3. China Sky One Medical ( CSKI) sells supplements and over-the-counter drugs.

Numbers: Third-quarter profit grew 25% to $12 million, or 74 cents a share, as revenue climbed 46% to $43 million. China Sky One's operating margin narrowed from 42% to 37%. Its balance sheet stores $56 million of cash and no debt.

Stock: China Sky One Medical appreciated 52% in the past year, trailing U.S. benchmarks. The stock trades at a price-to-projected-earnings ratio of 5.9, a 64% discount to the peer group average. Its PEG ratio of 0.3 indicates a bargain based on expected growth.

Catalyst: Concerns about competition and product quality have dogged this stock in recent months, but its diversification into medical-testing kits and bio-engineering products is likely to bolster growth. Its net cash position should reduce trepidation.

Consensus: Just three analysts follow China Sky One, and they all advocate purchasing the shares. The most bullish price target comes from Singular Research, which expects the stock to rise 77% to $28.50. It places in the top 6% of our coverage universe.

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