It sure took awhile, but it looks like FSNM is finally breaking out!

Keep an eye on it in the coming months, but don't forget to actually make money you will have to sell at some point.

Congratuations to those who hung in there!

First State Bancorp. is a New Mexico based commercial bank holding company. First State provides services, through its subsidiary First Community Bank, to customers from a total of 40 branches located in New Mexico and Arizona.

It appears this company is grossly undervalued. Trading at a market cap of only $12 million, the company has $165 million in cash and cash equivalents. Furthermore, FSNM has a book value of $3.76 even though shares are trading at only $0.56!

One analyst is currently following the stock with a "Moderate Buy" rating. Insiders hold 4.14% of the shares while institutions hold 35.30%. Holding $2.89 billion in assets, the company currently has $2.81 billion in liabilities.

The bank is undercapitalized, however, and net loss has widened. While this certainly warrants concern, the stock is trading for virtually nothing and management believes the worst is behind them. Overall, this company is certainly "One to Watch".

Five Star Quality Care, Inc. (AMEX: FVE) is a national healthcare and senior living services provider with more than 21,000 employees in 230 locations nationwide. There is much opportunity for the company to grow as the aging U.S. population increases demand for independent living properties, assisted living communities, skilled nursing facilities, pharmacies and rehabilitation services.

With more than a billion in annual revenues, the company trades at a market cap of $97 million, providing a price to sales ratio of only 0.09! Five Star also trades well below its Book Value per Share of $3.85. Two analysts currently believe the company is a "Buy", while one believes it's a "Hold". The average price target issued by the three analysts is $4.00.

Five Star trades at a P/E of only 3.97, which is shocking considering the growth rate of the company. As for management efficiency, the company far exceeds its competitors with a Return on Equity of 23.9%, Return on Assets of 6.5% and Return on Capital of 10.2%. The company has a solid balance sheet with $21.7 million in cash, and revenues have grown at an average of 14.2% the past five years.

Although the fundamentals of this company are very attractive at the current price, the stock is up more than 250% since April. Furthermore, the stock's RSI dipped below 70 for the first time since new highs were made and the MACD is about to cross to the downside. All of this can be considered bearish and may result in a dip. Although this alert might be a bit early, it gives plenty of time to fully research the company and truly appreciate what a gem it is.

In late February, we issued the following alert to our subscribers: FUQI Stock Alert. Since our alert, the company has run from $4.50 to $14.24 for 217% Gains!

Congrats to those who participated in this huge run!