Empire Building 101
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Traderfan, Don't get me wrong as I believe you are a very good stockpicker. You have good instinct along with being very partial to details in 10k, 10q's, and this is the differrence between successful investing and haphazard results.
The credit you have failed to acknowledge is sales are growing rapid in the divisions they have spent enormous amounts of capital at the tune of well over 200% and 300% in the last Q. You had no problem of complaining and griping about this money being spent but atleast give credit as it appears these divisions are poised for huge growth.
As far as the warrant dilution and convertibles we did know that. But realistically we did not do the .43 last year because they were not included( bring that out when doing the comparables). So in essence with what we did know we should have included these warrants in the computation to get the real numbers. Had we done that each Q would have shown less PPS last year and not flat as stated this year. However. that's not how it is done and we both know that.
These are the facts and that's why the share price lost 50% in the last few months.
This is total crap and you know it. The whole space is down almost 50% and some much more. CCME is down 35% with great numbers along with a whole bunch more. JADA did not have a good Q and they are down 70%. UTA is down 50% and the list doesn't end their. I
I make it a point to be realistic and yes I have high expectations here. The space we cover is down because china microcaps are out of favor period. The fact that management doesn't tell everything is probably a good thing as so many jokers are sue happy. SIAF for whatever reason did not file when they said they were going to(legimate or not) and then joenatural is suing and getting his lawyers yada yada goin own them.
I do understand that your frusterated also but I think you have unduly critque ckgt.ob much more than many others. Why not bash ccme. uta, csgh? CHGY went over $4.0 and currently at $1.50 why?
Regardless I appreciate your responce and still have the utmost respect for you and your opinions.
Steven
In all reality pappy is much more conservative than I am. Which nobody mentions is that we have 4 million more shares o/s than last year that were not included because warrants were not in the money all though they were included in the full dilution. Without that we would have had .09 vrs .07
IMO, we see yet another patent application soon. This is IMO and what I believe the R&D was all about.
I'm looking for blowout earnings Q3 + Q4 with cigs and feed going thru the roof and pappy to be vindicated. My actual estimate is now .49-52
Again, I believe 2011 come in at $1.00+ a share.
Traderfan you just don't give this management the credibility they deserve. You along with many moaned about the money spent but as of yet have not properly gave the credit due.
We are now positioned to go full throttle ahead as management clearly showed the direction they are moving.
I too, think .58 is high. Because of the dilution that is now part of the computation and the higher tax rate I'm inclined to say we come in slightly above last year on a share basis. Although I do believe on net income we continue at a mimimum of 30%+.
Now as far as sales taking off parabolically I believe is a given! That's right a given. Don't forget we just got out product into a 3,000 store chain.
However, I believe net income doubles next year as SGA drops on a margin basis and sales rachet forward at a 50%+ clip. Traderfan, their is very few more upbeat than me on this companies future.
Nobody mentioned that CKGT had an R & D expense. What's that all about?
Put your money in the smokes Pappy(ckgt.ob). I've been telling ya this is going to be huge. We will probably see over $1 Mil in q3 and possibly a whole lot more. We are currently at $2 Mil run rate and close to $3.5 if you annualized last Q.
Don't forget feed is on a tare also. Up 300%+ which you are well aware of will probably continue to grow for quite some time. My guess is they do over $5 Mil this year.
Then you have beverages which are continually growing at 50% with a history. Now going to pass up neutriceatical(sp).
Not to mention neutraceaticals(sp) did over $10 Mil last year and beverages will pass it up this year. I believe that both cigs and feed also pass up netraceiticals next year. I still believe that we get a new product release before Q3 is announced.
We will get the net income up considerably from last year to this year but unfortunately we have 4 million new shares and increase in taxes. We are kind of like cpqq but as you said along time ago 2011 could very well be over $1.00 a share which I expect.
I still believe this is the most undervalued stock and yet to sell a share. Fortunately their isn't many which believe as I do thus giving me more time to accumulate.
Steven
I like the fact that they are starting to focus on higher growth lines with good margins.
In the last year they have pretty much discontinued packaged foods and now possibly raw and intermediate products. This alone with the fact that sales are up nicely at 45% this year is amazing.
They are not growing sales with no regard to margins and the true potential growth.
My only disappointment with the company is lack of info.
They now have cigs, beverages, and feed growing rapid with neutriceuticals(SP) possibly hitting a headwind but still very profitible.
CKGT.OB is undoubtedly one of the most undervalued stocks bar none and that includes CCME which I believe is an easy double within 6 months.
With sales down from Q1 on a percentage basis and the fact that they have a much better distribution of product reaching more consumers I strongly believe we will see 50% plus growth this year.
I believe sales will come in something like this 1)cigs $3.8 MIl
2)neutriceuticals $11.2 3)beverages $14.0 Mil 4)raw and intermediate $2.5 Mil 5) cactus feed $5.5 MIl
Note: this is in line with managements $35Mil in sales and very conservative with regards to all categories. I pretty much wrote off raw and intermediate as a discontinued product line. However, they are so tight-lipped you never know!
Traderfan the numbers were not as good as I expected.
However CIGS and PIGS is where they wrote out a blank check. The direction is becomiing much clearer now.
They are obviously getting rid of some low-margin product lines which articially boosted Q1 sales.
Management obviously felt growing feed business at a rapid pace definately outweighed the lower margins.
Then you have cigs which I believe is going to push this company into a different leaque almost overnite. I still believe they could hit 4-5 mil this year.
Now you have beverages growing at 50%. Kind of hard to find any fault with managements approach.
From 2008 until yearend management has grown from $14Mil to well over $35 Mil in 3 calendar years.
Total assets went from $11Mil over $40 Mil wirh a strong 2nd half coming.
My net income per share was .08-.10 was high but I somewhat expected this could come in low because their was costs involved with new distributor which should have showed up in SGA.
Don't forget taxes increased 10% and shares were also up 15%. IN the nutshell a very good QTR.
Should be hearing about new product releasee next month or maybe sooner!
Did you sell or add? I'm prunnung other stocks to ad here as I believe cash flow is going to go through the roof!
The sums are now worth much more than the parts here.
The beauty is dilution is about done. I believe we have 24.6 Mil total o/s. It looks like cigs and pigs are leading the way here.
Revenues in at $8.7 MIl.
When did the 3000 stores start carrying ckgt product? i totally forgot about that. We could see some huge growth increases!
275k is ok with me but I look for a blowout expectations going forward wih cigs. It may take 1 year to totally ramp up but the expectation is huge. They finally highlighted cigs on their web site getting lots of hits.
Anybody have any revenue expectations besides me? $9.5 Mil would be excellent revenue increase and keep us on track for the 50%+ revenue increase I expect this year.
Sure would be nice to see $10Mil revenues for the Q and 400K in cigs! Anyone expect this for the Q?
Relax stockm0n all is well. Any guesses as to what cigs do this Q?
I'm still thinking 300K and who knows maybe 400k. They have a 2.1 Mil contract for 1 yr.
Why else would you buy a cig manufacturer for $5.1 Mil. I;ve had friends try them and overall a positive responce.
Maybe 500k? If so, it my be time to use my line of credit!
I think $9.0 Mil + is in the bag for the Q. My projection is $10 MIl which could prove high.
Net Income. 08-.10
No run(LOL)!
Gonna stick my neck out here...no less than 300k for Q2 in cig sales.
Would be happy with 250k as we only did 225k last q hadn't they invested $5 MIl.
Wonder if we would see old time highs with 500K in cig sales?
Guess I need to quit dreamin and be happy with anything over Q1?
Overall look for everything up with cigs smokin. Not sure about earnings this Q as we have been hit hard with taxes and more shares o/s.
Traderfan, why would they dump for a loss. IMO, they peacemeal shares in slowly. Afterall they are no different than us, and that is to make money. Look for feed division especially hog to put out very impressive numbers. Still expect $9.5 mil in revenues.
Don't be to sure of that. I believe they are already in the process of making this a reality very soon!
Management filed an S-1 Friday afternoon. Looks like the selling will happen soon. Unless something huge comes out obviously selling pressure will begin as soon as the registration is finalized. We had over 2 million warrants excersized and sold and now this. Will we ever get any traction here?
My understanding is that hog feed is still the golden goose here. As far as the price of a pack of smokes I thought you were in China...please find out what they sell for and let the board know. This would equate to about 13Mil packs of smokes. I believe they are still going to outsourse some production but not 100% sure of this.
As I have stated in the prior post my expectation on feed is the driver for q2 and naturally beverages just keeps chugging along with 40%+ growth.
Please check out the price of smokes in China.
Steve your statement pertaining to the expiration of the prior contract is correct. This is what I was told. You are probably correct as far as getting suppliers and new equipment taking awhile. Then again 6 months really isn't that long. Still very optimistic with very high expectations. Q2 will give us some answers and realistically very good ones at that.
I put all my available current resources in a 8 unit apartment building. Being retired I need diversification and with foreclosures still exceptionally high it just seemed like a good move. Already cash flow positive. Bought with no money down and 3.5% interest although I stuck 20k reverbishing.
As for buying more ckgt traderfan I believe you will be handsomely rewarded. I have not sold a share and added a few shares in the $1.30 range.
With a few people headed for China very soon it is my wish that somebody would actually visit the company uninvited and get us an indepth on site visit. Bradford & Gary are you listening?
All in all more optimistic than ever l-term but not really sure which way we go in the s-term. I believe cigs will be very successful. I've been told by smoker friends they taste alot like Marlboro which will certainly garner attention.
Good luck Traderfan and with all my trading account in China microcaps I'm currently down 50% this year although I was up close to 1900% last year. Current holdings siaf.pk csgh.ob srry.ob snbp.ob and ckgt.ob
IMO, we see 9.5 Mil in revenues. However, with a higher share count, higher taxes, and last Q's huge increase in a particular low margined business, net income is up in the air. Although we will see net income as a whole up atleast 35%.
What we do know is the expectation of continued increases in feed and beverages. IMO, they continue growing nicely. Of caution is the beverages which management made vey clear in the last PR of increased marketing.
Like you Traderfan I am very perplexed at the continued selling. In the next 6-12 months anything can happen but in all reality they have 3 divisions growing very nicely without cigs. Knowing this reaffirms my belief we see much higher prices at some point.
With cig manufacturing not to happen before year-end I will conrinue to hold my shares and re-evaluate on putting more funds in as they become available.
Volume above normal with 4 hrs left. I like the fact that the volume is without news.
I agree but obviously this is going to take longer to play out. Unfortunately they will begin production in q4. They felt they needed that much time for the transition plus they still have a contract.
I would suggest that the ramp begins next year although cig sales will increase incrementally.
Look for hog feed to put up some very good numbers in q2 going forward. I believe feed is going to show 100% growth this year wih very good margins. Guess we will all know how this pans out in Aug.
My guess is .09 on the low side with .13 on the high end. That is probably close to dreaming but you never know. I was very close on my revenues for Q1 and believe they come in at $9.5 Mil
In all reality we see $9.5 Mil in revenues with net income in the .08-.10 range.
Any thoughts on q2 cig revenues. I'm going to guess 300k and believe me it is only a guess although management did say revenues would increase.
Looks like volume is really picking up. Sure wish it was me buying! Wonder who is selling???
Excellent buy Gary. It is my opinion that we have seen the lows in the Chinese microcap space.
With that said my expectations are much higher than a double to $2.50 as I believe cigs will add extradinary volume increases next year. That doesn't even include managements expectation to grow feed to 1% of the market in 5 years. That alone is 10 times revenues in 5 years not to mention beverage which are growing over 50%.
This is going to be a monster just like UTA was 3-4 years ago. Mark this post!
IMO, appearance is everything along with marketing. If they do the right job of marketing in Asia and "other" regions this will draw the attention we need.
Now if Zack and Glen could do a nice write-up on their websites it might just draw a few new buyers as us l-term holders are tapped out(LOL)!
This is all great news. IMO, anyone with cash is going to be very disappointed if they don't buy at these prices in the expectation it is going lower.
That is about the responce I've received. Out of 19 cigs only 2 negative. You only need 1/100 people to get 1% of the market. Again, I think this is going to be huge.
I also believe they are going the right direction in marketing a healthier cig. Originally I was disappointed but not anymore as they will create a niche which could more than double sales very quickly.
Look for this stock to get traction regardless of the market. Also look for some very nice write-ups soon!
On a different note, evidently you've made some inquiries after they announced their purchase plans of the cig equipment and got some clarification that you were bullish about--apart, that is, from your normal bearish stance on the company! Yet I don't recall you posting anything on the boards about such info. Did I miss it? Or did you, as it seems, think it was more appropriate to let such information come directly from Hawk rather than you? If it was the latter I certainly can appreciate that. But if you were holding back so as to not be unduely optimistic or some such thing,
I've never been bearish on the company as this is my #1 holding.
Her name is Amy Lin and this is her e-mail amy@hawkassociates.com
The key is asking the right questions. I did not ask about uplisting as that is not a primary focus on my part. However, I did ask alot of questions pertaining to cigs as I am very confident of their future.
I do not have a premium subscription so if you want you can e-mail me at StevenRisk@yahoo.com
To begin with no reason to be sorry. You have very valid points but you must take the time and be open-minded to arrive at some type of conclusion. After that get ahold of Amy and ask her the same questions. Paying $5.1 Mil to buy a cig manufacturing plant makes no sense when you already have the production manufacturing outsourced. With $500k in sales in the first 5 months with decreasing sales for Q1 appears to be very stupid to put it frankly. From this I came to the conclusion either they were having problems getting product from the outsourcer to the customer or the demand just isn't their. Common sense tells you they aren't spending $5.1 Mil with no demand. Next thing that obviously came to mind was the ability to expand into Asia from this acquisition. This is a no-brainer especially after receiving the cigs and having a very favorable overall rating. Out of 20 cigs only 3 did not like them.
I asked Amy some very direct questions about the cig business and was very pleased with the answers. The only thing I never understood was the existing brands. As far as not marketing these smokes I WAS negative but aftert thinking this over I'v very pleased with their direction and marketing a "safer cigarette". They will create a "niche" market much sooner than most expect and expand at an accelerated pace as plans are being implimented.
Let's not forget about the feed and beverage division. This stock has more potential and safety with the least bit of competition of any stock I know of period.
Good luck Steve and I would strongly recommend you address Amy with the same questions you previously asked....StevenRisk
Steve if you have time get ahold of Amy at Hawk Assocites and she will forward any quesrions to management. It takes awhile but she does get back with answers. You won't be disappointed. I'm long and very very bullish with ckgt especially cigs!
Sounds like it is time to buy...oops I ain't got any money. I can't believe the carnage is continuing.
On the other hand, other than earnings forcast which historically never have been forcasted to my recollection I think the company is doing a wonderful job of timely PR's.
The problem being the clarity. One could have easily expected revenues from existing brands. This did excite me a little. Seems they could have expanded a little after all $5.1 Mil for an annualized rate of sales of about $1.0 Mil so far hardly justifies the purchase.
Traderfan you have definately been right a lot more than wrong. That my friend is a compliment. As far as the $1.40 you were dead nuts on target. Unfortunately today I had no funds available which totally sucked.
As far as putting a spin on the news today IMO this is exactly what you did. The dilution is minimal in lieu of what ckgt.ob has established and will accomplish in a very short time in the cigs business.
What I like about this management is they are very focused. They have diluted about 25% since 2008 and I believe sales will more than double within 3 calendar years.
I believe we will see the .10 for Q2 that someone had posted even with the dilution being factored in. This stock has been and probably will continue to be punished in the s-term but after Aug.15 it is onward and upward.
Not only will the news continue to get better your going to be in for one wild ride as this whole cig thing is much better than most believe!!!!!!!!!!
It was mostly positive. My father-in-law who has smoked Pall Mall straights for 50+ years liked the taste but did not fulfill his nicotine addiction. A few others actually said they would buy them if they could. Overall mostly positve.
I want to reiterate the fact that they are not currently going to sell existing brands from the acquisition. I've seen more communication on this and I was told from managements mouth this is currently not in the plan now. I expect some very very good news with follow-up on cigs as the growth will put some serious eyeballs(money) on this soon.
Looks like the market is looking at this as a negative. But why?
I know Traderfan likes to put a spin on everything. Wish I had some cash as this is just plain crazy.
Why would people sell with the CEO's comments?
China Kangtai CEO Jinjiang Wang said, “This acquisition enables us to produce cactus-based cigarettes in our own facilities, which will provide us with stronger cost control and production flexibility. By leveraging Dadi’s brand name and sale channels in The Philippines, Taiwan and Myanmar, we can expand our cactus-based cigarette market sales to Southeast Asia, which we expect to help us significantly broaden future sales. We also expect this acquisition to be accretive to earnings and to significantly increase shareholder value in the long run
As far as existing brands management has no intentions of selling anything but cactus smokes at this time. Sure would have been nice...never hurts to dream.
Received cigs today in the mail. Unfortunately they only sent 1 pack of the low nicotine smokes. Warning is in English. It says'
Smoking Is harmful to Your health
Quit Smoking Early Is Good
For Your health
It says they are made by China Kangtai Cactus Biotech Inc.
Supervised by Asia Tobacco (Macua) Hongta Cigarettes Factory
Will be giving a few out today at retirement party and will get back with board as far as taste etc.
Received an e-mail stating my sample cigs have been sent. Anybody else get the same e-mail?
Looks like q1 in cigs was but a snafu.
IMO, p/s will be equivalent of 1 or less. So in essence a minimum
of $5 mil additinal annual sales. Also IMO, more like $10 mil or
more annually. Looks like the expansion is going to start albeit
acquisition much quicker than we expected. With this acquistion
one must ask if the 66% growth demonstrated in Q1 is sustainable
or could this increase sales further after this acquistion?
With Q1 bombing in cigs is it possible the outsourcer could
not meet demand?
Traderfan, I'm not sure about the financing(dilution) but IMO,
current cash on hand q1 and cash flow for Q2 they should have
enough cash available although very tight. Add in cash from last
q and assume same cash flow from q2 09. They could have 6-8
weeks before the final payoff plus the acquistion #'s.
Next we can probably expect margins in cigs to increase. IMO,
this should be around 40%. Traderfan we could see dilution, no
argument but the future is becoming clearer and clearer.
I'm glad this is my largest holding as this story unfolds
Well looks like we got news but a little latter than I expected. I was looking for news last week.
IMO, things are going much better than many expected with cigs. If not, why manufacture your own?
This will probably raise margins over 50% with cigs.
I still find this stock as one of the most undervalued in lieu of product launch, growth, and reccession resistant.
My expectations for earnings are still MUCH higher than most with an increase of 30& over last year and over $1.00 for 2011.
Certainly can't hurt to dream...sure hope cash flow is suffucient as they put the picees together here.
For the patient investor the potential payoff is HUGE.
I know traderfan I sound like a broken record(LOL)!
Management please don't dilute.