China Security & Surveillance Technology Inc. (CSST) an Excellent Buy Option

I'll admit that I didn't know much about investing before doing my MBA at Ivey. In fact, the entire concept on equity and debt markets was as foreign to me as Spanish, and if I ever planned to invest my money I would have, like many of you, had a fund manager do the work for me.

All that's changed thanks to some vigorous personal research and quality instruction. Equipped with a solid understanding of capital markets, I've begun doing my own analysis using a mixture of fundamental and technical analyses to find bargains in the stock market. China Security & Surveillance Technology Inc. (CSST) is a company that's been on my radar since mid-April when the stock price was in the mid $7s, and after seeing it drop to $4.50 last week I finally decided it was time to invest.

In my opinion the stock provides excellent value and growth for the following reasons:

• It's currently selling at .6/1 market/book value ratio despite having very low debt and solid cash flow. I believe it is being unfairly punished by investors weary of China's impending economic slowdown and the European debt crisis. While China's exports may be hurt as a result of reduced demand for Chinese goods due to the slower-than-anticipated global recovery, CSST's business is focused wholly within China's borders where the inevitable boost in domestic consumption via consumer spending as the country's economy develops positions CSST well to continue rapid growth.
  
• 45% (and growing) of its business is in government contracts, a relatively stable form of cash flows. And don't forget: the Chinese government has oodles of cash.
  
• The stock is near its 52-week low ($4.09) and was trading at $7.50 on April 25th, just over a month ago. Did the company somehow lose 45% of its intrinsic value since then? Virtually impossible.
  
• The company recently signed a slew of new contracts, the revenue of which is to be recognized over the next couple of years. These cash flows will undoubtedly substantially boost the company's market capitalization.
  
• As a small cap stock it is less likely to have significant analyst coverage by major financial institutions, increasing the likelihood it may be mis (under) priced.
  
• Its first quarter revenue growth was 24.7% higher compared to that of Q1 2009.

While I'll admit I haven't looked at their books very closely I'm fairly confident that CSST will render a healthy 50% profit within the next 6 months if not more unless the global economy relapses into recession. If nothing else this stock appears to have reached a support point and has nowhere to go but up. If you have some money to invest, I suggest giving China Security & Surveillance Technology Inc. serious consideration.