UTVG – Universal Travel Group

I usually stay away from stocks that trade under $3, but one just caught my eye. It is Universal Travel Group, ticket symbol: UTVG

Brief Description:
Universal Travel Group, through its wholly owned subsidiary, Shenzhen Yu Zhi Lu Aviation Service Company Ltd. (YZL), provides reservation, booking, travel and tourism services throughout China. The company’s primary offerings include domestic and international air ticket booking, hotel booking, leisure tourism packaging, restaurant booking for individuals, groups and corporations, and air cargo transportation. Shenzhen Yu Zhi Lu is one of the travel agency in Shenzhen, China. The company has eight company owned reservation office locations, 103 franchised locations and a call center facility. Located in the city of Shenzhen, Universal Travel Group targets the business and leisure traveler. The Company serves those traveling to and from mainland China, as well as the tourist markets of Taiwan, Macau and Hong Kong. The Company has partnerships with Chinese domestic and international airlines, including Iberia, Virgin Atlantic, Turkish Airlines and Swissair.

Basically, UTVG is the second best travel agency in China after Ctrip.com (symbol is CTRP).

The float is 33 million shares. 2007 EPS is .26 cents per share.

The company earlier today report their earnings in a 10-K, and they have showed very impressive growth from 2006-2007:

Highlights:
Margins: Up 15% (2006: 54%; 2007: 62%)
Revenue: Up 67% (2006: 10 million; 2007: $16.7 million)
Income: Up 67% (2006: $5.4 million; 2007: $9.2 million)

They are now trading at 1.2X sales, which is almost unheard of.

Here is the key – Although they have reported their earnings earlier today in their 10K, they have not released the PR yet. Also, they have a CC call on April 1 at 8:00am EST and will be presenting at the Brean Murray Investor presentation on April 3.

The chart looks like if there is a close above 1.57 (10-day), it may run-up to the 1.90 level, with 2.20 being the hard resistance.

The MACD has started to turn positive and RSI is starting to climb.

This is a risky stock, but remember this. If it goes from 1.60 to 1.90, you have a 20% profit.

Please do your own due diligence. I have initiated a small position today.