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SCOURING THE GLOBE FOR OVERLOOKED SMALL-CAP GEMSBruce B. Bee's dream stock features a high return on equity, solid earnings, strong cash flow, and a p-e ratio of 10. Sound impossible? Perhaps. Yet Bee keeps turning them up. The founder and chief investment officer of Bee & Associates, he searches the globe for mundane, often overlooked small-cap stocks that have a habit of catching fire once larger investors cotton to their potential. Over his firm's eight-year history, Bee's international portfolio has produced an impressive 27% annual return. He was up 4.6% more in the first quarter. Bee, who manages funds for institutions, as well as for individual investors at Trust Bank of Colorado and Britain's Coutts & Co. private bank, is upbeat about several manufacturers in East Asia. Among them is Hung Hing Printing Group, a Hong Kong manufacturer of corrugated packaging for consumer-goods producers in China. Hung Hing sports a stellar 30% return on equity and a rich 6% yield. But its p-e is barely 10. Another is Singapore's Electronic Resources Ltd., a distributor of Intel Corp. chips to mom-and-pop PC assemblers across Asia. Bee is also bottom-fishing in Thailand, where a stock market collapse has turned up bargains galore, including Thai Engine Manufacturing, a maker of agricultural equipment, and Thai Theparos Food Products, which produces sauces and seasonings. Neither has any foreign debt, and both could benefit if a currency devaluation that many analysts think is likely protects them from foreign competition. Bee is also a big fan of Europe. One favorite is Rinol, a German producer of floor coverings. Bee notes that Rinol is mopping up by outfitting clean rooms in German electronics makers' factories around the world. Although its shares have risen nearly 40% since the initial offering last year, he thinks further gains are in the cards. Bee has also tuned into P4 Radio Hele Norge, Norway's only national commercial radio station group. ''They just sit back and watch the cash flow,'' he says. It takes Bee a lot of spadework to find such unappreciated gems. But over the long haul, he maintains, they can be as lustrous as the brightest blue chip.
By William Glasgall in New York
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Updated June 15, 1997 by bwwebmaster
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