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No. of Recommendations: 12
From the Complete Growth Investor discussion boards....


At $3, Gushan Environmental (GU), China's largest biodiesel producer, boasts:

1.) 68% of the stock price is in cash (holy used cooking oil!).

2.) 0.5x sales

3.) EV/EBITDA: 2x

4.) Ben Graham ratio of 3x (= P/E x P/B; Graham advised buy under 24x)

5.) Projected 3-year CAGR on investment of 44%

6.) EBITDA is 42% of sales

7.) 2007 sales @ $138M $USD, a 93% CAGR since 2002. 2007 GAAP net income @ $46M, a 86% CAGR since 2002.

8.) Processes 2.4x more biodiesel than second its largest competitor, Wuxi Huahong.

9.) Positive and growing operating cash flow

10.) Tangible book about $2 a share. Not sure how specialized the fixed assets are, though. (The more specialized a firm's fixed assets, the less readily they can be sold in a pinch and thus tangible book may be overstated; e.g., Iridium's satellites.)

11.) $0 debt

12.) LT growth rate: 24% (Reuters)

13.) EV/FCF (2007 FY) is 2x and change, assuming maintenance capex equals depreciation.

I have a starter position in Gushan, and intend to research it further.

Two negatives are rapid share count growth and no apparent insider ownership. I'll ask management why.

Hewitt
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