Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
CNAM at $5.15, +11.7% SAR trigger in sight?
CNAM has a very strong open - finally.
I am looking at the chart and it seems that it just touches the up parabolic SAR.
After falling like a knife, the stock has stabilized last few days.
Is today's the reversal day?
GPRC - One of my favorite stocks.
It reminded me of CELM before taking off.
Its growth last year
- Revenue increases 85%
- Net income increase 102%
- Very positive cash flow, Cash increases to $7.3M from $1.0M at the start of the year.
More importantly, there is no finance needs.
WEMU Rev growth 190% yoy.
OUTH SAN FRANCISCO, CA and SHANGHAI, CHINA--(Marketwire - 05/11/10) -
First Quarter Revenue: Approximately $30 Million, up 190% over the Same Period Last Year
First Quarter Net Income Expected to exceed First Quarter Net Income for the Same Period Last Year
Worldwide Energy and Manufacturing USA, Inc. (OTC.BB:WEMU - News), a U.S.-based solar module technology and China manufacturing company specializing in products for customers in the industries of solar energy, aerospace, wireless telecommunications, medical equipment and automotive industries, today announced preliminary financial guidance for the first quarter ended March 31, 2010.
The Company announced today that expected revenue for the first quarter ended March 31, 2010 is approximately $30 million, an increase of 190% over the same period last year. Net income is conservatively expected to exceed first quarter income for the same period last year.
Jimmy Wang, chief executive officer, stated: "We are extremely pleased with our first quarter results. We are strongly positioned for extraordinary growth in our solar division this year. I look forward to sharing our full financial results in the very near future."
CNAM - strong bounce.
Who bought CNAM yesterday?
Lost - you are my hero.
"Bought CTFO CHGS CHBT YONG SKBI have orders for CCME and GFRE"
Overall market is going green and NEP is recovering.
I got some NEP 7.5 calls and its up 38% already.
Rato,
There are three things:
1. My previous comments regarding delinquency are geared toward Faber and China doom sayers. Not against your thoughtful comments regarding China small cap market.
2. I agree with you that Beijing's tightening of policy will definitely reduce growth. My guess is that GDP growth will be reduced from 10-11% to 8-9%. Chinese government always likes to target 8% with low inflation. That's why the gov uses mostly direct tools (restriction on mortgage/home purchase) than broad impact tool (interest rates) to prick the real estate bubble.
Even a 4% is still good growth. Although much less attractive than 8-9%.
3. How does slow down impact earnings?
- It will probably slow down of the yoy earning growth. Assume the economy grows at a healthy 8-9%, a good company can easily grow 20-50% in revenue, and more in income.
- I understand that you have concern over the earning. As I said before, earning is not a major issue at this moment for China small caps. "Out of favor" is. For example, GPRC reported 102% earning yoy earning on April 14, and its PPS is kept drifting lower ever since. The company has a PE of 8 and is trading at a major exchange. No debt, no finance needs. If its PE ratio catches up with S&P's 16x, it PPS would be a double from here.
- Many of the CGS stocks, including CPBY, DYP, CELM, LPIH, CNAM, BSPM, NEP, UTA, ONP, .... etc. all have nice growth rate with low PE ratio. Most of those companies grew nicely under the recent recession.
That's why I am not pessimistic.
Let me try to explain the concept.
"Synthetic CDO is just like your bet on the football. For you to bet Joe (Montana) to win, someone has to bet him losing. You are not purchase the team, or the players. You do not even own football scores. They are just reference points for you to place bet. Abacus was the book marker, and GS just rans the casino and should not be held responsible for your loss."
I do not necessarily think people are dumb. They just could not believe that our tax money went to finance gambling operations on The Street and to bail out the losers, while winners kept all the coins.
I was trying to explain to someone in my office this morning that a synthetic CDO MUST have a short position by DEFINITION, since no actual mortgage bonds are in the deal, they are just used at the reference point.....
He looked at me with a horrified stare and said: "Ahhh, that's baloney, no one would invest in something that really did not exist"
Faber article - stress test
Forzagrifo - I fully agree with you.
In the Faber article, they quoted stress test results that Chinese delinquent loans would triple with simply a 10% drop in real estate prices.
The Bloomberg article is full of funny statistics and "worst case scenarios". As a proof of bubble, the same article quoted that China's property price increased 11.7% in 70 cities in march.
So a drop of 10% will bring the real estate price back to one year ago. Majority of the people's purchase are still profitable. It is also well within the 30% down payment for recent buyers. Hardly a reason for major increase in delinquency.
It is almost akin to say that after a major run up in stock market, 11.7% over last month alone, a 10% correction will trigger major margin calls in a under-leveraged market.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aMbfBKW.uKn4
A very lively board.
It is interesting to read both (or many) sides of the arguments.
I dug out the old posts from Chad (by clicking his name) and found some were very informative - especially his comments on Rule 144(i), Belmont shells, and FINRA.
Good luck to all.
I would agree with you if you meant that the sector under-performed IN SPITE OF good earnings.
Just today, FSIN and LIWA reported great 1Q results. LLEN upgraded its guidance. Yet the sector is sinking faster than the BP's deep ocean platform.
Many of CGS stocks (CKGT comes to my mind) never get the respect for their trailing earning to start with. YONG had a good result but if you look at its chart following the last report, you may think that YONG is going bankruptcy.
"4Q earnings sucked, why will 1Q earnings be any different?"
Strategy under market corrections:
Here are some potential strategies and my comments:
1. Do nothing strategy
- Just tough it out. A panic sell is the worst enemy of profitable trading.
- If you believe in your stocks, you can relax and go back to your day job or go play golf.
- On the other hand, if you truly believe in a worst case, go to strategy number 2.
2. Technical strategy
- If you choose to use technical strategy. As a group, the China small caps is clearly on a downtrend, so stay in cash or even shorting the stocks will make sense.
- I am very hesitating to short a growth stock with a PE 5.
3. Value strategy
- There are plenty of blue light specials. So if you are a value investor, it is probably time to enter.
- But like K-mart, a special may not be so if it would be marked down by another 10%.
4. Hedge strategy
- In this strategy, you buy call/put at the same time (hedge) or buy protected puts for your longs.
- This is probably the best strategy. One thing that I know is that most of the China small caps are not going to stay at the same price point. It may go up big time due to its intrinsic value, or go down as the overall market corrects itself. So a market neutral hedge makes a lot of sense.
Blue light specials
After trading in its own alternate Universe over last four months, US-traded China small caps finally joined the rest of the market today.
China small cap index, a portfolio consists of 96 value-growth stocks traded in US, is trending in synch with Dow and S&P. The index is down another 1.75%. Only 8 (eight) stocks are up, vs. 69 down.
http://chinaplus1.com/content/china-small-caps-index
The index serves as a nice bridge between China and US. It beats Shanghai composite handsomely by 9.5%, but trails Dow by 9.4%.
China prediction.
All major shorts of China (Faber/Chanos) now clearly stated that Chinese economy "may" crash within one year.
This clarity "may" help us, since all of us will certainly live long enough to see if those predictions are true or not.
While I disagree with them, I respect their intellectual ability. I "may" send a fan letter to them if their prediction comes true.
PS. The public records of China Crash predictions:
- Gorden Chang predicted China's collapse around 2006 in his book "The coming collapse of China" in 2000. He argued that the hidden non-performing loans of the "Big Four" Chinese State banks would likely bring down China's financial system and therefore the whole country.
Result: Big fours are very profitable and unscathed by US-induced financial meltdown.
- Fortune magazine 1994: "Death of Hong Kong” cover story.
Result - none of the prediction happened.
LLEN - A good news is a good news.
Pre-market bid/ask 11.16/11.46, last trade 11.16, previous close 10.5.
I do not quite follow Rich's comments. Not sure why the negative tone toward a nice piece of news from the company, especially considering that the stock is down about 30% over last two weeks.
I, for one, like the words that the company "Announces Fiscal 2010 Results to Exceed Previously Announced Guidance."
It is even better that the company will likely beat the upgraded guidance.
BIDU up $13 on downgrade by Credit Suisse
At least some Chinese stocks are getting some respects
OT - Shanghai Expo Pictures.
Got to see those pictures here. I am kind of ambivalent on the expo itself (the money spent), but the pictures are just dazzlingly beautiful.
http://www.boston.com/bigpicture/2010/04/shanghais_expo_nearly_ready.html
SOE profits:
Rich/Ryan,
Where did you get the information that SOE are losing money? You may want recheck the numbers again.
I can easily list many money makers: China Petro (PTR), SNP, China Mobile, Unicomm, China Life, Chinalco, ...
In fact, all major state own enterprises are big money makers, billions from each. You can check their numbers easily from their SEC filings as they traded as ADR.
PS. I just searched for SOE profits. Here is what i found:
"China's State-owned enterprises (SOEs) are expected to have generated 750 billion yuan ($110.29 billion) in profits and achieved a sales revenue of 12 trillion yuan in 2009, despite the global economic recession."
CNAM - Gap at 5.90 filled
LOD at 5.75. Trading at 5.88 now.
LLEN - Does Crame realize that LLEN is a Chinese company.
Does his call for "getting out of all China stocks" still in effect? Or he think LLEN as a Seatle company along with MSFT/AMZN.
BSPM = Shanxi Aoxing
Try this web site
http://www.aoxing-group.com
Then click to the English version on top right.
BSPM - What I found out so far:
(Originally posted in CGS board)
As all of us know, Aoxing Oleanolic Acid Capsules is the heart of BSPM. Therefore it is important to know if the "rumor" is true or not.
After spending sometime to trace through various websites, I am finally able to get to it. It seems to me that the suspension notice is for real, and is published on a government website.
Finding the Suspension Notice:
The original link from a government website regarding the suspension of 7 drugs.
http://www.sxfda.gov.cn/CL0004/14420.html
The Shanxi bureau of State Food and Drug Administration clearly states that seven drugs are "suspended from any further sales" effective immediately (as of April 19, 2010). The names and reasons for suspension are included in an addendum in a form of MS Word document.
http://www.sxfda.gov.cn/directory/web/WS01/images/1271917345671.doc
I could not open the attached documents but multiple news site rebroadcast the announcement and from there, I was able to view the attached list. I google searched multiple websites just to make sure they match with each other.
http://www.qmyy.com/news/alone_news_show.aspx?id=20100422000084
http://www.21food.cn/html/news/26/561194.htm
#4 of the list: Aoxing #1 Oleanolic Acid Capsules, from Shanxi Aoxing, the Chinese subsidry of BSPM.
I verified that Shanxi Aoxing is Biostar: Shanxi Aoxing's website is http://www.aoxing-group.com. The English version leads to http://www.biostarpharmaceuticals.com/
I also verified that the suspended drug has a "State Drug Approval Number" of H61022832, the same as listed in Biostar's website.
Reasons for suspension:
The rough translation:
Name of the Drug: Aoxing number one Oleanolic Acid Capsules
Manufacturer and permit number: Shanxi Aoxing, "State Drug Approval Number" of H61022832
Violations:
1. Unauthorized changes in the content of [product's manufacturing] permission
2. Use of patient's image as proof of product efficacy [effectiveness]
3. Use of absolute language to exaggerate the effectiveness of the product
My comments:
The sales of the product is suspended by the government of Biostar's home province, which in general is more damning than banned in another province.
Violation #1 could be very light or very serious, depending on the details.
Violations 2 and 3 concern with (exaggerated) marketing, which could be easily fixed.
BSPM - What I found out so far:
As all of us know, Aoxing Oleanolic Acid Capsules is the heart of BSPM. Therefore it is important to know if the "rumor" is true or not.
After spending sometime to trace through various websites, I am finally able to get to it. It seems to me that the suspension notice is for real, and is published on a government website.
Finding the Suspension Notice:
The original link from a government website regarding the suspension of 7 drugs.
http://www.sxfda.gov.cn/CL0004/14420.html
The Shanxi bureau of State Food and Drug Administration clearly that seven drugs are "suspended from any further sales" effective immediately (as of April 19, 2010). The names and reasons for suspension are included in an addendum in a form of MS Word document.
http://www.sxfda.gov.cn/directory/web/WS01/images/1271917345671.doc
I could not open the attached documents but multiple news site rebroadcast the announcement and from there, I was able to view the atached list. I google searched multiple websites just to make sure they match with each other.
http://www.qmyy.com/news/alone_news_show.aspx?id=20100422000084
http://www.21food.cn/html/news/26/561194.htm
#4 of the list: Aoxing #1 Oleanolic Acid Capsules, from Shanxi Aoxing, the Chinese subsidry of BSPM.
I verified that Shanxi Aoxing is Biostar: Shanxi Aoxing's website is http://www.aoxing-group.com. The English version leads to http://www.biostarpharmaceuticals.com/
I also verified that the suspended drug has a "State Drug Approval Number" of H61022832, the same as listed in Biostar's website.
Reasons for suspension:
The rough translation:
Name of the Drug: Aoxing number one Oleanolic Acid Capsules
Manufacturer and permit number: Shanxi Aoxing, "State Drug Approval Number" of H61022832
Violations:
1. Unauthorized changes in the content of [product's manufacturing] permission
2. Use of patient's image as proof of product efficacy [effectiveness]
3. Use of absolute language to exaggerate the effectiveness of the product
My comments:
The sales of the product is suspended by the government of Biostar's home province, which in general is more damning than banned in another province.
Violation #1 could be very light or very serious, depending on the details.
Violations 2 and 3 concern with (exaggerated) marketing, which could be easily fixed.
AXN 2.09, up 26%.
Looks like there is a immediate impact to the stock price.
CCME - Earth gravity theory can explain it all.
There are many theories on the street - rational market theory, irrational market, random walk, etc.
None can explain CCME's behavior.
So I invented the "Earth Gravity" theory by creatively applying Newton's physics law to the stock market.
Theorem:
"When observed, favorite stock such as CCME will continue its movement toward the direction of earth gravity."
Corollary:
"The object will change its direction only when not observed."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49193006
PS. Got to have some dry humor when stock is down.
CHME and YUII
I did some googling on rADTZ. It is probably an old topic but I still find it interesting that rADTZ has usage in chickens.
"a separate study found that a breeder farm with the capacity of breeding 50 million chickens is expected to save up to 35 million RMB ($5.1 million) in costs through using rADTZ."
Maybe YUII and CHME can partner up.
-----
China Medicine Corporation Receives rADTZ Feasibility Report from the Feed Research Institute, Chinese Academy of Agricultural Sciences
7/16/2009
GUANGZHOU, China, July 16 /PRNewswire-Asia/ -- China Medicine Corporation ("China Medicine" or "the Company"), a leading distributor and developer of prescription and over-the-counter pharmaceuticals, traditional Chinese medicines ("TCM"), nutritional and dietary-supplements, medical devices, and medical formulations in the People's Republic of China ("PRC"), announced today that it has received a third party feasibility report on recombinant Aflatoxin Detoxifizyme (rADTZ) from the Feed Research Institute (FRI) of the Chinese Academy of Agricultural Sciences (CAAS).
rADTZ is an innovative new product that has the potential to detoxify aflatoxin (AFT), a potential cancer causing agent, in food and feed when used as an additive. The report showed that experiments on baby chickens and piglets were positive where usage of the rADTZ enzyme in animal feed showed efficacy. Specifically, baby chickens and piglets experienced healthy growth in body and organ weight with rADTZ treated feed. In addition, the immunity system of animals in both working groups increased substantially, helping to decrease mortality rates. Based on the documented benefits of rADTZ, a separate study found that a breeder farm with the capacity of breeding 50 million chickens is expected to save up to 35 million RMB ($5.1 million) in costs through using rADTZ.
"With this feasibility report, we have begun trial production of rADTZ and trial sales will follow very soon in China," said Mr. Senshan Yang, Chairman and CEO of China Medicine Corporation. "We are also eligible to apply for a product permit for rADTZ from the Ministry of Agriculture in China and expect to receive it in approximately six months. With the product permit, rADTZ can be sold nationally in China. We expect rADTZ to achieve net margins of 70% in 2009. We are remain very enthusiastic about the prospects of our novel product and believe rADTZ will become one of the most important contributors to China Medicine's growth in the coming years,"
CHME $3.8, up 7%.
In massive breakout mode. SAR trigger & SMA20 breakout yesterday. And breeze through SMA50 today.
Will it fill the gap at 4.30?
OT - GS
This will be my first and last post regarding GS since it is technically off topic on this board.
I am kind of puzzled by the support here for GS. Is that because GS is just doing "god's work"?
The SEC may or may not have a case due to technicality in this particular situation. But State of New York should certainly file an illegal gambling suit against GS. After all, things like CDO are pure gambling tools invented by GS and others. Last time I checked, it is illegal to start a casino without a gaming license.
CHME $3.4, +3%.
SAR Trigger today.
CNAM option pricing - volatility
Finally got a chance to calculate the CNAM's volatility.
At 4/20, the stock volatility is 85.3%.
In comparison, the S&P's volatily is 8.8%.
Option value is $4.56 if the current price = 6.9 (the share price at the time of announcement.)
Option value is $3.96 if the current price = 6.17 (yesterday's close.)
option value is 4.56
End date 4/21/10.
Historical Volatility
10 Day 134.8%
20 Day 151.0%
30 Day 158.5%
60 Day 145.8%
90 Day 145.8%
48 Day 145.8%
I used a downloaded spreadsheet from a Yahoogroup called stock_analysis_group. You can join the group and download the sheet yourself. You can also send me a PM and I will email to you.
CNAM - Option value.
I would love to pay $0.27/share for a 5-year option to buy CNAM at $7.5. Actually, I am even willing to pay 4x of that. Are you willing to sell it to me? (We can start with 100 contracts.)
PS.
CNAM has a very high volatility. The volatility will increase the value of the option significantly.
I do not know CNAM's volatility, but it should be similar to RINO (51%) or YONG(57%). If volatility = 51%, CNAM's option value = $2.02.
CPQQ - Gary, can you share more insight from Yicheng's DD?
I have some CPQQ and plan to add more.
Housing - Justin, I could not agree with you more.
One major difference between China and US' response to the housing bubble: US is primarily depending on Fed to fight bubble. Fed basically has no tools except increasing interest rate. While Chinese can choose among a wide range of policy and regulations: raising the rate, raising the down payment, starting a tax for all properties, starting a property only for second or third houses, or put restriction on non-locals. It is even conceivable that Chinese could also designate bubble zones, and apply the policies inside the zones only.
US only has a hammer for every kind of nails while Chinese response can be more surgical and laser focused.
CHME - agreed.
This is another Chine pharm stock that was beaten down. I was accumulating it.
LTUS - 1.32 real time, up 29%.
There is one 1.39 spike.
ZSTN - Traderfan, thanks for the information.
With the current PE of 5.9 and a forward PE of 4.8, I am pretty comfortable to hold it long term. I will be adding to my position if it goes lower.
As for the auditor. The change of auditor is kind of tricky at this moment due to FUQI accounting issue. But ZSTN's move seems to be for the better. They left existing auditor, little known Kempisty, for a much bigger and more reputable firm (BDO, sixth largest accounting firm in the world). The 8K states that there were no disagreements between Kempisty and the company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.
ZSTN - Just took a starter position.
Yahoo shows a trailing PE of 5.9 at PPS 6.7. Can you point me to any DD?
The chart is very weak, though. It is trading outside of the BBand.
CCME -0.12: Unperturbed by market's up/down. CGS's number 1 pick continues its single minded pursuit of earth gravity ever since the earning report.