your number 1 stock pick for 2011, page-29

1. QTM
QTM produces solar water heating systems in China and sells in Australia and Asia. It also distributes medical equipment. Market cap is under $90 million. Quarterly results announced in October showed net operating cash flow of $13.4 million on sales of $28.65 million. Over the past year QTM has been negatively affected by withdrawal of Federal Government subsidy for solar water heaters (however subsidies are available in NSW, QLD and Victoria)) and legal dispute with Phillips regarding Distribution of medical equipment (settled earlier this year with a new commercial distribution agreement).
In 2009, QTM (which was trading between 30 and 40cents) made a profit of $30 million from a slightly lower rate of sales then this most recent quarter. Its now trading around 8 cents. Sales fell to a low of $9.9 million in the April quarter this year and have been recovering since (June Quarter $14.6 million; September quarter $28.65m). Clearly the settlement of the Phillips case and the restitution of subsidies for solar hot water systems, has put QTM back on the growth path. Based on reported sales revenue and cost of sales, QTM appears to be heading back towards an annual profit around $30 million, which based on current market cap would mean a P/E less then 3. Debt is relatively low around $15 million (having paid of one quarter of its debt last quarter through operating cash flow).
For the consumer electricity is getting much more expensive and cost of installing QTM solar hot water system can be recouped quickly and than significant savings made.
My biggest fears:
(i) I'm missing something
(ii) Management buyout. Majority of shares owned by company founders. At current multiples makes sense and pruchase at reasonable premium (even double current price, would be cheap and likely to be successful

2.GDO
(South Africa based mining) best gold buy on the ASX. Will produce around 80-90,000OZ this year at under $500 an OZ. Recently upgraded resources to over 20 million oz. Has finance under control. Further exploration potential. Market cap around 240 million. Price about to take of but hasn't yet.
Of 29 listed gold companies on the ASX, GDO has the second highest attributable resources (after NCM) at 20.4mozs. The next highest is less then half that. And GDO has almost 4 times the attributable resources of the combined KCN/DOM. And yet by market capitalisation, GDO is only ranked number 22.
At the moment because of the odour coming from problems of NKP, anything to do with South Africa is being marked down in price. But GDO, unlike NKP is already in production, has credible management and good relations with local community.