Morningstar's Small-Cap Superstars featured UCBH (a San Francisco-based bank that focuses on the ethnic Chinese population in the United States and abroad) as a pick on July 1, 2008, when the stock was trading around $2.30. Since then the company's shares have more than doubled. Morningstar, however, has now taken a more cautious view on the stock, by increasing our fair value uncertainty rating to extreme (which effectively pegs our rating on the stock to three stars) and by lowering our moat rating on the stock from narrow to none. This reflects our concerns about the magnitude of the bank's credit problems. Nevertheless, after reviewing the company's recently reported second-quarter results, Senior Stock Analyst Michael Kon maintained his $7 fair value estimate. We'd also note that several of our Small-Cap Superstar fund managers continue to hold UCBH's shares.  

To read Kon's latest note on UCBH, click on the link below:

http://quicktake.morningstar.com/stocknet/san.aspx?id=246826