Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.
China Direct, Inc. (OTCBB: CHND) is the favorite speculative idea for 2007 from Jim Trippon. The editor of The China Stock Digest explains, "China Direct invests in companies that need a capital infusion to achieve the next level in their growth.
"Unfortunately, major Chinese banks and other large financial institutions have shunned smaller institutions and typically lend only to the country's very large cap companies. The small to mid-cap investment gap is where China Direct comes in.
"This year China Direct has invested $4 million to acquire controlling interests in five companies, including a chemical maker, a magnesium refiner, a logistics company, a toy producer, and a metals recycling firm. China Direct projects that revenues will double from 2007 to 2008 as it continues its small and mid-cap acquisition and expansion strategy.
"These are lofty goals. But during my recent tour of China Direct companies in Shanghai, I saw well-managed, efficient operations that appear to confirm China Direct's goals: conducting due diligence, purchasing well-researched viable growth companies at attractive prices, and using China Direct management experience to reduce risk.
"I wish to emphasize the speculative nature of this pick, as our policy is to generally focus on very large cap Chinese firms that trade as ADRs. There is a risk that China Direct may fall short of its objectives. On the other hand, it may impress and enrich our portfolios by rising to the heights it aspires to. We certainly hope it does."
To see Jim's favorite conservative stock for 2007, click here.
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