China Armco Metals Inc. (CNAM)

[mystiq]

i should have sold my several k shares of cnam and bought reliable earner cheap ENHD. anyway i'll wait till next yr

[viking86]

that should work. Don't have a problem hiding the Ibox and the intro message with any PC. But my Blackberry somehow doesnt let me do that. Not sure how to get around it, am not too computer savvy, hah. I have already about 30 bookmarks with just generic sites, would hate to add another 20+ with single stocks LOL.

[value1008]

We can hide the i-box in our I-Hub settings. Also we can put CNAM in our list of "favorites" (see top of page), and then when new messages come in, we can just click on the new messages area and bypass the opening page for CNAM.

[bradford86]

go for it.

[viking86]

Fears of imminent interest rate hikes weighed on metals stocks this week but commodities stocks should continue to look good acc. to this article:

http://www.thestreet.com/story/10920543/1/stock-market-story-nov-12.html?cm_ven=GOOGLEN

[viking86]

Thanks for the suggestion. Those pics bother me every time I want to view messages on my Blackberry. I sent Glenn a PM since he was the one who created and updated the IBox.

[rstar]

ibox should be updated removing useless massive pics making it unviewable

and including pertinent info such as share structure imo...

[viking86]

agreed. They reguided for 140M in mid Sep, meaning by then they already knew what to expect from Q3. And 140M for the year means a pretty strong Q3 which should not be affected by the power cuts. So if the rev comes in way below (I would say) 50M, something is wrong here. With all the money Yao has spent out of his pocket, he has much more interest than anybody else to see this stock perform I would think.

[southacresdave]

Viking...the earnings report will be interesting to see---was management even on target for 8M/140M for the year (based on 3rd Q results). If they come out with some lame numbers for 3rd Q then you know they were never going to make it in the first place and this latest set back is questionable.

Starting to have my doubts.

[viking86]

maybe it's not as bad it first seemed this morning.

The blackout may not affect Q3 rev at all based on what the Sep PR said (see below) and confirmed later by IR (see sticky note above). Q4 will be strongly affected, even more than the initial 40M that was already built into the reduced guidance of $140M. If that reduces annual rev by another 30M, I still see total annual revenue of 110M, consisting maybe of 50M in Q3 and 35M in Q4. That would yield an est. eps of 0.36-0.39 for the year. Not too bad for a stocktrading now at below $3.5?

Considering all the pent-up demand for scrap steel from all the steel mills that were affected by the Q4 blackouts (affecting 18 provinces!) on top of the already strong demand mentioned in the recent CC and in todays' PR, and no more power supply problems in 2011, I can see them do almost 100% capacity next year to catch up with orders, that's about 350-400M rev from the scrap plant. Add to that 60 to 100M from the trading business, we get about 410 to 500M rev for 2011. Compare that to today's measly market cap of 50M and draw your own conclusion. I think I will be adding here to take advantage of the "bad" news. fwiw


Sep PR: The energy restrictions will significantly reduce our recycling capabilities in the fourth quarter which is expected to impact its revenue in 2010 by as much as $40 million. This has caused management to revise its financial guidance for the full year of 2010 which is now expected to exceed $140 million with net income exceeding $8 million.


Today's PR: Commenting on the announcement, Mr. Kexuan Yao, CEO and Chairman of China Armco Metals, Inc., stated, "While the government's decision to restrict power will further the negative impact on our 2010 performance and we do not have sufficient clarity to assess the full impact in 2010, we do know that it will certainly end before the beginning of 2011. We believe there will be sufficient demand in 2011 for our scrap metal to enable us to quickly recover following this interruption and we intend to rapidly ramp up our production utilization rates in the coming quarters."

[Reeftanker]

Yep.. bought me a mess of it...!

[Ries]

is that -20% pre market right???

[viking86]

EXTENSION OF POWER RESTRICTIONS INTO Q4'10: Boy, that's bad news. CNAM withdrew the previously reduced guidance for FY2010 citing unsufficient clarity re. impact on its operations and revenue. At least they said no more power restrictions in 2011 with the new 5-year plan:

Due to the uncertainties as to the extent and duration of the current power disruptions, management cannot estimate its financial performance for the remainder of 2010 and is therefore withdrawing its financial guidance for the full year of 2010. On January 1, 2011 China's Twelfth Five Year Plan (2011-2015) will become effective eliminating the need for the current restrictions.


http://finance.yahoo.com/news/Jiangsu-Province-Extends-iw-2772011735.html?x=0&.v=1

[viking86]

looks like it has finished basing on the 50MDA and broke out of the upper trend line on big volume today:

[lovethatgreen]

this definitely has not joined the party as yet by a long shot

[southacresdave]

Viking....thank you for sharing.

[viking86]

no I didnt ask. But he seems to be very impressed about the company's LT prospects.

[value1008]

Great find, Viking. Glad you've got a personal connection now with Worden. Did you find out how much d.d. he's done in person visiting CNAM's operations?

[viking86]

new IR : I had yesterday an email exchange with Barron Worden (who bought over 10% of the company recently) about the need for CNAM to hire a more reputable IR and auditor ASAP. He said they just hired HC International as their new IR. Maybe we will get a PR of this very soon or with E/R next week. :)

[viking86]

Technically stock appears poised for an upturn. Semms to be basing at MDA 50 support, bullish crossover of MDA 50 and 100 possible. Also the Full STO has now hit a low of 7.2 and ready to turn up very similar to the setup of Sep 20 just before the big rise. I will be adding here in anticipation of a stellar Q3 report and positive guidance & news.

[viking86]

Stcokdetective: are you following up on this? We havent heard from you since your original post. I googled Richard Cutler. He has indeed a securities law office in Houston where EXTI is based I believe.

http://cutlerlaw.com/attorneys/

[Steveshue]

I love how anonymous posters have courage. Stock detective, like all your Boca Brothers the lights will soon be turned out on your operation.

DRGG, Wallstreet Enews, CDII, Rich, James, and all the Boca Pump BS has finallyt awoken the SEC.

Wait for the encore!, it will be epic.

LMAO

[tiesto]

Ahh, looks like we have the author of that hack piece here on the board with us.

[value1008]

Glen and Stockdetective, you guys might want to talk about getting your findings published about the sleaziness of the corrupt connections involved with these guys...

[bradford86]

who is that?

[value1008]

Stockdetective, i want to add my voice to others in thanking you for some great d.d. This deserves a Seeking Alpha or TheStreet.com article or blog mentioning the facts you've uncovered, in an overall update article on CNAM.

Glen Bradford, are you listening?

[viking86]

Excellent sleuthing. I have always suspected a connection b/w Chris Ryan and Gentile. That Newswire seemed indeed very suspect.

Seems to me Yao hired an attorney (Barkats) to have the "Restricted" stamp removed from the stock certificate b/c restricted shares cannot be used as a loan collateral, correct? But that doesn't mean Crisnic has the right to sell (the day after he received) those 1.3M collateral shares unless Yao defaulted on his payments which he didnt, considering Yao never received the 2.5MM from Crisnic to start with. Or is it written anywhere in the structured loan agreement that Crisnic can sell the shares as long as he replaces the shares later ? The fact that Yao filed a suit against Crisnic tells me that's not the case. Do you have a link to that loan agreement? Would help to check the exact wording out.

[derek2000]

This is great DD work. Thanks.

[stockdetective1]

I am a shareholder of China Armco. I just noticed that Chris Ryan at www.newswire.net has been posting several articles about China Armco. The way that Chris Ryan has been writing up caught my attention. I was wondering why he is so concerned about China Armco. Looking at his past articles, I found he has had no background of financial reporting.

I decided to dig out in my details.

First, I called James Stout, an attorney based in Nevada, representing Crawford Shaw in a filing lawsuit against China Armco. Chris Ryan has manipulated facts enough in his articles in regards to this lawsuit. In fact, Chris Ryan is an agent for Crawford Shaw to contact James Stout to initiate this lawsuit. Interestingly, James Stout has withdrawn his representation of Crawford Shaw in the lawsuit. Because Plaintiff has requested that James Stout, Esq. file a pleading that James R. Stout, Esq. did not believe was appropriate to file. The refusal of James R. Stout, Esq. to file the pleading led to a complete breakdown of the attorney-client relationship.

Next question I have is that why Crawford Shaw and Chris Ryan have any interesting in China Armco. From their lawsuit, I don’t even see they are a shareholder of China Armco. Crawford Shaw is CEO of Extentions, Inc. (http://finance.yahoo.com/q/pr?s=EXTI.PK+Profile). www.newswire.net is owned by EXTI. Basically, Chris Ryan is working for Crawford Shaw and both of them filed the lawsuit against China Armco.

Also I noticed that Anthony Gentile, portfolio manager for Crisnic Fund, posted an article on newswire.net claiming to have a plan to sue China Armco for a stock loan transaction on August 9, 2010 (http://www.newswire.net/newsroom/index.php/permalink/69140.html). After that, China Armco filed a lawsuit against Anthony Gentile and Crisnic Fund in a federal court.

Is there any connection between Anthony Gentile/Crisnic Fund and Crawford Shaw/Chris Ryan/newswire.net? Yes, it is. EXTI’s SEC counsel is Richard Cutler (http://www.otcmarkets.com/stock/EXTI/company-info). Richard Cutler is also representing Anthony Gentile/Crisnic.

In Chris Ryan’s articles, he never disclosed that he is an agent for Crawford Shaw who filed the lawsuit against China Armco. In his disclaimer, he claimed he is independent journalist. Chris Ryan did not disclosed he and Crawford Shaw are acting on behalf of Anthony Gentile/Crisnic in this matter.

Chris Ryan never disclosed that he received the payments from Anthony Gentile/Crisnic to file the lawsuit and to write up these articles on the basis of the lawsuit that he and Crawford Shaw filed together.

[viking86]

Chris Ryan, the author of this Newswire article, seems to work for EXTI whose president is the plaintiff of the lawsuit against Yao, acc. to this Yahoo post:

As we all know, Chris Ryan from Newsire.net, the author on this article is employed by Extensions Inc. (EXTI). Crawford Shaw, the plaintiff in this suit, is President of Extensions ! Why doesn't the author mention the he and the plaintiff are related parties ? Are we creating new screen names now since the last handfull were exposed due to similarly mispelled words ?

another post from YMB:

http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_C/threadview?bn=102178&tid=18192&mid=18192

[Big-J]

Interesting article- http://www.newswire.net/newsroom/index.php/permalink/69192.html

[pickinstocks]

Not sure about this, but as a side note I see shorting as very risky here. Maybe I'm biased, or maybe they are just looking for a quick trade for a 10% profit or so as this pulls back after yesterday. But I mean c'mon, how much lower do these shorts believe this company's shares will go? I welcome the shorting (as long as it's legal) so we can have more days like yesterday. That said, are we so sure that yesterday's pps rise is entirely due to a squeeze or could some news have been leaked? Maybe the rolling blackouts are not doing the "damage" we thought they would or Glen's article opened some eyes. Just food for thought.

[stills999]

I think that is just 218K short transactions that day, not necessarily naked shorts. Anyone else?

[viking86]

REG SHO list of 10/14: acc. to the list of naked shorting (courtesy Atco CGS board), looks like 218K naked shorts were added
today. That's more than the 185.8K and 52.6K naked shorts added today for CCME and CHBT. I guess the buy demand blew away the short pressure. Not sure if I read that right though.


Date|Symbol|ShortVolume|TotalVolume|Market
20101014/CNAM/218.3K/499.6K/Q

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=55564195

[viking86]

looks like it !! Hopefully more to come.

[pickinstocks]

squeeze time??

[viking86]

Glenn's Street.com article: "5 stocks and 5 reasons to buy"

Laconic and straight to the point !

http://www.thestreet.com/_yahoo/story/10886548/1/5-stocks-and-5-reasons-to-buy-them.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

[viking86]

Correlation b/w steel and coal: Interesting chart from Yahoo board

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_C/threadview?m=tm&bn=102178&tid=18093&mid=18102&tof=2&rt=1&frt=2&off=1

[Chesterfield]

Test

[mauiguy2]

Very nice post, Viking.

And, one thing you rarely hear from traders is their losses and unsuccessful trades. They're quick to publicly thump their chests with a good trade, but very quiet after a bad trade. It's a well known fact that an incredibly high percentage of traders do horribly.

But, you're right....you can't be too good at either

[viking86]

Pick: One of the reasons you are more biased to the stocks you own is b/c you understand it better from all the DD you invested in it and are more willing to shrug off temporary setbacks and wait for better times.

Being a LT investor, one of my problems is getting "infected" by all these trigger-happy folks at IHub who are more surfers than investors. Reading all these posts of smart trading ideas, you gradually lose your original "buy and hold" stance and unconsciously become a trader, trying also to ride the waves. My best stock this year is SIAF where I just bit the bullet and held on to it and resisted temptations to "maximize" my gain by selling at highs and buying back in at lows. Had I sold when the stock ran up to $1 for a 100% gain, I would probably not have been able to buy back in and would have missed the 200% gain I am enjoying now and much more to come. A counterexample is PUDA, another stock I have followed for years. When news came a few months ago that they were about to finance the next big consolidation wave, I ran away and sold out my entire position, hoping to buy back in at 1/2 price. As with many other stocks that I sold with the same intention, it went back up so fast that I lost it for good, not wanting to buy back higher than I sold it for.

So in some sense either you are a LT investor or you are a trader. You can't be too good at both imo. Maybe it's not that bad after all to get attached to something you know well and stick to your guns. At least that's what I am planning to do with CNAM. But the real test here will be what this stock revisits its March/April high. Again, it will be very tough to sit on your gains but it will be worth it years from now. fwiw

[southacresdave]

I'm aware of the previous posts/links. This one was interesting because it wasn't plantiff's suing Yao, it was where Yao is suing Crisnic Fund. Maybe it was brought up already, just don't remember it.

[pickinstocks]

The toughest thing with investing imo is not to lose but to sit on your gain, don't you think so?

I agree.

With regards to sitting on gains, knowing when to buy and sell for losses, what's tough, etc, I read a book recently called predictably irrational by dan ariely (sp?). In it an example is given showing how once someone owns something, it suddenly seems more valuable in their eyes. The example used was final 4 basketball tickets which are given out at Duke via a lottery. All these students wait outside for days for their tickets; some get them some don't. Then afterwards, Dan called people who got tickets and people who didn't. The person that got the ticket was asking sometimes thousands of dollars for it. The person who missed out and didn't get a ticket was often only willing to pay in the low hundreds of dollars for it. Dan's belief is that the ticket now holds some sort of "sentimental" value or brings along with it some "experience" for the person that has it, and that's why they are asking so much more for it.

While maybe shares of company don't hold those sentimental values or experiences, this is one dilemma I see with the market; as soon as you own something it seems more valuable to you, and the people who don't own it seem unable to care any less. These biases tend to make things difficult.

[viking86]

nothing that we donot already know. This was discussed here a few weeks ago. Glen had several posts with links on the subject.

[southacresdave]

CNAM...CEO's lawsuit against Crisnic Fund

interesting link posted on Yahoo:

http://www.scribd.com/doc/37761602/Exhibit-8-Declaration-of-Kexuan-Yao

[viking86]

then you have at least 40 years left to make your own mistakes ! I dont have that much time left but I am still making plenty of those LOL. Kidding aside, I do think $5 is an excellent basis for this stock as long as you give it at least a few years to run. The toughest thing with investing imo is not to lose but to sit on your gain, don't you think so?

[viking86]

The bulk of Barron's buy was done on Sep 7 or so (1.9M shares) at about $3.5 a few days before Company announced the blackouts and reduced the 2010 targets. I think they may have known about the Sep blackouts but Worden himself was caught by surprise by the target reduction and the subsequent SP decrease. I remember that from my last conversation with him. Not that he cares too much for the ST outlook. I think he's more focussed on the LT prospects of this company and by its being able to do about 400M in rev from the scrap plant at full production plus the trading biz in just a year or so. That's an eps of at least $2 right there. Add to that rev from a second plant and the australian mine bringing some extra income from their 19% stake and you have the case of a strong buy, at least for a LT investor like him. He seems to like the manufacturing sector better than other sectors like Pharmas or Leisure...

I don't think he's in here for quick trades either.

[southacresdave]

I think we are going to need some favorable results from management before we break $5. The plus is that Barron's has been buying a lot lately---that tells us they like the price obviously. What does that really mean?.....well, since they have people stationed in Shanghai then they have a solid read on the power outage situation and work utilization/potential of the the new plant. Better than anyone else on any of the message boards. Worden/Barron must not be thinking there will be an extension of the power shut-down (or else they'd probably wait for the price to drop down on another disappointment announcement).

Obviously they are in CNAM for the long-term (cause by having to file Form 4's it will be hard for them to sell out there position easily without spooking the price underneath them), but I also think they are the best indicator of what the plant is doing short-term too.

[pickinstocks]

I did but I'm pretty much at all I can put into this one right now. I'm not tooo bad off, somewhere in the $5 range. At 24 years old, I don't quite have all the money I'd like to invest since I'm still building up a safety net of savings.

[value1008]

There might be a bit of resistance just above the 4.20 mark, but no reason the stock shouldn't soon be trading back at least above $5 given likely 2011 EPS of at least 1.50 and all this buying by Worden of Barron's, who is located in China not far from CNAM's operations, so he can do a lot of on-the-ground d.d.