SOURCE: Stock Market Alerts

August 18, 2009 08:38 ET

Stock in Focus: China Armco Metals -- August 18, 2009

NOTE TO EDITORS: The Following Is an Investment Opinion Being Issued by Stock Market Alerts LLC.

MIAMI, FL--(Marketwire - August 18, 2009) - Stock Market Alert's performance stock list includes: China Armco Metals, Inc. (OTCBB: CNAM), United States Steel Corporation (NYSE: X), Alcoa (NYSE: AA) and GOLDCORP INC. (NYSE: GG).

Breaking News: China Armco Metals, Inc. (OTCBB: CNAM) secures $13 million line of credit from the Bank of China for its scrap metal recycling project. This morning the company, a distributor of imported metal ore with plans to launch a new state of the art scrap metal recycling facility in China, issued a press release announcing that Armet Renewable Resources Co, Ltd. ("Armet"), the Company's wholly owned subsidiary, received $13 million 3 year Line of Credit from the Bank of China on August 11, 2009.

The terms of the credit line allow for approximately $2.9 Million to be used for working capital for the operation of its metal recycling operations with the balance to be used for fixed asset purchases associated with its recycling project.

Management anticipates it will commence operations at its 1 million ton recycling facility in the fourth quarter of 2009. It is anticipated that the metal recycled by Armet will be sold for use in the production of steel within China. China is currently the largest producer and consumer of steel in the world.

Kexuan Yao, Chairman and CEO of China Armco Metals, Inc., commented, "We are extremely pleased to have secured this $13 million line of credit for our metal recycling project. With this additional capital we plan to become one of the largest providers of scrap metal to the steel industry in China. We look forward to the planned commencement of operations in the fourth quarter and to the completion of our roadmap to reach two million metric tons of annual capacity in the future."

Last week the company reported record second quarter financial results for the quarter ended June 30, 2009. According to the release, financial highlights included:

Revenue for the second quarter ended June 30, 2009 increased by 71.2% to $22.5 million compared to revenue of $13.01 million in the second quarter ended June 30, 2008. The increase in revenue was mainly attributable to increased sales from its metals distribution business in China as demand for metal ore rose significantly. Net income for the second quarter of 2009 was $3.37 million compared to $1.85 million in the second quarter of 2008. This increase was attributable to an improving pricing environment in metal ore in China coupled with the positive effects of China's November 2008 economic stimulus package. On a diluted basis, earnings per share for the second quarter of 2009 were $0.33 on 10.1 million common shares outstanding compared to $0.24 in the second quarter of 2008 on 2.5 million fewer shares.

The press release goes on to state, the strong overall performance for the first six months of 2009 was largely driven by significant growth in our metals distribution business leading to record sales of $27.9 million for the first six months of 2009 compared to $22.79 million for the same period in 2008. Gross Profit for the first six months of 2009 was $4.63 million compared to $2.1 million for the first 6 months of 2008 period and net income was $3.5 million compared to $2.5 million which included a one-time gain of $1.2 million from a contract termination. On a diluted basis, earnings per share for the first six months of 2008 were $0.34 on 10.1 million common shares outstanding as compared to $0.38 in the same period in 2008 on 2.5 million fewer shares.

At June 30, 2009, total assets were $38.13 million, an increase of over 30% from the $28.82 million at December 31, 2008. At June 30, 2009 total current assets reached $25.52 million and working capital was approximately $6.15 million. Shareholder equity reached $18.76 million with 10.1 million common shares outstanding up from $15.29 million at December 31, 2009.

The stock closed yesterday at $2.20 cents a share.

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United States Steel Corporation (NYSE: X) down 8.2% on 16.1 million shares traded. United States Steel Corporation is one of the leading steel company's in the U.S.

Alcoa (NYSE: AA) down 6.4% on 31.2 million shares traded. Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum, and alumina combined, through its active and growing participation in all major aspects of the industry.

GOLDCORP INC. (NYSE: GG) down 3.3% on 7.4 million shares traded. Goldcorp is North America's lowest-cost and fastest growing senior gold producer. Its gold production is located in safe jurisdictions in the Americas and remains 100% unhedged.

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