Stock Alert for Wowjoint Holdings Ltd. (BWOW)
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    Stock Alert for Wowjoint Holdings Ltd. (BWOW)

    Wowjoint Holdings Ltd. (NASDAQ: BWOW) is a provider of customized heavy duty lifting and carrying machinery used in large scale infrastructure projects such as railway, highway and bridge construction. The Company’s main product lines include launching gantries, tyre trolleys, special carriers and marine hoists. Its innovative design capabilities have resulted in patent grants and proprietary products. BWOW believes it is well positioned to benefit directly from China’s rapid infrastructure development by leveraging its extensive operational experience and long-term relationships with established blue chip customers.

    Share Statistics (19-Dec-11) FY2009 FY2010 % Chg Q22010 Q22011 % Chg
    Symbol BWOW Revenue, $Mn 1.70 24.06 1315.3% 2.56 8.42 228.9%
    Current price $0.70 Gross marg. -262.9% 24.9% -109.5% 23.4% 29.0% 23.9%
    52wk Range: $0.32-$4.31 Oper. margin 2.7% 18.0%
    Avg Vol (3m): 27,258 Net margin -314.1% 1.7% -100.5% 29.7% 12.11% -59.2%
    Market Cap. 5.56M
    Shares Outstanding 7.95M EPS, $ -0.94 0.05 -105.3% -0.10 0.13 -230.0%

    Source:, SEC Filings.

    Investment Highlight

    Shares of BWOW jumped as much as 247% Monday, following news that certain of the Company’s executive officers will conduct purchases of the Company’s stock on the open market.  Over 1.76 million shares traded hands during the session, versus the 10-day average of just 22.8 K.  BWOW added $0.34 to close the session at $0.70.  Over the last 52 weeks, the stock has ranged from a low of $0.32 to a high of $4.31.  It is currently above its 50-day moving average of $0.63 and below its 200-day moving average of $1.24.

    Shares of the China-based heavy-duty lifting and carrying machinery company have gained 52.0% in the last five days and 14.6% in the last month.  Year-to-date, the stock is down 80.0%.

    Demonstrating continued confidence in the Company, Director and CEO Yabin Liu , Chief Technology Officer and Director Fude Zhang; and Senior VP of Marketing Liguo Liu, were reported to be participating in the purchase plan.

    According to the press release, between January 1 and June 15 of next year, they will collectively purchase up to $200 K worth of shares on the open market, which as of the closing price on December 15, 2011, is approximately 500 K shares. These purchases will occur each month, with a minimum of 5 K shares purchased during each month.

    “Our executive officers believe that the Company’s stock is greatly undervalued and we have a strong conviction for Wowjoint’s future success. We are dedicated to the Company and are demonstrating our dedication through buying stock in the open market,” commented CEO Yabin Liu.  “We’ve discussed our desire to conduct an executive stock purchase with the board of directors following the determination that it’s not the best use of Wowjoint’s current cash to conduct a stock buyback, as its best used for business expansion purposes. The board supports our decision and we look forward to commencing our Purchase Plan at the beginning of the year.”


    Financial Summary

    BWOW reported revenues of $5.4 million for the third quarter ended September 30, 2011, compared to $8.7 million in the third quarter of 2010.  Technical service sales were $0.2 million for the quarter, compared to $1.7 million in the same quarter last year. Lease revenue was $0.3 million for the third quarter 2011, which is a recent addition to the Company’s revenue stream.

    Gross profit was $1.3 million, compared to $1.9 million in the year ago period. Gross margins increased 280 basis points to 24.8% in the third quarter 2011, compared to 22.0% in the same period in 2010.

    BWOW realized a net income of $0.2 million , or $0.03 per share based on 7.9 million weighted average shares outstanding, for the latest quarter, compared to $0.3 million in same period 2010.

    At September 30, 2011, the Company’s cash and cash equivalents totaled $3.8 million, versus $4.3 million at June 30, 2011 .

    BWOW expects to report revenue of $5 to $7 million for the fourth quarter of 2011.  As of September 30, 2011 , the Company’s backlog of signed contracts totaled approximately $21.3 million .


    Technical Analysis


    BWOW’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Dec19-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Komatsu Ltd. KMTUY 22.88 22.14B 9.26 8.11 0.84 0.78
    Caterpillar Inc. CAT 87.08 56.31B 12.82 9.64 0.96 0.84
    Farm & Construction Machinery Median       9.35 n/a 0.61 n/a
    Wowjoint Holdings Ltd. BWOW 0.76 6.01M n/a n/a n/a n/a

    Source: Thomson Financial

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