Chung, the plant manager, and Frank Wu, the production manager. These two men are on the front lines so they don't suffer from the same perpetual optimism as the corporate mouthpieces.

I don't mean to imply that investor relations people are dishonest. It's just that their job entails painting their company in the most positive light possible. In contrast, Mr. Chung and Mr. Wu are just simple, hard-working employees who answer questions with honest and often revealing answers. I like that.

The factory itself was much like many of the other high-tech factories I've visited. The first floor was for administration, and the middle two floors for production. After touring the first three floors, my guides started to escort me down the stairs.

"What's on the fourth floor?" I asked. The answer made my eyes bug out …

"Our New Production Equipment Will Arrive In June, and It Will Fill Up the Fourth Floor."

That meant that the company was going to increase its production by 50%. In my book, more business usually translates into more profits.

Just to make sure, I asked how many shifts a day would the fourth floor be running.

The reply: "Twenty-four hours a day for six days a week, Mr. Sagami. Our current staff has been working seven days a week too many times."

The company's numbers back up those claims. Sales of this factory's division more than doubled in 2006. And according to my host, they should do the same again this year!

In fact, this company is already looking to acquire more production space because they expect to reach maximum production capacity by 2008.

"Business is VERY good, Mr. Sagami."

Yes, business is very good. What's more, it could take off like a rocket to the moon if it gets a piece of an upcoming Federal Aviation Administration contract to replace our nation's outdated radar-based flight tracking system.

When I asked about it, my host smiled from ear to ear and said, "I cannot talk about it, but we are very — how do you say — happy!"

His coy answer told me volumes about the company's chances. If all goes well, I think this stock could double in very short order.

Don't let me give you the wrong idea, though. The reason to own this stock is not because of what it may or may not get out of the FAA. You want to own this stock because it's the dominant leader in a business that is growing at a breakneck pace.

But wait … there are even more reasons to like this company:

Eating their own cooking: The company's two founders are also its two largest shareholders. Overall, insiders own a whopping 41% of the stock. That alignment with shareholders carries over to executive compensation, too. The CEO paid himself just a $250,000 salary and a $203 bonus last year. That's not a misprint … $203!

Fast, but getting faster: Since its 2000 IPO, this company has increased sales at an annualized 30.6% clip. And business is accelerating. First-quarter sales soared 53% while profits jumped 60%.

The best tech bargain on the planet: This company is selling for only 20 times earnings, which means you are getting a mountain of growth for peanuts. I consider it the very best tech stock bargain I've found anywhere.

If that's not enough to knock your socks off, get this: The company earns returns of around 50% on its invested capital, one of the most productive numbers you'll ever see!

Pristine balance sheet: I know I'm old fashioned, but I'm a stickler for clean balance sheets. This company has ZERO debt, $360 million in cash, and it recently doubled its dividend. It also regularly engages in share repurchases.

I got back to my hotel room and sent my Asia Stock Alert subscribers an urgent Flash Alert. The stock was in the mid-$50s then, and now it's already jumped to the low $60s.

That's nothing though — my first target is $100 by the end of 2008, and no baloney, I expect it to quadruple in value by 2010!

So was that bus ride to Jhongli worth it? You bet!

Best wishes,

By Tony Sagami

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in