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CHCG- Now up 40% to $1.70 on 14c vs 10c prelim eps for Q2. Nice to see such a positive reaction in today's market. CHCG had guided for only a slight increase in eps, one analyst expected 11c. Company had also guided for a mid single digit increase in revs but handily blew that away with a 26+% increase. Maybe the positive news here will raise more Chinese boats.
World Oil export table- Interesting link which shows that exporting oil countries have had a decline in exports since 2006 and they will continue to decline. Huge transfer of wealth to these countries leads them to use more of their own oil production which leaves less for export. $300 oil within a couple of years??
http://europe.theoildrum.com/node/4179#more
One would think oil had plunged below $100/bbl the way O/G stock prices are cratering today. I just picked up some ABP.
LTUS - Down 5% on only 6800 shares traded. No one is buying but there is no selling pressure either. Market is saying "show me". Q2 earnings should be better. Just occurred to me that next quarter's earnings for LTUS and many other China micros will likely be announced during the China Summer Olympics. That should focus attention on these assuming they report good #s
CNEH- Board favorite (#3 most popular pick in PS9) is hitting new highs today on good volume. Market cap is nearing PV10 value of $90 mil (based on SEC method), but that is based on year end oil prices of only about $95/bbl. Also as the company opens new wells, reserves and PV10 should continue higher. Amex or nasdaq listing should also be coming soon. I'm holding for higher prices ahead.
GW - The markets reaction with a big drop in price says that GW reasons for rejecting the $10 offer is based on a big pile of crap. I see insiders own few shares, It sure would be nice if PDS could force their $10 offer to a vote.
CNOA, Tim, I wish the CEO would start buying then. At current prices, $2 mil would buy much more than 1%...more like 6% of the company. Btw, can Chinese citizens even buy stock of american traded companies?
Interesting new post on Yahoo from someone who says he talked to Steve Wan ( a VP of CNOA) . He/she said:
Important: Spoke to Steve Wan for 30 mins 25-Jun-08 07:27 pm
1)Dalian is a done deal, just waiting on the paperwork to be finalised in China before a SEC announcement is possible;
2) Consideration will most probable be exclusively in cash. Steve would have known if there was a partial share consideration as he would need to do the neccessary paperwork. The upshot is that there will be no dilution. Steve seems to think that they have enough dry cash and will not have to borrow;
3) Steve admits that management are very poor at communication. He is always chasing SEC form and receives stuff late. HOWEVER, he stated that the company was completely compliant with all SEC demands and there was NO threat that the company would be downgraded to the pink sheets. He was quite categoric about this.
4) Steve expects the Dalian deal (and guidance for 2008) to be released in the next 2/3 weeks but he does not know the exact date. However the deal is done.
5) The topline will increase considerably this year but the bottom line will depend on the concession for tax or otherwise. Opex is also clearly increasing so it depends on how the compang leverages its new distribution network.
6) Wine is not expected to be a huge contributor in 2008 but should ramp up in 2009.
7) Steve agreed that the CEO annoucement of intention to buy shares was peculiar as this is usually done retrospectively through Form 3 disclosures. In any case, he hasn't bought any yet.
8) All in all Steve admits that the company are not great on communication. They are still planning on listing on a more senior exchange. The positives are the confirmation that Dlaian is a doone deal and that the announcement should be within 2/3 weeks. The other positive is that it should not be dilutive.
CNOA- Tim, not so smart here. CNOA has been my biggest loser of late. Tempted to add at these levels but my hand is still cut up from the last time I snatched at this falling knife. Where's our guidance??
OT- lfish, Same thing happened to me here. My assessment actually went down after huge increases the last couple of years. But that doesn't mean that taxes go down. If everyones assessments go down the county will simply adjust the tax rate upwards to keep the revs coming in.
I think the reasons that Seattle has been hit less hard than many other areas include the fact that the local economy remains strong (Boeing, Microsoft, high tech industries) plus strong restrictions on new growth and land development limit the amount of new competition.
NGA - Sold most of my shares at 9.11 after a great run-up the last 1 1/2 months. This one has historically been strong into early to mid summer. Of course it could have further to run, but in this lousy market I'm happy to take some nice profits. Thanks to R59 for this one.
Btw, I see that one of the directors is John Sununu ( Chief of staff under former Prez Bush and also former governor of New Hampshire). He has done quite well for himself with stock options on this one.
GW- Last night I had a phone call from a firm hired by the company asking me whether I had voted for the merger with Basic and strongly encouraging me to do so. Now I see they did a full court press trying to get their merger approved by as many stockholders as possible just before the new offer was announced. I haven't voted yet and now will be voting against the $9.30 merger, I like the $10 offer on the table.
Leaves me wondering. If someone has already voted, can they change their mind and their vote in situations like this?
GW(greywolf) announced that they have recieved a third unsolicited offer from PDS for $10/ share. I'm surprised there is no movement in the stock price of GW- unchanged at $9.38.
NEW YORK, June 25 (Reuters) - Grey Wolf Inc (GW.A: Quote, Profile, Research, Stock Buzz) said on Wednesday that Precision Drilling Trust (PD_u.TO: Quote, Profile, Research, Stock Buzz) had raised its offer for the company by 70 cents per share to $10 in its third unsolicited move to buy the contract oil driller.
The offer raises the total value of the takeover bid to $1.78 billion for Grey Wolf, which rejected a sweetened offer of $1.66 billion last week, saying it planned to go ahead with a planned merger with Basic Energy Services Inc (BAS.N: Quote, Profile, Research, Stock Buzz).
Precision said Wednesday's offer was its final proposal, according to Grey Wolf. Precision, Canada's largest driller, had already raised its offer once to $9.30 per share from its original $9.00 price.
Precision also said the cash portion of the deal could rise to as much as 50 percent of the offer price, an increase from 40 percent in its pervious offer.
Grey Wolf agreed to buy Basic Energy in April in a bid to combine its land drilling rig fleet with Basic's land-based well-servicing equipment.
UTVG- We will probably never know why the american directors left so we are left to wonder why? Hopefully there is nothing fishy going on. I suspect it is something else. It could well be that the american directors had a difficult time with the language barrier. I can understand that as I have listened to several conf calls of chinese companies- it is slow and frustrating while we wait for translations and re-translations. Expenses could also be an issue as the cost of attending board meetings can get very expensive if they need to fly to China to attend. Also, only one of the 3 has prior experience with a chinese company. That is Randall who also serves on the board of HSYT.ob. But I see that he is being removed from the BOD of that company as well. The reason given is the expense, from a recent filing:
This action is being taken to decrease the expenses incurred by us in connection with Mr. Randall’s compensation. We had originally retained Mr. Randall to meet the corporate governance requirements of the Nasdaq trading market, however, we have since withdrawn our application to Nasdaq. As a result, the Majority Stockholders believed that the cost and expense of maintaining an audit committee financial expert would be better expended in other areas of the Company.
As abh3 noted, UTVG has taken on new independent directors which would be needed for a future listing on the AMEX or nasdaq. Still, at least in the short term, the change in BOD does not bode well for the SP.
CHME- 2morrowgains, thanks for the info. I added some shares in the last week. This china pharma co. sure looks cheap to me again, trading at a trailing PE of 4. Sold off after reporting 8c in Q1 vs 6c a year ago but down from 17c in Q4. However the first quarter for chinese pharmas is always the weakest. Company guided for continued growth in the year ahead. From the PR:
Based on China Medicine's solid first quarter performance, the Company expects to meet its prediction of 25-35% growth in revenue with gross margins in the range of 30-35% for the full year 2008. Additionally, the Company also expects to achieve 20-22% growth in net income for the full year 2008.
CNOA cleverox, would that be new rule #13 for your list yesterday? I also wondered why the company decided to venture into the California winery business. On the plus side, wine consumption in China is growing by 30% per year and even faster for imported wines which have hefty import taxes. I have read but haven't confirmed that the company will avoid some of those taxes because they now own the winery. This is from the recent PR:
Demand in China for foreign wines, including those produced in California, is growing rapidly. In 2007, the import of wine into China totaled approximately 54 million bottles, representing a 125% growth from 2006, according to the latest report of the International Wine and Spirit Competition. The market share of imported wines in China increased from 6.6% in 2006 to 10% in 2007, while industry analysts project that share will reach 18% in 2008.
CNOA has dropped 80% from its highs in Q4 and sports a trailing PE of 3. Guidance will be provided after they finalize their Dahlia acquisition which will expand their market penetration. Seasonally stronger quarters are coming. I am holding onto my shares.
cleverox, please don't kick yourself in the butt too hard. 50% per year over 7 years means you already have about 17 times your original investment. Do that again and you'll have a very nice retirement to look forward to (if you don't already).
Cleverox, Nice alert list and write up on losers. I think I'll print your list and keep it for reference.
OT- Estimated taxes. It burns me that estimated taxes are due today for the quarter ending June 30 which is still 2 weeks away. How are we supposed to know how much taxes we owe when the quarter isn't even over yet?
AMLJ.. Zen, I have liked this one since I listened to their last CC and have it in my PS9. Their regular business should do very well over the next year with a strong backlog and many orders just starting to be filled. The most interesting part is MicaTech. In the CC, the company said they expect Mica to turn profitable in about a year and be producing revs at $800K per month within 2 years. That means strong growth for a company that did $12 mil in sales last year. The following is from last quarter's PR:
The Mica-Tech solution is a robust two way satellite communications network designed for the control of the Electric Power Grid. Due to its dedicated features and its two way operation, the system has virtually no competition.
The immediate application for the systems is to support the stabilization of the power grid at peak hours to avoid rolling black-outs. It is well known that the marginality of the power grid is at a critical phase; consequently, the USA power utilities have initiated a strategy named Demand Response, by which large financial rewards are offered against pre-agreed, power reduction contracts signed with aggregators.
Specifically, power utilities pay a Demand Response aggregator approximately $8 monthly for every kilowatt under management. Mica-Tech is a Pacific Gas and Electric (PG&E) aggregator and plans to make their first Demand Response installation to manage approximately 20 Mega-Watts by December 2008. This would generate cash inflow of approximately $160,000 per month, and significantly reduce the need for additional financial support. The company plans to increase the power levels under management to over 100 Mega-Watts within 24 months, which could generate cash inflow of approximately $800,000 per month.
CHK- re: raising target to $56 when price is over $60. The brilliant ideas that come from some of those instituional anal-ysts never cease to amaze me. I do think Congress has them beat though, with a new plan to place a windfall profits tax on oil companies. Let's reduce the greedy oil companies profits and dis-incentive them from finding more oil.
SUTR- I bought back some shares of this chinese steel company today. Seems like a good buy point...it has now given back over 50% of its gains from its low last March. Many domestic steel companies are at or near their 52 week highs and the Chinese economy is definitely stronger than the US economy is.
CHBP- I'm having problems understanding the minority interest and what it represents on this one??? It is sure eating up the profits. It is carried on the liability/equity side of the balance sheet ledger at $6.5 mil. It caused a $1 mil reduction in net income last quarter. (reduced net income from $1.5 mil to about $.5 mil in Q1). A year ago it changed a $175K profit to a $177K loss (before tax and interest expense). Maybe I missed it but I didn't see any details on it in the latest 10Q or 10K.
OPAI- I decided to sell my shares today. I was going to stay and see how it played out...it seems like a legit company whose stock is controlled by Pump and dumpers. But today's news about BJGLE saying that the merger is not legit under Chinese law convinced me otherwise after I saw that both BJGLE and OPAI used the same auditors for their 10 K filings (Davis Acctg in 2007 and Farber Hass in 2006). Thats way too much coincidence for me.
http://biz.yahoo.com/prnews/080604/cnw001.html?.v=20
RTQ, Interesting in that I see yahoo just started showing latest trades in real time on listed stocks. They had previously dropped them a year or so ago. Not sure if Google is also showing RT bid and ask. Personally, I would still use a brokerage site when I wanted to check RTQ.
LTUS - Nice to see the PR affirming their target. The SP has had a nice little rebound from its low after earnings. I think they actually should do even better since they are basing it on an exchange rate of 7.30 RMB to $1US. As of now, the conversion rate has already dropped to 6.94 RMB/$US and the RMB will likely continue to climb against the dollar.
Converting to current conversion rates the target becomes $13.8 million. (7.3/6.94*$13.1mil)
The target for 2008 is 95% of $13.8 million in net income after eliminating the effect of non-cash charges associated with the private placement and adjusting for differences in the exchange rate between Chinese Renminbi and US dollars used in the Company's 2008 financial statements and an exchange rate of RMB 7.30 to USD 1.00.
OPAI, Northern, thanks for sharing the great DD. OPAI does seem to be in a great position right now if legit. China is shutting down bigger polluters ahead of the Olympics and if OPAI is unaffected as a newer and cleaner mill as they claim, it should be great for business and pricing in the months ahead.
Their plans to build a new facility covering 2 million meters is very difficult to accept. I checked and 2 million meters= 494 acres. The largest building in the world by volume is the Boeing plant in Everett, Wa that builds the 747, 767, 777, and 787 airplanes. The footprint for that monster is 98 acres. This is 5 times larger? Maybe they are counting 490 acres of trees they need for raw materials to make the paper.
I picked up a few shares yesterday at what seemed like a bargain price yesterday. I'll hold for now and see how this story (or scam) develops.
Pending merger deals- I looked at a few of the bigger discount deals and as expected, there were substantial doubts as to whether the deal would go through. Banks have tightened down the screws on many types of financing including M&A deals, so that is one potential roadblock. BTW, I tried to re-access the list and the site blocked me, saying I am limited to one access per day. It is a new day but maybe not quite 24 hours yet. Of course they would like me to subscribe at $100/month for unrestricted access.
Here's a whole list of pending mergers including the profit and annualized % profit assuming the deal goes through:
http://www.mergerinvesting.com/pendingmergers
OPAI - I'm wondering how the company will pay for that new production facility. Not sure what their current production is but this new one must be huge if it could add $1 billion in sales by 2010. Maybe they are doing a new stock offering to help pay for it??
Orient Paper to Build Paper Milling Facility; New Facility to Substantially Increase Orient's Bottom Line
5:00p ET May 27, 2008 (Business Wire)
Orient Paper Inc. (OTCBB: OPAI) (the "Company"), one of China's largest paper milling manufacturers announced today that the Company is planning to build a new paper milling production facility in the second half of 2008 with annual production totaling 1.2 million tons.
The facility will occupy approximately 2 million square meters with its main products being corrugated paper, offset paper, writing paper and Diazo paper. Once the facility is operational, initial production is anticipated to be approximately 0.5 million tons. It is estimated that by 2010, annual production could reach approximately 1.2 million tons. It is expected that by 2010, sales will be between $800 million and $1.3 billion with net income in the range of $160 million to $230 million.
CNEH - The PR also indicated that CNEH now has 165 operating wells. That compares to 157 wells at the end of the first qrtr. So they have increased their operating well total by 5% in 9 weeks. Excellent! Also if China suspends the taxes per the article that KIK mentioned, that could also boost earnings dramatically.
2morrow gains posted a link last week saying that CNEH will soon have a listing on the AMEX. That seems to be where most smaller OG companies go to anyway:
Already traded and soon to be listed on AMEX, CNEH thrives with an unconventional business model adapted to today’s geopolitical reality of drilling for oil."
http://pakobserver.net/200805/19/news/topstories07.asp
LTUS, nelson, agreed that listening to the conf call of this and many chinese companies is rather difficult. Everything has to be translated, no doubt some things are lost in the translations, and sometimes the translator is difficult to understand as well. Don't know of a good way around that one.
bbotc re:, CNEH and chinese companies, No doubt apprehensions about the validity of some of the Chinese companies are keeping many of their valuations low. Plus it is definitely tougher to visit the CEO/ management and do onsite tours with their operations in China.
On the other hand, I don't see these guys giving themselves inflated salaries, endless perks, and outlandish option packages that many of their american counterparts do. In the case of CNEH, the founder and CEO gave back 10 million shares and forgave $7 million in loans he had made to the company. Apparently he decided that a smaller piece of a bigger pie is better than a bigger piece of a small pie. Show me one American CEO who has done that! The sleaziest part of many of these chinese issues seems to be the american counterparts who arranged the reverse shell mergers to get them traded in the US.
CNEH seems cheap again with a 20% sell off over the last few days. They will likely soon be listed on the AMEX which should further help their valuation going forward.
BTW, Mao has been dead for 32 years.
Wade- LTUS, in response to a stockholder question, indicated they are on target to meet the $13.8 mil net profit target that they had included as a make good provision in a finance deal earlier this year. They also said they will include that in a PR soon. Listing on a senior exchange is expected later next year.
Using 48 mil fully diluted shares after the pipe financing, that works out to 29c eps/ share. At the current SP, the estimated PE is just under 3. The stock sold off sharply after they reported eps of 2c in Q1, vs 2c a yer ago. The first quarter has always been slow for this and many other Chinese pharma companies. Earnings should only go up from here. I believe it is very oversold at the current price.
LTUS _Held a CC this morning. Reaffirmed quidance of $13.8 million profit for 2008. That's a PE of 3. USA road show coming next month. Not sure why the sell off today. Sure looks cheap to me.
CNEH, Wade, oil prices are about $20 per bbl higher than they were in the march quarter and the company will likely increase production by another 20000 bbls (10% increase). There is no doubt that the company will will report higher earnings than they did for the march qrtr. I haven't worked it up yet but I have seen estimates of 21-25c/ share for the June qrtr.
If I wasn't already loaded up, I would be adding more shares on this drop.
Tim, re CNOA - Makes sense to me that the company would have higher margins on rice sales from what it grows on the 6000+ acres it owns/controls compared to that which it simply buys and resells. Sales from its own crops occur mainly in Q3 and Q4 so margins will increase substantially then. Most of CNOA's sales in Q1 came from distribution and those margins were probably also held down as it expands into new areas.
In their own words, "Our increase in sales is primarily attributable to the expansion of our operations into the distribution of rice. During the first quarter, we had taken initial steps to purchase both green and organic rice from other rice producers and then resell this rice through our established distribution channels. We had decided to expand our current business model of distributing the rice we’ve cultivated to one where we can best utilize our distribution network by offering products from other organic producers.”
Company will be providing guidance for '08 once they finish their diligence on the acquisition of the Dalian Baoshui District Huiming Trading Ltd which will expand the company into soybeans, corn, and grain distribution. It does appear that CNOA will have to pay income taxes this year but I expect that higher rice prices will more than make up for that.
I'm looking for the SP to start moving back up with the start of summer, and possibly peak (again) late next fall.
CNOA - Added a bunch of shares today @ 85c, and looks like there are more available if anyone is interested. Testing 52 week low again, now at only 20% of its high in Q4 last year and down to a trailing PE of a little over 3. The coming quarters should only get stronger for this expanding chinese rice company.
LTUS - down 23c to 97c on Q1 report showing 2c vs 2c eps. No big surprise there as LTUS reported 8c last Q, but Q1 has always been their weak quarter. Based on "make good" targets, LTUS is selling at 3.5x 2008 earnings estimate and 2.7x 2009 estimate but they need to get a PR out.
CNOA - stabilizing after selling off again at the open. That is quite a spread at the California vineyard they recently bought. While it does seem odd that a rice company would buy it, maybe CA wines are becoming very chic by Chinese consumers?? Here's a link to the vineyard:
http://www.bellisimovineyard.com/estate_property.cfm
SUTR, R59- 21c sounds sweet to me. Apparently the market likes it too, I am seeing $8.00 bid in after hours!