Dutton Associates Announces Investment Opinion: LJ International Maintained At Strong Speculative Buy Rating By Dutton Associat
June 19 2006 - 12:00PM
Business Wire
Dutton Associates continues its coverage of LJ International Inc.
(Nasdaq:JADE) with an update report maintaining its rating at
Strong Speculative Buy and a $4.80 target price. The updated
initial report by Dutton senior analyst Sally L. Wallick, CFA is
available at www.jmdutton.com as well as from First Call,
Bloomberg, Zacks, Reuters, Knobias, and other leading financial
portals. Hong Kong-based LJ International, Inc. (LJI) designs,
manufactures, distributes and markets a full range of fine jewelry.
In addition, it operates a rapidly growing chain of retail jewelry
stores in China. We reiterate our Strong Speculative Buy rating on
LJI's shares, based on what we view as the Company's above-average
long-term revenue and earnings growth prospects. We believe that
LJI's vertically integrated structure, extensive product line, and
diversified customer base provide significant competitive
advantages, while its expansion into the retail jewelry business in
China represents an exceptional growth opportunity with the
potential to contribute substantial incremental revenue and
earnings long-term. LJI's first quarter revenue increased 39% year
over year to $24.2 million, while diluted earnings were flat year
over year at $0.02 per share. Revenue growth, gross margin
expansion and expense leverage contributed to a 29% increase in net
income year over year, but a higher diluted share count resulted in
diluted earnings per share even with year-ago results. We continue
to project full-year 2006 diluted earnings for LJI of $0.25 per
share. In 2007, when we expect the ENZO division to turn
profitable, we project earnings of $0.33 per share. About Dutton
Associates Dutton Associates is one of the largest independent
investment research firms in the U.S. Its 31 senior analysts are
primarily CFAs, and have expertise in many industries. Dutton
Associates provides continuing analyst coverage of over 140
enrolled companies, and its research, estimates, and ratings are
carried in all the major databases serving institutions and online
investors. Our annual research coverage, which currently costs US
$35,000 prepaid, is 4 Research Reports, typically published
quarterly, and requisite Research Notes. Dutton Associates received
$85,000 from the Company (for renewal) and Investor Relations
International for 12 Research Reports with coverage commencing on
10/23/2003. We do not accept payment of our fees in company stock.
Our principals and analysts are prohibited from owning or trading
in securities of covered companies. The views expressed in this
research report accurately reflect the analyst's personal views
about the subject securities or issuer. Neither the analyst's
compensation nor the compensation received by us is in any way
related to the specific ratings or views contained in this research
report or note. Please read full disclosures and analyst background
at www.jmdutton.com before investing.
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