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By Ian Wyatt, Big Idea Investor |
ARG | Jul 31, 2007 |
by Growth Report Research Staff
Amerigo Resources (TSE: ARG), a Canadian copper and molybdenum producer with operations in Chile, was added to the Growth Report model portfolio in August 2006.
It later appeared in Growth Report's Resource & Commodity Investing: Top 5 Stocks for 2007, a subscriber-only special report, as one of five stocks of note for investors interested in natural resource investing. Since first appearing in the Growth Report's model portfolio the stock has appreciated approximately 32%.
Amerigo Resources reports their second quarter results today. How will they fare? For an idea, let's revisit their first quarter results.
In May, Amerigo reported total revenue, net of smelter and refinery, of $18.2 million, compared with $17.0 million in the first quarter of 2005. Net earnings increased 21% to $5.6 million, or $0.06 per fully diluted share, from $4.6 million, or $0.05 in the year ago quarter. (It should be noted that Amerigo reports the results of its operations in $US).
In a press release, the company noted, "Even with plant shutdowns in connection with final bridge repairs, Q1-2007 results were an earnings record for the first quarter. Production in Q1-2007 was 6.33 million pounds of copper and 123,448 pounds of molybdenum, a production decrease of 6% in copper and 30% in molybdenum from Q1-2006 due to plant shutdowns and low molybdenum content in fresh tailings. Due to the plant shutdowns MVC operated only 84% of operating days in the quarter."
The Growth Report maintains their Buy rating and, in anticipation of a year of full operating capacity, upwardly revised their original price target of CAD $3.15 to CAD $4.00.
This represents a pricing multiple of approximately 7X the consensus analyst estimate of $US 0.52, or CAD $0.5792 (exchange rate of US$1.00: CAD $0.90604 applied).
Growth Report is a leading investment advisory newsletter dedicated to discovering undervalued small-cap stocks with the potential for high double digit and triple digit returns. Since its inception in 2001, Growth Report has outpaced the market, as measured by the S&P 500, by 12.8%. To learn more about Growth Report or to take out a complimentary 30-day trial subscription, please visit GrowthReport.com.

Readers of Growth Report have benefited from the "6-Point System for Finding Profitable Growth Leaders". They've benefited from finding "undiscovered" companies that meet the stringent criteria set forth by the editors of Growth Report: companies that have yielded returns of +55%, +85%, +175%, +313%, even +1,084%, among others.
Led by Chief Equity Strategist Ian Wyatt, the analysts and researchers of Growth Report pore through hundreds of "undiscovered" companies each month searching for the few gems worthy of bringing to the attention of the readers of Growth Report. From these few worthy candidates, they scrutinize all of the data against their proprietary "6-Point System for Finding Profitable Growth Leaders" to find the two that fit the investment strategy of Growth Report. Each company must meet or exceed the requirements of the 6-point system.
But what is the 6-point system and how can you profit from it right now?
"6-Point System for Finding Profitable Growth Leaders"
- Attractive Growth Valuation: the company's valuation metrics must indicate that the stock is trading below its true value based on company and industry specific factors. The research team looks at many variables including basic items like price to earnings, price to sales, enterprise value, and PEG (PE/growth).
- Financial Outperformance: the company should have accelerated revenue growth, high gross margins, and consistent annual revenue and net income growth of at least 20%.
- Undiscovered, Yet Gaining Exposure: the company should have little or no analyst coverage. Institutional sponsorship should be small but increasing as this demonstrates that most of Wall Street is still unaware of this company's potential. Growing institutional interest in a company typically drives up the share price, so the editors at Growth Report want companies before this happens so readers can take full advantage of the share price run-up.
- Small Capitalization: with a market capitalization between $250 million and $1 billion significant continued growth is possible for years to come with proper execution.
- Leader of the Pack with a Competitive Edge: the company has differentiated itself from its competitors and has less threat of having its core offering commoditized.
- Managed Growth: the company should have a healthy balance sheet with increasing profitability and a positive cash flow from operations. This in turn allows the company to fuel growth with cash from operating activities and be less reliant on debt or share dilutions.
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by Growth Report Research Staff
NVE Corporation (Nasdaq: NVEC)
11409 Valley View Road
Eden Prairie, MN 55344
http://www.nve.com
NVE is a pioneer in the development of sub-atomic RAM based on spintronics or "spin-based electronics," a nanotechnology that uses the "spin" states of electrons at the quantum level to store and transmit data. The company?s efforts are based on two nano-sized "spin" structures: Giant Magnetoresistance (GMR) and spin-dependent tunnel (SDT) junctions.
NVE was incorporated in 1989 to pursue this nanotechnology, which provided the promise of being the next evolutionary step in electronic signal processing and storage. The company produces sensors, couplers and MRAM (magnetoresistive random access memory), it believes has the potential to revolutionize electronic memory.
As a leader in the field, the company holds 44 U.S. patents, the latest issued as of July 3, 2007, for a medical application incorporating multi functions on a single chip. NVE counts the world's most prestigious high technology companies among its customers, including Agilent Technologies Inc. (NYSE: A), Cypress Semiconductor Corp. (NYSE: CY), the Defense Advanced Research Projects Agency (DARPA), the Missile Defense Agency (MDA) and the Office of Naval Research (ONR).
Small products, giant results. For the year ended March 31, 2007, NVE's revenue was $16.46 million, up 35% from the year before. The company earned a full dollar per share, up 161% from 2006. Analysts see revenues of near $20 million and earnings of $1.30 per share for 2008. That?s big.
You just read a Growth Report "Watch List" profile. On each of the first four Thursdays of each month a brief report on a company that is being considered for recommendation by Growth Report analysts will be posted at SmallCapInvestor.com, a sister publication to Growth Report.
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