The company is AgFeed Industries (FEED), a Chinese pork-producing company that’s bringing advanced Western hog-raising techniques to China.

The background of the story is that 63% of the meat consumed in China is pork, amounting to about 63 pounds per person per year.  China harvested 625 million head of hogs last year.  (The U.S., despite my constant hunger for more bacon, consumed just 100 million head.)

AgFeed raises its pigs on two breeder farms, and has 31 producing farms.  Taken together, the hog producing side yielded 37% of last year’s revenues.

The other 63% of revenue came from the sale of the company’s premix, concentrate and complete hog feeds, which AgFeed markets through 1,400 retail stores to backyard farms, and 780 contracts with large commercial hog farms.

The quality of food is very important to Chinese consumers, and AgFeed considers its business plan to be a food safety story.  While efficiency increases are important—the company was founded by animal nutrition experts—it’s the production of high-quality, disease-free pork that can command a premium price that will make the difference in the company’s results in the long run. And management knows it.

FEED had a great four-month run in 2009 that rocketed the stock from penny status to within a few cents of 8.  But since that run, the stock has meandered its way down to below 3.  It’s not really an unappreciated stock (its P/E is still 15), but it needs to deliver better earnings than the 76% dip it reported in Q1.

The next quarterly report is scheduled for August 9, and a good report could provide the fuel for another blastoff.

And if the stock catches fire and begins to stage a strong rally, you might just read about it in Cabot China & Emerging Markets Report.

I’d rather invest in an industry that’s booming, an industry where the profit margins are high and the stocks are strong.

Today, the industry that best fills the bill is “cloud computing.”

Which is what, exactly?

Well, there is no “exactly.”  Cloud computing, in general, refers to the increasing migration of computing resources (hardware, software, data storage, computing power and expense) away from the user and toward a provider … who might be located all the way across the country.

Cloud computing thus minimizes upfront financial expenses for users, while maximizing computing capability.  Users typically pay using one of two models.  They can pay based on usage, as you do for your electricity service.  Or they can pay a set monthly or annual fee, as you do for your cable TV.

In some respects, the evolution of the computing industry is akin to that of the electric industry long ago.  Originally, electric power was consumed where it was generated.  Eventually, the build-out of the electric grid allowed the concentration of generating facilities as well as the distribution of consumption.

Now, how far this trend to cloud computing will go, no one knows.  Will all data be stored at big central locations eventually, or will we continue to control some locally?  All you need to know today is the trend is powerful, that numerous companies in the (admittedly roughly-delineated) industry are enjoying rapid growth of both revenues and earnings, and that many of their stocks are strong.

I’m keeping an eye on eight of them right now.

One provides “scale-out network-attached storage systems.”

One provides “application acceleration services.”

One manufactures “network storage and data management hardware.”

One provides products and services that “improve the accessibility of data over wide area networks.”

One provides “enterprise mobility software that enables secure access to data, voice and video applications over networks.”

One provides “on-demand customer relationship management software.”  Yes, it’s the famous Salesforce.com (CRM).

And one provides “virtualization software that enables organizations to run multiple operating systems on a single computer.”

Some of these I’ve written about before and some I’ll write about again.

But today I want to focus on Acme Packet (APKT), the market leader in the “session border controller” industry.  A session border controller is hardware and software that allows real-time communications across different IP networks, whether the content is voice, video or plain old data.  These networks might be wired, or they might be wireless.

The company also makes session-aware load balancers, multiservice security gateways and session routing proxies.

Obviously, there are not household items.  The biggest customers for this equipment are telecommunications companies, including Alcatel-Lucent and Nokia-Siemens.  But if you consider the growing amount of IP networks and traffic traveling on these IP networks, and the prospect that this growth can continue for a very long time, you’ll understand why revenues have grown every year since the company’s first sale in 2003, why they grew at an impressive 65% rate in the first quarter, and why analysts are now projecting that earnings will grow 94% for the full year!  Also, profit margins hit a very healthy 20.9% in the third quarter.  And that’s a profit margin the folks at Tesla can only dream about.

I wrote about Acme Packet here back on May 10, when it was trading at 26.  After that it pulled back to 24 several times, but it’s been generally trending higher, propelled by the buying of investors who are learning about its great growth potential.

If you bought it back then, congratulations.  I suggest you hang on tight.

If you didn’t buy, and you think you’d benefit from hearing the fuller story—as well as getting regular updates, so you know when to sell—I suggest you take a look at Cabot Top Ten Report, which first recommended the stock in March when it was trading at 17.

For more on Acme Packet and other top stocks, click here!

And this cult MAY have reached its peak on June 29, when the electric car company named Tesla Motors (TSLA) came public, raising $226 million from investors large and small who see great profit potential in the business.

I say MAY because there’s a POSSIBILITY that it will be years before this stock (TSLA) closes higher than it did on its very first day of trading.

And I say this because of three basic facts.

First, while every other automobile company on the planet has a market capitalization of LESS THAN one year’s revenues—they range from 33% of revenues for Ford to 59% of revenues for Honda—Tesla’s market capitalization is now more than $1.9 billion, which is more than 17 times revenues.  In other words, TSLA is 38 times as expensive as the average automotive stock.

Two, while the company has posted cumulative revenues of $148 million by selling 1,063 two-seat electric sports cars (currently priced at $109,000) to customers in 22 countries, it has yet to make a profit, and it has no proprietary technology that can prevent other companies from competing, especially in higher-volume lower-price mass markets.  In fact, it now looks like there will be a substantial time gap (and thus a revenue gap) between its two-seat Roadster and its four-door Model S (priced at $56,500)—promised for delivery in 2012; driving into this gap will be the Chevy Volt, the Nissan Leaf and others.

Three, and most important, the stock’s chart isn’t going up, which tells me that the public’s appetite for the stock has been satisfied for now.

Now, I hope I’m wrong.  I admire Tesla’s Roadster, impractical though it is for my lifestyle.  I’ve toyed with the idea of reserving a Model S.  And I do expect to see some Teslas on the road in the years ahead.

After all, there’s already serious money behind the company.  Elon Musk, the founder of PayPal, is a major investor as well as the company’s CEO; he’s in for about $75 million.  Also on board are Google co-founders Sergey Brin & Larry Page, former eBay President Jeff Skoll, Hyatt heir Nick Pritzker, Daimler AG, Abu Dhabi’s Aabar Investments, numerous venture capital firms, and the United States Department of Energy, with $465 million from its Advanced Technology Vehicles Manufacturing Loan Program.

Also, management’s decision to launch with a high-priced niche product—the same model used by the electronics industry—and then grow by driving costs down and targeting larger markets—has proven smart.  Hopefully, they’ll make many more smart choices in the years to come.

But it’s important to remember that the stock is not the company.  Even if the company does well, the stock may not.

The ideal investment, in my book, is an unheralded company whose products are in increasing demand, whose profit margins are large, and whose public perception grows as its business succeeds.

The risks of investing in Tesla today are that the company is already well-known, and well-thought-of, thanks to its A-list connections, and that increasing competition may make the road ahead bumpier than anticipated.

If I had to invest in a car company, I’d invest in the one with the strongest chart.  That’s Ford (F), which broke out to recent highs on Thursday and Friday after a great earnings report and is the cheapest of the bunch.

Thus, if you are going to be doing a little nibbling on stocks here and there (and I don’t think there’s much wrong with that, assuming you have plenty of cash on the sideline), you have two choices.  First, you wait for a company to report earnings, and then look to buy afterward if the chart and story are still intact following the report.

Or you can look for strong, enticing growth stocks that aren’t set to report results for another few weeks, to give the new position time to develop a profit cushion for you before the quarterly report is out.

One stock that fills that bill is Finisar (FNSR), which has shown up in Cabot Top Ten Weekly a few times this year, including a couple of times recently.  It’s a story right out of 1999, as the company is the world’s largest supplier of optical gear for telecom equipment.  And that means the company is riding the boom in bandwidth demand, which stems from the flood of data and video now traveling over telecom networks thanks to myriad smartphones and other wireless devices.

Verizon is pouring billions of dollars into its 4G network, and other providers like AT&T aren’t far behind.  The new iPhone 4 (despite its well-publicized issues), the iPad and the popularity of Android phones should accelerate the need for faster networks, and Finisar’s equipment is a big part of that.  I could get into more details, but honestly, that’s the ruling reason—more bandwidth means more demand for Finisar’s equipment.

As for business, it slipped a bit during the recession, but not tremendously (sales growth was down 11%, up 12% and down 1% during the final three quarters of 2009).  And now it’s really ramping up—sales rose 33% and 76% the past two quarters, and estimates call for 56% and 41% the next two quarters.  Earnings, by the way, have ramped up from three cents to 11 cents to 17 cents to 22 cents per share during the past four quarters.

The stock itself notched an impressive 10 weeks up in a row during February, March and early April before settling into its current choppy consolidation.  The good news is that shares haven’t budged much despite the market’s correction—FNSR has actually hit a series of higher lows since early May, and is now within range of breaking out above 16.6.  A strong-volume move above that level would be bullish.

And, as mentioned above, earnings aren’t out until September (its quarter doesn’t end until July 31), so buying a little here or on a decisive breakout has a good shot at working out.  Just remember to keep positions small until the market enters a new, definitive uptrend!

For more details on Finisar and other top stocks featured in Cabot Top Ten Weekly, click here.

The rest of the newswire item goes on to quote from unnamed Saudi oil sources that the king didn’t mean a halt to exploration, but that he simply wanted the country to be more judicious in its exploration. Other sources chimed in that Saudi Arabia is committed to its role of ensuring the world has enough oil to meet its needs. In other words, everyone was spinning the king’s statement.

When I covered the oil market as a beat reporter for Dow Jones in the late 1990s and into the start of the last decade, the delicate dance of OPEC and Saudi Arabia regarding the image of oil availability became clear to me.

The cartel wants strong oil prices, obviously, but not too strong lest high prices encourage consuming nations to pursue alternative energies, as they did during the oil shocks of the 1970s. It also wants to assure consuming nations that there is no need to worry about the supply of oil for the foreseeable future, since the fear of running out of cheap oil could force people to turn to alternatives before the cartel are able to sell all the oil they can at a good price.

To my mind, hinting at any other condition, as King Abdullah’s order does, strikes me as a significant departure from the narrative of reasonably priced, easily available, limitless oil the Saudis have used to make themselves very, very rich. The departure from the successful script OPEC has followed is a remarkable signal of change to me, one that to my mind indicates peak oil is here – there is only so much oil left, and the Saudis want to sell it when the oil crunch becomes apparent again.

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Peak oil is the theory that at some point, the world will have used more oil than there is recoverable in the ground, causing big problems for both the cost of oil and long-term energy stability. I didn’t put much credence in peak oil until a curious discussion I had at a conference in Thailand in 2006 with a high-level Brunei government official who expounded at length on the importance of getting the country’s economy diversified away from oil in the following years although, as he took pains to assure me, there was no problem with oil supplies at all.

Why pursue the more labor intensive and weaker return-on-investment of eco-tourism, for instance, when oil has made your country the wealthiest on the planet? Unless, of course, the oil is running out.

I’m not the only one who thinks peak oil is here, or at least just around the corner. Just last Sunday, Lloyd’s Insurance and the Royal Institute of International Affairs warned the British government the world is headed straight into the peak oil crunch once the economy recovers and with it, demand. By 2013, oil could easily be over $200 a barrel, they warn.

The International Energy Agency, noting that the world needs to find the equivalent of four Saudi Arabias in the next 20 years to even hope to sustain current oil demand, has all but said peak oil is upon us (and, anonymously to the press, some individual analysts at the IEA have said so). As I have noted in prior columns, discoveries of vast new oil deposits are unlikely: Since 1968, the world has been using more oil annually than it has been discovering.

Even setting aside peak oil—and my gut here could be wrong, I admit—there is enough upward pressure on prices to indicate that right now is probably the lowest priced gasoline we’ll see from now on. Why?

Consider this: About 10 years ago, OPEC sources indicated Saudi Arabia needed to sell a barrel of oil at $18 to break even. Two years ago, data from ratings agency Fitch (which cares because it evaluates sovereign debt) estimated Saudi Arabia’s breakeven had risen to $26. In January, Fitch pegged breakeven for the country at $68 a barrel. If it costs more to produce oil, it clearly is harder to get. And Saudi Arabia is the primary low-cost oil producer on the planet.

OPEC members like Venezuela and Iran are estimated to need oil over $95 to break even on their costs. Other OPEC members are even dropping out: Indonesia abandoned the organization in 2008 because it can no longer export oil—it needs to import it to meet its own growing domestic demand. Our only respite from skyrocketing oil prices right now appears to be the slumping global economy, which has eased demand downward so we (and most of the government and most business leaders) don’t see the problem at the gas pump or in utility bills. But we will, soon.

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So how does an investor act on the belief that peak oil is imminent? The temptation could be to buy oil stocks, but that overlooks one crucial characteristic of the stock market: It is forward looking and puts a premium on the price of stocks in expectation of future growth. And if the market believes there isn’t much of a future for oil companies in the business they are best at—even if prices are currently high—then why should their shares enjoy large price to earnings multiples? They won’t.

The way to play the coming energy crunch is to invest in the companies that have the products that will replace oil in the energy network. As Editor of Cabot Green Investor, I see dozens if not hundreds of promising technologies and advances that will not only alleviate the stresses of peak oil but also improve our environment and the quality of our air and seas. Today, I want to discuss the opportunity I see in one specific sector of Green: solar.

If you follow the market closely, you likely recall the fantastic year solar stocks had in 2007: Nearly every solar-related stock posted triple-digit gains that year, with the best performers, First Solar (FSLR) and Ascent Solar (ASTI), posting eye-popping 750% gains. The downside is the whole sector has suffered from a significant hangover since then as profit taking and then the 2008 financial crisis forced shares lower.

Even industry leaders have plunged, like silicon wafer provider MEMC Electronic Materials, which has fallen to around $10 from a 2007 high of $90, and First Solar, which held up well through much of 2008 until it too succumbed to the bear market. It has fallen 50% from 2008’s peak. But as we see in nearly every market and sector sell-down, the bears have overdone it. Solar are now priced at bargain-basement value-stock levels, in some cases their companies valued like businesses in decline rather than great growth companies of the future.

A simple screen of the leading solar panel and wafer stocks trading on U.S. exchanges shows solar stocks are trading at the lowest multiples they ever have. The price to current fiscal year earnings for the 12 leading solar stocks is 11. Right now the S&P 500 is trading at a price-to-earnings of 20. In fact, the basket of leading solar stocks is trading at a lower valuation than the utilities sector (which has a P/E of 13), conglomerates (18), basic materials (20) and every other sector of the market through financials (P/E of 99).

That makes sense if you expect, say Con Ed, Duke Energy, Calpine and every other regulated utility to grow faster than solar revenues, but they won’t. At best, utilities could likely grow close to 10% a year, but will likely end up growing closer to 6 to 8% annually. Solar, meanwhile is projected to triple by 2019, to a $99 billion industry, according to Clean Edge, an alternative energy researcher.

Even with the market’s volatility of late, Cabot Green Investors have started accumulating some solar here to take what we see as an unusual period of low prices in shares in such a fast-growth sector. If there truly is an oil price crunch, I’d expect that growth rate to expand even faster as the West and the developing world flock to alternative energies.