Opinion on  American Oriental Bioengineering Inc (AOB)     Sector: Healthcare  >  Industry: Biotechnology & Drugs
AOB bashed by media

Over the next few years China's medical 'awareness' will be increasing. The national government recently increased their health related spending 74%. The medical products industry is expected to grow at 50% for the next few years.

With AOB already consolodating the plant/natural medical health products, they are putting themselves into a decent position to profit off china's increased Health awareness.

Recently, AOB has been bashed by Barron's causing an instant 10% fall. I feel the bash is unwarranted and AOB's fundamentals remain very strong.

P/E of 17.96 vs industry 34.19
ROI - 20.95
ROE - 21.40
P/S - 4.77 vs industry 8.08
Growth Rates

The new public offering of shares at 8.50 a price caused the eventual drop down in price continued with no new good news to break the downtrend.

It didn't happen right away because there was a bit of short coverage going on and the publicity of the IPO caused increase interest.

The stock will bottom out around 8.25-8.60 for a while before rising on expectation of their earnings report, or rise again on news of a new acquisition target. Depending on how high the rise into the earnings report, if extraordinary, the stock will fall again after the report. If there is no build up to the report, the stock will jump up post-earnings report.


Its still a solid company with a proven track record in in acquisitions. Excellent margins, good industry, just plagued by poor momentum from back in December when the CEO unexpectedly sold off some shares.

I sold my shares that i previously bought at 8.61 for 9.23 or so, a solid 8 % gain in a few days, this was after the news of the additional IPO at 8.50.

If the stock breaks below 7.75 in the next few weeks I'll bail out and buy in when its in a confirmed uptrend.