For a stock with more upside, I like small-cap Puda Coal. PUDA uplisted to the Amex exchange in September 2009 and saw its stock shoot up more than 20% on the day. The company is a supplier of high-grade metallurgical coking coal used to produce coke for steel manufacturing in China and a coal mine consolidator of eight coal mines.
The company recently raised $13 million in a common stock offering priced at $4.75 per share to fund the acquisition of two new coal mines. Investors clearly like the story because the stock has risen from below $5.00 to more than $7.00 at present.
Puda trades at only 16 times trailing earnings, which is a clear discount to U.S. comparables such as James River Coal Company (JRCC), which trades at 22 times earnings and Pacific Coal (PCX), which trades at more than 30 times earnings, despite having similar margins to both. As a result, over the next year, PUDA could potentially have 50%-100% upside in its share price.
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