Bullion or Beef?

Stocks of the Day: BKC & JADE
Two interesting stocks appeared on my research screens last night for MSW. One stock is being accumulated on heavy price and volume action while the other is a young IPO that looks ready to breakout to new all-time highs. One stock is a household name and has been around for more than 50 years while the other stock in basically unknown from Hong Kong.

Our beef stock (if we can call it that), Burger King Holdings, Inc. (BKC), through its subsidiary, Burger King Corporation, engages in the franchising and operation of fast food hamburger restaurants. Burger King also offers soft drinks and other food items. As of August 23, 2006, it operated approximately 11,000 restaurants in 65 countries worldwide. The company was founded in 1954 and is headquartered in Miami, Florida.

Not quite bullion but LJ International, Inc (JADE) engages in designing, branding, manufacturing, marketing, and distributing fine jewelry. The company specializes in the semiprecious jewelry, as well as offers pieces set in yellow gold, white gold, platinum, or sterling silver and adorned with semiprecious stones, diamonds, pearls, and precious stones. Its product line includes earrings, necklaces, pendants, rings, and bracelets. The company distributes its products principally to fine jewelers, department stores, national jewelry chains, and electronic and specialty retailers throughout North America and Western Europe, as well as in Japan and the People’s Republic of China. LJ International was founded in 1987 and is based in Hung Hom, Hong Kong.

Neither stock is the greatest in the world but they are both interesting based solely on their current charts. BKC has been trading sideways over the past two months with strong price and volume action over the past week. A move to new highs (all-time) on above average volume would be positive and signals an ideal entry opportunity. The fundamentals are what they are: average.

As for JADE, it’s a lower priced stock that I typically steer clear of but I can’t ignore the huge surge in price and volume over the past several weeks. The stock had doubled in price on volume 3-6 sixes greater than the average. It looks extended to the average investor and I am not jumping on at this point because the fundamentals don’t support the position but I am interested if the stock consolidates and offers an entry area. A stock with this much interest is going somewhere based off of some type of news or hype. I don’t know what it is at this time but that is not important.

JADE – Institutional Numbers:
Held by Institutions: 4%
Money Market: 9
Mutual Fund: 3
Other: 1

Top Holder: Portolan Capital Management, LLC
300k Shares for 0.32% of Portfolio
Total Equity Value of Portfolio: $281.0 million

A few Fundamental Numbers:
Market Cap.: $175mm
Outstanding Shares: 18.94mm
Short Ratio: 1.8
Operating Margin: 7.29%
Net Income $M: 87.98
ROA (%): 4.49%
ROE (%): 9.45%
P/E (TTM): 35.4
P/E (Forward): 23.12

Earnings:
Yearly (2006): 0.28E
Yearly (2005): 0.21
Yearly (2004): 0.22
Yearly (2003): 0.19
Yearly (2002): (0.90)

Revenue (millions):
Yearly (2005): 94.6
Yearly (2004): 77.4
Yearly (2003): 58.2
Yearly (2002): 39.2

Net Income:
2005: 3.06
2004: 2.69
2003: 1.81

BKC – Institutional Numbers:
Held by Institutions: 64.4%
Money Market: 68
Mutual Fund: 63
Other: 6

Top Holder: Goldman Sachs Group Inc.
32mm Shares for 0.02% of Portfolio
Total Equity Value of Portfolio: $193.0 billion

A few Fundamental Numbers:
Market Cap.: $2.88bb
Outstanding Shares: 133.89mm
Short Ratio: 5.0
Operating Margin: 9.10%
Profit Margin: 2.63%
Net Income $M: 27.0
ROA (%): 4.99%
ROE (%): 9.59%
P/E (TTM): 48.8
P/E (Forward): 17.44

Quarterly Earnings Growth (yoy): 40.70%
Quarterly Revenue Growth (yoy): 9.20%

Enjoy!