Biostime is a leader in pediatric nutrition and baby care products in China with a focus on the high-end segment. Their products include infant formula, probiotic supplements; nutrition supplements and dried baby food sold under the brand Biostime as well as quality baby care products marketed under the BMcare brand. Their sales channels include : 10 404 baby specialty stores, 744 member zones in Pharmacies, and 4174 general retail stores.

The main competitive advantage of Biostime is their Mama100 membership program, which offers customer service, information sharing, magazine, web portal and points accumulation. This allows the company to get high quality data from customers and market their products directly with high efficiency. Active members of Mama100 contribute 85% of revenue (!), their numbers have grown to almost 1.5 million now from 820 000 in 2011. It means they have a huge retention rate and customer satisfaction. The majority of sales comes from infant formulas (around 80%), where they gained a no. 1 position with a 44% market share (supreme tier) and a 7.4% share in the higher tier (Mead Johnson being the leader here with 14% share). They are a recognized leader in the child probiotic market with a 85% share in terms of retail sales, although this segment represents only 11% of total group revenues.

There have been several scandals concerning the infant formula market, including the 2008 Melamine scandal (Biostime was unscathed, because it imports it's raw materials from Denmark and France) and 2013 price fixing fines. The companies involved have been working hard to restore their reputation, despite the government's regulations regarding marketing materials and cooperation with hospitals. Biostime was one of the companies implicated in price-fixing, paying 27 million USD in fines, other companies on the list include Danone, Mead Johnson, Fonterra and Abbott Laboratories. As a result of the investigation most companies lowered their prices in a range of 5-15%, impacting their financial results. The largest Japanese dairy producer Meiji has already announced withdrawal from the Chinese market, which is projected to double from the current 12.5 billion USD in the next 4 years.

I believe in the long-term potential of this stock, their sales have more than tripled in the past 3 years, and the Mama100 program offers a sustainable competitive advantage and acts as a direct channel for any future products. On top of it, the infant formula industry in China is booming, and the company's brand is very well recognized on the market. I'm adding this to my portfolio as it's one of the best Chinese stocks to buy right now.

Pegasystems Inc. is a software developer founded in 1983 in Cambridge, Massachussets. The company's products help automate business processes primarily in the United States, the United Kingdom, and rest of Europe. It is a recognized BPM (business process management) leader by Gartner and Forrester, also acclaimed for their CRM and predictive analytics software. Their customers include 8 of the top 10 global banks, 7 of the top 10 insurance companies, 6 of the top 10 global communications services providers, 8 of the top 10 credit card issuers, 12 of the 14 largest healthcare payers. 

The patented Build for Change technology offers a comprehensive solution and a unified platform, which allows to build enterprise applications in a fraction of the time it would take using the disjointed architectures offered by their competitors. They maintain alliances with global systems integrators and technology consulting firms like Accenture, Cognizant or Wipro. The flagship product, PegaRules Process Commander can be used for applications ranging from managing health insurance claims to the management of fuelling, maintenance and restocking of aircraft. It’s considered the Rolls Royce among BPM, very pricey but the company invests significant amounts of money (76 mil. USD in 2012, 16% of revenue) to keep it at the top of the industry. 

Like with every software in a big company, once their customer installs the product, it is very hard for them to move to competitors. They grew revenues by 20% in the recent quarter, but 12% for the first nine months compared to last year. The estimated 5-year growth rate is 25%, the stock is trading at a forward P/E of 30 and P/S of 3.6. The company was founded by Alan Trefler, who still holds a majority of it's stock. He said the whole BPM technology is in a very young stage and he would rather "eat sand" than sell it.

A new addition to my portfolio and the Best stocks list: Medicines Company is a global biopharmaceutical company, with have four marketed products, Angiomax® (bivalirudin), Recothrom® Thrombin, topical (Recombinant), Cleviprex ® (clevidipine butyrate). They also have a pipeline of acute and intensive care hospital products in development, including four late-stage development product candidates, cangrelor, oritavancin, MDCO-157 and IONSYS TM (fentanyl iontophoretic transdermal system), and early stage development product candidates, MDCO-216 and ALN-PCS02 and ALN-PCSsc of our ALN-PCS program. 

The vast majority of their sales comes from Angiomax, however their other products are growing at a faster pace, with 4 more launching in the next 12-24 months. In the latest quarterly results, net revenues grew by 27% to 174.3 million USD, and adjusted net income 100% to 29.3 million USD. The growth is expected around 30% CAGR, which is quite in line with a 32 forward P/E. The patent for Angiomax will expire in 2019, however it's growth and the pipeline of new drugs should be more than sufficient for the future.

The main reason for selling these positions is the insufficient cash in my portfolio, because I am purchasing two new stocks today. It's always a very tough decision to sell a stock, especially if you held it a longer time and it delivered great returns. And it gets even tougher, if you are trying to replace a great stock with an even better one. Maximus is a good investment, but others are too, in fact I think they are the best stocks to buy right now. But the technicals are not very favorable for MMS, the uptrend is not  broken yet, but as someone once said, you have to get out while the getting is good. I have sizeable positions in AMBA, KORS and UTHR, so I'm reducing them a bit and buying 2 new growth stocks with high upside potential.

1. Ajanta Pharma Ltd. (532331)
Ajanta Pharma is an Indian multinational, developing and selling pharmaceuticals worldwide, with its head quarter in Mumbai. The company was established in 1973. Their main presence is in the specialty therapeutic segments of Cardiovascular, dermatology, ophthalmology and musculoskeletal. The majority (65%) of their revenues come from Asia, Africa and Latin America. The company has successfully  gone through US FDA inspection, and started operations in the USA in the first quarter of 2013. With a portfolio of 18 ANDAs the US market could be their key growth driver in coming years. The company was one of the earliest entrants in the pharmaceutical sector, as such many of it’s products are market leaders and their brand is recognized very well in India. I am bullish on the whole pharma sector in India, it's estimated CAGR until 2016 is 14-17%, these companies are famous for reverse engineering many drugs and coming up with their cheaper versions. Despite the run up in it's stock price, the current P/E remains at 23, while growth has accelerated to 39%, so it still remains one of the best Indian stocks for the long run. The historical fundamentals are very impressive: for the past five years their CAGR sales, EPS growth and ROE has been 24%, 44% and 25% respectively. Since June, several insiders have bought stock in the company. Fundamentals

2. Aurobindo Pharma Ltd. ( 524804)
A well integrated pharma company, Aurobindo Pharma exports to over 125 countries across the globe with more than 70% of its revenues derived out of international operations. With multiple facilities approved by leading regulatory agencies such as USFDA, EU GMP, UK MHRA, South Africa-MCC, Health Canada and Brazil ANVISA, Aurobindo makes use of in-house R&D for rapid filing of patents, Drug Master Files (DMFs), Abbreviated New Drug Applications (ANDAs) and formulation dossiers across the world. Aurobindo Pharma is among the largest filers of DMFs and ANDAs from India.
The company aims to achieve USD 2 billion revenues by 2015-16 (currently nearing 1 billion USD). The fundamental story is very similar to Ajanta, valuation is very low, P/S of 1.3 and P/E 18 given 20% growth rates is a good opportunity. Fundamentals

3. eClerx (532927)
eClerx is an Indian KPO (knowledge process outsourcing company) based in Mumbai. The company provides middle/back office operations support to over 30 Fortune 500 companies including 8 of the top 10 investment banks. Through their five delivery centers across India, they support a diverse global client base, including the world’s leading Financial Services, Broadband, Cable & Telco, eCommerce & Retail, High Tech, Industrial Manufacturing & Distribution, Software, Media & Entertainment and Travel companies. The company was founded by Anjan Malik and PD Mundhra, who graduated from the University of Pennsylvania, Wharton School of Business, who rejoined after successful careers in investment banking. They identified significant opportunity in the outsourcing marketplace for a “virtual” outsourced services model for large global organizations going through rapid business and technology transformation but finding continued scalability and quality challenges with their in-house teams. Founders still hold a majority interest in the company. Growing both organically and through acquisitions (acquired UK based Agilyst in 2012 to get into Cable & Telco business), the company is debt-free, with a ROE of 40% and compounded annual growth rate of sales and earnings near 30%. Fundamentals 

4. Hatsun Agro Products (531531)
Hatsun Agro Products is the largest private sector dairy company in India based in Chennai. It was founded by R.G. Chandramogan in the year 1986. Milk from Select Fine Quality cows is collected from over 300 000 farmers, chosen with care in 8500 villages. The Company’s dairy products include dairy whitener, skimmed milk powder, butter, cooking butter, milk. The Company also produces and markets the very popular Arokya Milk and Arun Icecreams, which won the Best Icecream in the Country contest. The public float of the stock is very small, around 20%, the founder still controls the company (and he does a good job!), there have been also some insider purchases in June 2013. Their stock is selling for a P/S ratio of only 0.85, P/E 27 but spots a growth rate of 35%. Some Indian stocks seem to be selling at very low multiples, if this company was listed in the US, it's market cap would be at least double the current one. The only concern is a higher debt load of 300 Rs. Cr., however the cash from operations (142 Rs. Cr.) is more than sufficient to pay it down in time. Fundamentals

BTG reported results on November 12th, 2013 for the six months ending September 30th. Underlying revenues rose 17% to 153 mil. GBP, however after adjusting for non-recurring revenue last year, the growth was close to 28%. It is also the first reporting period that included the acquired products EKOS and TheraSphere in July 2013, which generated revenues of 13.3 million GBP. The company raised guidance for it's flagship drug Varisolve, which is expected to generate more than 500 million USD (close to 300 mil. GPB) revenue in the future. The company is awaiting approval on 4th of December, after which it could start selling it in the first half of 2014. The drug approval is expected by markets, however their revenue could easily double in the next few years, and I think Mr. Market is not realizing the full potential of this company. I keep holding it, as it's still one of the best stocks to buy right now and their results have just proven my bullish analysis. Financials and Fundamentals

I have added the performance of all my portfolios since November 2nd 2013, and the respective weights of stocks in them. The charts and tables will be updated every time I make a new trade, to make things transparent. Anyone can now track my ideas and follow the stocks that I buy. 

My focus is strictly on the best stocks with highest upside potential right now. I use various criteria for picking, utilizing both fundamental and technical analysis. Every purchase that I make comes with a stop loss, however I monitor every stock and might sell it much sooner than it reaches the order price. This might be because it either reached my estimated profit or I no longer see potential in the stock. Selling is a very tricky and I consider it the hardest part of trading. I believe in concentrating my portfolio into the best stocks and watching them closely. My goal is to outperform market averages (of course, why else would I trade?) over a longer time horizon with a reasonable degree of risk. 

I trade the US, UK and Hong Kong Markets, because my strategy is quite universal and can be applied on many other markets. I also believe that developed countries have entered an era of deleveraging, which will depress their real GDP growth rates and take many years to solve. Adding Chinese stocks gives me an exposure to different companies and regions, which in my opinion offer great returns in the near future. 

The third-quarter gaming revenue grew by 11.4 percent to HK$21.06 billion (US$2.72 billion), while EBITDA 8% to HK$2.04 billion. Profit increased by 10.3 percent to HK$1.8 billion. Results are ok, but the trouble comes from market share, which declined to 24.3% from 26% a year ago. That means competitors are growing at a faster pace, not a good sign. I will be watching the stock for possible selling opportunity. The long-term fundamentals are still sound, but if Mr. Market starts beating down the stock, I want to be out!

1. Ambarella Inc (AMBA)
Ambarella is a leading developer of low-power, high-definition video compression and image processing semiconductors. Their products are used in high definition (HD) cameras including security IP-cameras, wearable sports cameras, digital still cameras, and automotive video recorders. Ambarella technology is also used in television broadcasting infrastructure systems. The advancements in display technology have caused a tremendous growth in video content worldwide, estimated to have an average CAGR of 90% for 2011-2016. Their main competitive strength is high performance and low power and storage requirements, 75% of their workforce is in R&D. The company has a net cash position of 120 million, I have estimated their forward P/E at 15 with a growth rate near 20%. Financials and Fundamentals

2. Celgene (CELG)
Celgene Corporation discovers, develops, and commercializes therapies for cancer and immune-inflammatory related diseases in the United States and Europe. It's flagship drugs are Thalomid, Revlimid, Abraxane, Vidaza. Celgene is a leader in it's field, with many more products on the way. The company announced Q3 results recently, beating analyst estimates on revenue but coming short of EPS expectations and slightly increasing their yearly outlook. Insiders have been  heavy buyers of the stock in the past 2 years. Financials and Fundamentals

3. Interactive Intelligence (ININ)
Interactive Intelligence Group, Inc. provides contact center and business communications solutions. It offers Interactive Intelligence Customer Interaction Center (CIC), a solution for voice, data, and process automation. The company provides its solutions for use in teleservices, insurance, banking, accounts receivable management, utilities, healthcare, retail, technology, government, and business services industries in the Americas, Europe, the Middle East and Africa, and the Asia-Pacific. They are widely recognized as a leader in contact center solutions. See below for my previous article written on ININ. Financials and Fundamentals

4. Michael Kors Holdings Ltd (KORS)
Michael Kors Holdings Limited engages in the design, marketing, distribution, and retailing of branded women’s apparel and accessories, and men’s apparel. The company operates in three segments: Retail, Wholesale, and Licensing. As of March 30, 2013, it had 231 retail stores, including concessions in North America; and 73 international retail stores, including concessions in Europe and Japan.  The company reported a 49 per cent jump in net income in Q£, beating Wall Street forecasts. Also, It now expects earning per share of $2.77 to $2.81 on revenue of $2.9bn to $3bn. It had previously raised its guidance in August, then expecting per-share earnings of $2.67 to $2.69 on comparable revenue. The brand has gained incredible momentum in the past couple of years, outgrowing many of it's rivals. There is still considerable potential, given that North America represents nearly 80% of sales, while they are gaining foothold in Asia and Europe, world's premier luxury goods markets. Despite it's high valuation, I still see a big profit potential in the stock, and I am not alone. Top investors like Mario Gabelli, Steve Mandel and Andreas Halvorsen hold it too. Financials and Fundamentals

5. Maximus Inc (MMS)
MAXIMUS, Inc. provides business process services to various government health and human services agencies in the United States, Australia, Canada, Saudi Arabia, and the United Kingdom. It's expertise lies in administering government-sponsored programs, such as Medicaid, the Children’s Health Insurance Program (CHIP), health care reform, welfare-to-work, Medicare, child support enforcement, and other government programs. The company is a leading administrator of Medicaid and CHIP services in the United States, the premier provider of workforce-centered services in the United States, Australia, the United Kingdom and Saudi Arabia. A pioneer of welfare reform, placing approximately 500,000 individuals into unsubsidized employment. Their main markets are exactly countries, which will in my opinion undergo significant budget restructurings and social program reforms. Maximus is in the perfect spot to profit from these trends.
Financials and Fundamentals 

6. Ulta Salon Cosmetics and Fragrance Inc
The company operates specialty retail stores in the United States. Its stores offer over 20 000 3rd party as well as private branded cosmetics, fragrance, haircare, and skincare products, as well as related accessories and services.
As of August 3, 2013 the Company operates 609 retail stores across 46 states and also distributes its products through their web. The competitive strength is apparent, it is the largest cosmetic chain in the US, offering the most comprehensive service to it's customers. Cosmetics is a high margin and stable business, and they have clearly a dominant position. Their latest results showed 25% sales growth, increased gross margins to 35.3% and it's loyalty program expanding at a 19% to a record 12 million members. Financials and Fundamentals 

7. United Therapeutics Corporation (UTHR)United Therapeutics Corporation is a biotechnology company focused on the development and commercialization of drugs fighting cardiovascular, infectious diseases and cancer. The lead product, Remodulin, is approved in the U.S. and various countries around the world for both continuous subcutaneous and continuous intravenous infusion for the treatment of pulmonary arterial hypertension (PAH). In addition to Remodulin, the company has 8 products in it's pipeline in various stages of trials. There are very low expectations regarding their future, the stock is trading at a forward P/E of only 13. Yet my analysis indicates, they will be able to grow at least 15-20% in the near future, as was demonstrated in their last quarterly results. The biggest surprise was the growth for drug Tyvaso, which reached sales of 120 million USD (up 36% YoY). High growth/Low P/E stocks are very rare, the markets seem to underappreciate this company and it's management. I believe they will continue to grow at this pace in the future, once wall street recognizes that, both it's price and earnings multiples will expand at a rapid pace. 

1. Advanced Medical Solutions Group PLC (AMS.L)
AMS specialises in the development, manufacture and sale of advanced wound care, wound closure and sealant products. The company makes money through it's branded products LiquiBand, ActivHeal and Resorba, with around 80% of sales from Europe (mainly UK and Germany). The group more than doubled it's revenue in the past 3 years while margins have improved from 17% in 2009 to 24% last year. Debt load has been reduced to a mediocre 5 million. They are currently in talks with regulatory authorities in Russia, China and USA, to start selling Resorba products. Financials and Fundamentals

2. Associated British Foods PLC (ABF.L)
Associated British Foods is a diversified international food, ingredients and retail group operating in 47 countries. It is the owner of several famous brand names including Twinings tea, Ovaltine, Primark and British Sugar. AB Sugar is one of the world’s largest sugar producers; employing more than 42,000 people across 31 plants in ten countries and with a capacity to produce over 5 million tonnes of sugar and 600 million litres of ethanol each year. Despite it's size, the company kept growing even during the global crisis in 2008 and is positioned well to profit from the future. The founding Weston family still holds a significant interest. Financials and Fundamentals

3. Blinkx (BLNX.L)
Blinkx is the Internet Media platform powered by CORE, the world’s most advanced video search engine. They link viewers with content publishers and distributors, and monetize those interactions through advertising. Founded in 2004 in San Francisco, the company was floated on London Stock Exchange in 2007. I have already written an article about this stock, so I'm not going into greater detail. This is one of those situations, where the fundamentals and technicals are well aligned and warrant a very aggressive position. If your analysis points to a great profit potential, you have to bet big. Financials and Fundamentals

4. BTG PLC (BTG.L)
BTG plc is an international specialist healthcare company. The Company is focused on three business areas: Specialty Pharmaceuticals, Interventional Medicine and Licensing & Biotechnology. The Specialty Pharmaceutical products include antidotes against snake venom and toxicity associated with medicines used for heart conditions and cancer. The Interventional Medicines include Interventional Oncology products used to treat patients with liver tumours and Interventional Vascular products used to treat patients with severe blood clots. The company is currently awaiting approval and launch of a treatment for varicose veins in the US. They have invented Magnetic Resonance Imaging and currently license a large part of the world. The expected is growth for next year is around 20%, and there has also been an insider purchase recently. 
Financials and Fundamentals

5. Hargreaves Lansdown (HL.L)
Hargreaves Lansdown PLC is a provider of investment management products and services to private investors in the United Kingdom. The Company's flagship service, Vantage, UK's largest direct-to-private investor investment supermarket and wrap platform. Vantage offers clients the administrative convenience of being able to hold and manage their investments, including unit trusts, open ended investment company, equities, bonds, investment trusts and cash, irrespective of the tax vehicle, in one place with consolidated valuation reports. The company spots 80% ROE, 50% profit margin and a double digit growth rate. I really like that the founders still hold a majority share in HL, they have demonstrated exceptional skill and they remain one of the best UK financial companies.
Financials and Fundamentals

6. Hutchison China MediTech (HCM.L)
Chi-Med is the holding company of a pharmaceutical and healthcare group based primarily in China. Chi-Med is a subsidiary of Hutchison Whampoa Ltd. ("HWL"), one of the largest conglomerates based in Hong Kong. Chi-Med focuses on researching, developing, manufacturing and selling pharmaceuticals, and health oriented consumer products primarily in China. Chi-Med was established in 2000 as a wholly-owned subsidiary of HWL. It's global licensing deal with AstraZeneca on Volitinib, represents the first deal of this type to progress a China discovered targeted oncology drug towards the global market. The company earned a $20 million upfront payment with up to $120 million contingent upon the successful achievement of clinical development and later double-digit percentage royalties on net sales. The company has 5 additional drugs in development, they have turned profitable only recently and finally started generating free cash flow. A director has bought shares in October with trade value of £100k. The pharmaceutical industry in China is booming, the country represents 20% of world population but only 1.5% of the total drug market. I believe that if the company executes it's strategy well, it will offer incredible profit potential in the future. Financials and Fundamentals

1. Changshouhua Food Co Ltd (1006.HK)
Changshouhua Food is engaged in the manufacturing and sale of edible corn oil products under it's leading brand Longevity Flower in China consumer market, and domestic or export bulk sales mainly to other companies engaged in the sale of edible corn oil under their own brands. The company has a distribution network of more than 450 wholesale distributors, 70 retailers covering 31 provinces or administrative municipalities in China. On May 25, 2012, the Company changed its name from China Corn Oil Company Limited to Changshouhua Food Company Limited. 
Click here for Financials and Fundamentals

2. Haier Electronics Group Co Ltd (1169.HK)
Haier Electronics Group , is a global leader in home appliances, with a world market share in white goods near 8%. The company manufactures air conditioners, washing mashines, cell phones, computers and others. It is the only company in the world to manufacture front load, top load and agitator washing machines. With a P/E of 18 and estimated growth of 20%, the company remains reasonably priced.
(1169.HK)
Click here for Financials and Fundamentals

3. SJM Holdings Ltd (880.HK)
One of the six companies authorised to operate casino games of fortune and other games of chance in casinos, under the terms of a concession granted by the government of the Macau Special Administrative Region. SJM Holdings is the only gaming company with its roots in Macau, and is the largest in terms of gaming revenue and number of casinos. SJM's casinos are located in prime locations on the Macau Peninsula and Taipa Island. Gaming operations are comprised of VIP table gaming, Mass Market table gaming and slot machines. Their long-term relationships with players and officials give them a sustainable competitive advantage, which has led to a market share above 30%.
Click here for Financials and Fundamentals

4. Sun Art Retail Group Ltd (6808.HK)
Sun Art Retail Group Limited is an investment holding company mainly engaged in the operation of hypermarkets in the People's Republic of China. It operates according to international standards under two brands: the Auchan and RT-Mart. Of the new stores, 14 were located in Eastern China, seven in Northern China, 10 in Central China, four in North-Eastern China, eight in Southern China and three in Western China, while nine were operated in self-owned properties and 37 were operated in leased properties. The Company has now more than 230 hypermarket complexes and an estimated 13.6% market share in China. 
Click here for Financials and Fundamentals

5. Sunley Holdings Ltd (1240.HK)
Sunley is principally engaged in the foundation business and machinery leasing business in Hong Kong and Macau. The company works for both private and public sectors, participating in building and infrastructure projects. The business requires specialist knowledge and substantial initial and continual capital expenditures for setting up and maintaining the specialised machinery, thus creating a barrier to entry in their respective industry. Their competitive strenghts lie mainly in the experienced management and engineering design team. As Hong Kong real estate prices have long surpassed pre-crisis levels, the company has grown revenues and earnings almost five-fold in the past 3 years.Click here for Financials and Fundamentals

Blinkx is the Internet Media platform powered by CORE, the world’s most advanced video search engine. They link viewers with content publishers and distributors, and monetize those interactions through advertising. Founded in 2004 in San Francisco, the company was floated on London Stock Exchange in 2007. Through its flagship site, blinkx.com, blinkx pioneered video search on the Internet, developing an engine based on technology that was conceived at Cambridge University, protected by 111 patents. Today, blinkx has an index of over 35 million hours of searchable video and more than 900 media partnerships, including national broadcasters, commercial media giants, and private video libraries. In addition, blinkx powers video search for many of the world's most frequented sites, including AOL and Lycos. 

The company makes money through advertising on videos featured on their website. Their advertisements are unique because of the technology they use. Advertisers can pick many options of display like Branded player, Overlay, Fixed footer, Video Float and others, while each of those interacts with the viewer in a different way. They have already partnered with Samsung and Sony to feature advertisements on certain HD videos on their TVs (Connected TV). 

Blinkx browses through millions of videos, categorizes and indexes them, replacing the manual process of tagging. The way it works is that blinkx CORE first divides video into its basic building blocks and then processes each component in the method most effective to the medium: audio is processed with speech recognition technology; images are understood using visual analysis technology; and metatags are indexed and extracted by visual spiders. Once it has collected the most comprehensive data about the video, the CORE engine transforms it into useful information by recognizing ideas and themes within the video. The result is an unprecedented accuracy of the search results and ensures best experience for both viewers and advertisers or content publishers.

The company has grown revenues by an astounding pace,  from 40 million to 200 million GBP in the last three years, growing at 73% in the past year alone. Blinkx is debt free, with 90 million in current assets and a market cap of almost 750 million. Recently, they announced Q3 results, easily beating estimates. Our projected upside for the stock is near 150% for the next year. The company has currently only a fraction of videos in it's database, there is significant room for additional growth, given the number of videos posted daily and it's competitive advantage. Financials and Fundamentals

Interactive Intelligence Group, Inc. provides contact center and business communications solutions. It offers Interactive Intelligence Customer Interaction Center (CIC), a solution for voice, data, and process automation. The company provides its solutions for use in teleservices, insurance, banking, accounts receivable management, utilities, healthcare, retail, technology, government, and business services industries in the Americas, Europe, the Middle East and Africa, and the Asia-Pacific. Interactive Intelligence Group, Inc. was founded in 1994 and is headquartered in Indianapolis, Indiana.

ININ is recognized by institutions like Gartner and Datamonitor as a market leader in contact center solutions. They have averaged double-digit growth in the past five years with no long-term debt. Earnings in Q3 beat estimates by a wide margin, management has also increased guidance for full-year order growth.  Total orders increased by 47 percent from the third quarter of 2012, with cloud-based orders up 75 percent to comprise 48 percent of total orders. Revenues increased by 32 percent over the third quarter of 2012. Recurring revenues, which include support fees from on-premises license agreements and fees from cloud-based solutions, increased 29 percent to $37.5 million and accounted for 48 percent of total revenues.

We believe the company has an experienced management team, which will continue to deliver great results in the future. The very high P/E ratio offers misleading valuation, as margins are depressed because of high maarketing and R&D investments. We estimate a normalised forward P/E of 40 for 2014. Based on our calculations, ININ offers at least 50% upside from current prices and qualifies for one of the best stocks to buy right now. More information

We recommend taking profits in SPSC after the recent correction. The company remains fundamentally sound, however the technical outlook is unfavorable. We might reenter the position if the trend resumes, as it still offers significant upside potential. $SPSC is no longer one of the best stocks to buy now. More info