This is the first part of a series.

By Zack Buckley and Glen Bradford, TheStreet contributors

After researching more than 5,000 companies, we've come up with 50 stocks that we believe to be the most undervalued. While we don't know where they will be in the next year, as we cannot predict the market, we believe in the next five years investors will be very rewarded by purchasing these stocks.

The purpose of this series isn't to go into great depth on the greatest opportunities in the world, but to cover enough to prove that listening to us in the future is worth your time. We will guarantee we've done much more research than our cursory summaries show. We are so emphatic about the prospects for these companies that we're going to China this summer to visit these firms. We obviously don't like our 50th choice as much as our first, so we have created a tier system for the companies. While we think they are all great buys, the articles are tiered beginning with our favorite companies and ending with slightly less attractive but still very undervalued companies.

Our first company is HearUSA ( EAR), a potential buyout candidate, and only an $80 million concern. Siemens ( SI) has 600 million euros to purchase a company and can't purchase any company that competes with HearUSA. You do the math. HearUSA also is expanding its business across the U.S.

Another U.S. company is DJSP Enterprises ( DJSP), our last U.S. company in the top 50. It services foreclosures in Florida and is expanding across the country. As we all know, foreclosures are sky high in Florida and high across the rest of the U.S. The price-to-earnings ratio right now is about 5.

China Sun Group High-Tech ( CSGH) is a battery manufacturer in China with three main products -- cobalt carbonate, cobaltosic oxide and lithium cobalt oxide -- used in the production of lithium-ion batteries. It has a P/E of 8.33. For fiscal 2008, the company saw revenue growth of 46% and net income growth of 27%.

Biopharm Asia ( BFAR.OB) is trading at a P/E of 4 and expanding quickly with 22% revenue growth in 2008. The company has its own line of Chinese traditional medicines and also is a distributor of pharmaceuticals. The stock seems too cheap not to own.

Skystar Bio Pharmaceutical ( SKBI) is a fantastic company because of a strong sustainable competitive advantage it has due to being the only veterinary medicine company in China that isn't a stated-owned enterprise. With a P/E of 6, more than 30% annualized growth and return on equity currently over 50%, this is a no-brainer.

Biostar Pharmaceuticals ( BSPM.OB) is another great pharmaceutical company with a sustainable competitive advantage -- the firm has the only government-approved OTC treatment for hepatitis B in China. This may affect up to 130 million people. The company is expanding its sales outlets to 10,000 from 3,500 just this year. With a P/E of 8, this company is incredibly cheap both on a current and forward-looking basis.

China Energy ( CHGY.OB) is a $100 million company divided into two business segments -- coal and power. Its coal production in 2010 is estimated to be larger than 2008 and 2009 combined due to a change in the company's mining methods, which changes the recovery rate from 35% to 80%.

China-Biotics ( CHBT) plans to quadruple revenue. While it may currently look expensive with a P/E of 23, at full capacity this company could be as low as 5.75, not to mention it expects to continue growing rapidly in coming years with a potential 1,000% or more revenue growth in the next five to 10 years.

Longwei Petroleum ( LPIH.OB) will make 65 cents a share based on 2011 guidance to capacity expansion. Rumors are that things are going as planned, and Longwei should be able to continue growing.

We'll leave you with a somewhat speculative but extremely rewarding company. This is a $48 million company with a current P/E of 4.2. Jade Art Group ( JADA.OB) is up more than 50% just as we have written this article. Jade Art's mine can produce up to 40,000 tons of jade a year. With jade at $3,200 a ton, that makes $128 million in revenue for a full year of capacity. With profit margins hovering around 60%, we conservatively estimate net income of $60 million at full capacity. This would put the company at a P/E of less than 1!

Jade Art is a growing company. Just for it to return to a reasonable P/E of 10 would make the stock a 20 bagger.

At the time of publication, Bradford and Buckley were long all stocks mentioned in this article.
Buckley will be spending three months this year in China visiting companies that are exciting investment opportunities. Follow him on his blog,, as he travels across China touring factories and interviewing management. Bradford is the CEO of ARM Holdings LLC. He's pursuing an MBA at Purdue University and gained recognition by trading his entire tuition in the stock market as well as that of his roommate.