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.
LJ International, Inc. (NASDAQ: JADE) is the favorite speculative play from Ian Wyatt, editor of Rising Star Stocks. The small cap advisor explains, "JADE is a fast growing, vertically integrated jewelry company that employs a 'mine to market' business strategy.
"LJ International is a pure play in the superlative growth of China's domestic jewelry sector estimated at over $20 billion and growing at 18% to 20% per year. Its has also established a presence as a growing wholesaler in the massive $45 billion U.S. jewelry market.
"Equally exciting has been the company's successful venture into the retail jewelry business vis-à-vis its ENZO retail chain in China, which currently comprises 35 stores and is expected to grow to 100 stores just in time for the start of the Beijing Olympics in June of 2008.
"Fiscal 2005 represented the third straight year in which revenues grew and the fourth straight year where earnings rose. In 2005,revenue was $94.6 million, an increase of 22%. Net income was $0.24 per share, an increase of 26%.
"Analysts expect LJI to earn $0.28 per share on $119.47 million of revenue in fiscal 2006 ending December 2006. The Street expects LJI to earn $0.39 per share on $143.97 million of revenue in fiscal 2007, up 21% year-over-year.
"We are extremely excited about LJI's prospects. LJI is well positioned with a premium brand in the Chinese jewelry market, which is poised for excess growth in the near and far term. We are firm believers in this company and as such would be aggressive buyers of the stock. We feel the company's performance and potential justify a target of $6."
To see Ian's favorite conservative idea for 2007, click here.
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