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I guess they are the "sell on the news" crowd.
AWRCF--I guess gaps are destined to be filled. Maybe it can climb back into the 6's this afternoon. The broader market isn't cooperating at all.
AWRCF receivables--For the first 9 months of 2010 they had $325 million in sales and had $110 million of receivables at 9/30 which would equate to about 90 day payment terms. They are managing receivables more carefully than they used to which is particularly important in more of a commodity business which isn't high margin (gross margins around 10%). If you have to write off a bad receivable it wipes out profit on sales that are 10X of the write off so can screw up earnings pretty quickly. It has been a while since they have written off receivables. I don't expect an issue, but it's always possible.
AWRCF--Before open on Friday announced approval for uplisting to NASDAQ which should happen this week. Given NASDAQ "blessing", fraud risk for this wire manufacturer will probably be perceived as low by investors still looking to play growth in China (as well as Thailand, Singapore and Australia. Earned .85 diluted for first 3 Qs of 2010 and will report full year in a few weeks which I'm guessing will be in 1.05--1.10 range. Although they are "shy" about guidance given volatile copper prices, the high copper price so far this year will help revenues and, to a lesser extent, earnings. The share price closed at 5.50 on Friday, and, I think, has more room to run this week especially since the float not controlled by the four largest SHs is only about 1 million shares. This is my largest holding which I have been posting about for years, so I'm excited finally to see it get its day in the sun.
AWRCF--Regarding the float, there are 13.8 million total shares so 15% would be about 2 million in the float if you exclude the parent and MSD. I own 470,000 and am not a seller until at least double digits, so you could probably take mine out too. I think there's a hedge fund that also owns about 500,000 shares, although I'm not sure what their hold/sell intentions are.
AWRCF--First they uplist, then Burp pumps it all day!! Thanks Burp!! What a wet dream for me! I started my position in 2003, and have been building it since. It's my "Get rich really slowly" strategy. This stock has flirted with the potential for a double digit share price for years. Maybe it's finally coming.
AWRCF uplisting--There is a God, and he works at NASDAQ! My biggest position which has taken a beating in this CGS down draft. I'm disappointed that the volume so far hasn't pushed the stock to at least over 5--maybe after some recent buyers of really cheap shares flip out of their positions. If my understanding is correct, they still only need to report twice a year, and their 20-F should be filed in the next two weeks which should show 1.05-1.10 diluted EPS. They may also provide some kind of 2011 guidance. The stock isn't dirt cheap in this beaten down PE comp environment. However, the share price probably won't be weighed down by much fraud risk since it was just been blessed by NASDAQ, so if they give strong 2011 guidance and the broad market doesn't tank, I can see the share price doubling by year end.
LIWA, acrazjo, I hope you're right that it has bottomed out, but you don't give any rationale. A CGS down 4% on high volume these days could be a lot of things other than capitulation. It could be a foreshadowing of bad news and/or short attack. Every one of your posts about LIWA is just a thinly veiled pump with little compelling rationale. IMO you're hurting perception of LIWA on this board more than helping.
HRBN--Multi day rally fading and still no announcement. Still some volume in the out of the money April calls that expire next week although that's quieting down some. If a deal doesn't come together and the share price tanks back to the low teens, it won't be the rally trigger we're looking for.
LIWA--Look at today's chart. Extreme action on no news. Could be the company is buying shares and pushing the price back up. There was either some heavy short selling earlier or long sellers desperate to get out.
LIWA--Getting crushed today. Is the NASDAQ short data at 3/31 being released on Monday? Looks like short interest will climb significantly for LIWA. If so,that's not a great leading indicator. My Nov calls have been decimated. At least they have a few months to recover...
long post--skip unless you care about AWRCF
AWRCF--They are in the process of uplisting, but it has been delayed beyond their original targeted date so who knows when/if it will happen. It could be very soon as they have been working hard on it for months now, but there has been no word from the company about it recently so hard to say.
They make/sell wire in China, Thailand,Singapore and Australia. They did .80 EPS for the first nine months of 2010. Their Q4 and annual results aren't late as they are only required to file every six months under their foreign issuer exemption. They should be out by May 15 at the latest. I think the full year will be 1.05-1.10 and rising unit sales and copper prices will make YOY revenue comps very attractive.
They are Taiwan based because their parent company (75% owner) Pacific Electric Wire and Cable company ("PEWC")was one of the old line blue chip companies listed on the Taiwanese stock exchange. The parent manufactures in Taiwan and it formed AWRCF to operate in the rest of Asia. AWRCF IPO'd on the NYSE in the mid 90's but got demoted to the OTC when the Asian financial crisis in the late 90's drove the share price down below NYSE requirements.
Around 2001 the parent company, PEWC, was taken over by a group of Taiwanese banks, because it had been overlevered and looted by former executives. PEWC was kicked off the Taiwan stock exchange and now the shares trade on Taiwan's equivalent of the pink sheets. To this day, PEWC management has to run major decisions by this bank group including decisions regarding AWRCF which is considered to be the "growth" part of the company and the bank's hope for getting paid back.
Going back 4-5 years AWRCF had separate fraud issue, where the former Chairman sold a 20% stake to an affiliated entity. All of those people are long gone now, and I trust existing management whom I have met several times. I think they're honest, and think having the banks watching them isn't all bad either. However, PEWC controls AWRCF with their 75% interest so minority shareholders don't effectively have any voting rights (which fails one of Rames' tests).
I have accumulated my position since 2003 and am one of their larger minority shareholders with an average share cost of approximately $2. The largest is MSD Capital (10%), Michael Dell's family office who has a shareholder's agreement that required them to uplist by Feb 2011 or he could put the shares back to PEWC at a price in the 4's. Until this recent swoon, that put right didn't seem to matter much, but now the put price is close to the current share price.I don't think he'll put unless the share price completely tanks.
AWRCF--Skier. Please take a position the size of your others. That alone would double the share price.
Skier1-AWRCF is my largest position so would be very interested in your take.
FSIN--I bought some for my sister's portfolio a while back at $9 as a "value play" which hasn't panned out so far. I don't put much faith in the buy out offer at $11.50 but who knows. One note of caution is that unit sales were basically pretty flat in 2010 compared to 2009--they showed revenue increases basically because of the rise in copper prices. As China came roaring out of the global recession in 2010 vs 2009, it should have been an easy comp. Since the merger, part of their production and revenue is US based, however I think the Chinese part has had flat unit production as well.
HRBN--Trading up again today with continued volume in April calls which expire next week. Interestingly, there's volume in the $22.5 calls which are more than $2 out of the money. That's a pretty aggressive short term bet in a horrible CGS long environment for a company that's been heavily shorted, uses Frazer Frost as auditor and in same industry as recently discredited CELM. Despite no going private news yet, some must be betting on a near term announcement.
NEWN--Given the filing, why isn't it trading down more?
Good(albeit incomplete)summary of the recent CGS blow ups
www.thestreet.com/story/11069805/1/chinese-small-cap-stocks-start-unraveling.html[/url][tag]insert-text-here[/tag]
HRBN--Also huge volume again in April 20 calls. It's the flip side of a pending short attack when there's no news but the options volume is predicting a near term event.
HRBN--Huge volume today and still trading up. Below is post from YMB Board re rumored deal. I wouldn't normally circulate rumors but recent action is just begging for a punchline:
"Here in Hong Kong, the word on the street is that Yang along with Goldman Sachs and China Dev Bank has agreed to a takeover bid of $26/share.
All DD and negotiation is done. Signature is this weekend. Announcement on Monday or Tuesday."
HRBN--Blowing the doors off again today. Up over $20 on high volume both in the stock and near term calls. If there's no announcement this week, I will be really surprised.
DEER--Gapping down big to new lows today. I guess the litigious, chest pounding, "I'm not a crook!" strategy isn't paying off so far. Even if they filed the lawsuit intending to really pursue it, I think it's a stupid strategy because it further highlights the short claims and gives them extended life.
LIWA--Post from YMB may explain its recent decline before bounce today:
On March 17th, the day the stock started to drop, Lihua filed a 424B3 for sale of 145,000 shares by Samuel May.
With such a small amount of shares traded daily this would have substantial downward pressure until the total amount of shares are sold. This, along with some skepticism of Chinese companies in general, have brought the stock down to where it is today. They filed the same 424B3 on 1/31/11 for the sale of approximately 200k shares which brought the stock from 11 to 10 shortly afterwards. These sales WERE NOT BY THE COMPANY but individual, large shareholders/institutions for profit.
AWRCF--My largest holding ran up a few months ago but lost steam when they didn't get their uplisting done by Feb 1st. Per their (filed) SH agreement with MSD Capital (Michael Dell's money), they have a two month grace period through the end of March to uplist and not trigger an MSD put right. PR today announced a new outside director to replace insider which looks to be to comply with a higher exchange requirement. Could an uplisting be announced this week?
AWRCF--My largest holding ran up a few months ago but lost steam when they didn't get their uplisting done by Feb 1st. Per their (filed) SH agreement with MSD Capital (Michael Dell's money), they have a two month grace period through the end of March to uplist and not trigger an MSD put right. PR today announced a new outside director to replace insider which looks to be to comply with a higher exchange requirement. Could an uplisting be announced this week?
HRBN--The stock isn't cheap yet people are buying April calls? After the initial announcements, all of these going privates have languished on no news so it doesn't make sense to buy a three week window on a hunch. I'm guessing some internal timetable was set to finish valuation work and make announcement by end of Q1. It could be an impetus for the CGS space if a Frazer Frost audited company got the backing to go private.
HRBN--Don't have a position currently or sense the Board has much interest in trading this one. Nonetheless, it's worth noting it has traded up again today on good volume continuing a recent tear. Interestingly, there has also been more volume today for the April 20 calls which expire in less than three weeks. Perhaps the stock bounce is just short covering as they move to more fertile ground, but the near term call activity would suggest somebody thinks more specifics about the going private will come soon. By contrast, FSIN, another going private candidate, has gapped down today which suggests their deal isn't rumored to be on track.
HRBN--Pushing HOD on good volume for the shares as well as nearer term call options. Somebody smells a more specific going private announcement. The way it has traded this week, I'm guessing the short position has declined.
ZSTN--Whether it's a fraud. I think they're are shades of gray on this issue. Reporting nonexisting revenues and cash is outright fraud (RINO and maybe CCME). Buying real estate at inflated prices and likely somehow benefitting through some ownership interest or "commission" on the sell side (ZSTN and DEER are suspect here)isn't as bad but still is fraudulent self dealing. In the U.S. executives just grant themselves options and are less likely to engage in self dealing affiliated transactions. I think ZSTN has a legitimate business but is tarnished by that questionable real estate transaction.
Paradoxically,I think institutional ownership may actually be hurting some of the CGS names right now until the end of March (e.g. GFRE, DEER, LIWA, CBEH, LLEN, ZSTN, YONG). They don't necessarily want to be associated with the CGS space or losing positions in their end of March quarterly reports, so they may be dumping them so they don't have to list them in their end of Q holdings.
GFRE--I haven't seen any 2011 guidance. They did say in their recent earnings PR that the price on bromine (which is more than 70% of their sales) has increased 18% in March as compared to their Q4 average selling price. Hard to know if that holds, but should at least drive higher revenues and earnings (from higher margins) in Q1.
Although the short interest has declined from its January peak, there's some April and May put volume this morning which is a little spooky given recent history in this sector. Its hard to imagine worse selling execution than this big seller has shown in the last few weeks putting the stock price in a free fall. Is it possible the seller also is buying puts to mitigate that impact?
LIWA--I bought November 10 calls. That gives them some time to finish their expansion and report three more Q's of earnings. Certainly the expansion represents some execution risk.If copper prices crash, their revenue comparisons will suffer. I think they also may have a customer concentration issue, although their products are very basic and have broad markets. Overall, I think they have made one of the most earnest professional efforts to show they're real: good numbers, audit completed on time with good auditor, NASDAQ listed, good guidance, share buyback they have actually begun to execute, in a "real" industrial business undertaking a verifiable significant expansion that costs millions (which is harder to fake). I also think their PR's are among the most thoughtful, professional and well written which engenders additional confidence. Of course, they could still have a legitimate growing business (like DEER) and be self dealing scumbags (like DEER appears to be), but I think its worth the risk given the potential upside. One thing I have changed my thinking about recently thanks to reading this board, is not to be driven so much be super low PEs which are too often a mirage. That said, at today's price the forward PE is approximately 5 based on guidance. If they rise above the CGS muck in the weeks/months ahead, I think the price could double.
CCCL--Who are their auditors?
AWRCF--As the world equity and commodity markets were sliding, like an oblivious child happily playing alone on a crowded playground, AWRCF was up 6+% as someone seemed to be confidently building a position. I hope the bullishness is a precursor to an uplisting.
LIWA--I don't own it but was impressed by their earnings PR which was thoughtfully written. The GH price target increase makes clear they still haven't repurchased any shares despite announcing the program in January. I don't get why you announce it and don't at least buy some, especially when earnings news has the potential to drive the stock up. Are there periods pre earnings when they can't buy back? I couldn't find the prior short attack piece. Could some one please provide a link? Thanks.
CSR--Joe Natural. Any thoughts at this price in the low $4s? I was tempted until I looked at the financials and saw for each of the last three years account receivables for the year were 2-2.5X net income and have balloned to an aggregate $434 million year end 2010 vs. total revenues of $685 million and $77 million in net income. Seems weird that AR could build up for years like that and not have to be written off when it gets too stale. As a result they were $178 million cash flow negative for the year. On that operating model, the faster they increase revenues the more they burn cash! They could have already burned through much of the $65 million in cash they had at year end which could mean further dilution or more debt.
CCME--Given recent patterns in heavily shorted Chinese companies, it wouldn't be surprising to see another "attack" piece next week.
HRBN/ABAX--
One of the founders of ABAX was at Citadel and made Citadel's convertible loan to HRBN a few years ago (similar to Citadel's loan to CSR). The docs on that loan were extensive and reflected in depth due diligence on the company. So ABAX knows HRBN and its founder very well. I think their announced position makes it increasingly unlikely that there are major irregularities at HRBN which would either tank the stock or thwart a going private transaction. Unless we have another capital markets meltdown or the stock runs up too much before the founder can get his deal done, I think it's only a matter of time before that deal closes. I have March 20 calls which have been withering as the time premium erodes. I'm almost sure a deal won't get done by then. The question is whether this ABAX position on its own (or combined with a near term PR which engenders confidence) will drive the stock much over 20 by then. It's possible especially if this development finally starts to drive some short covering.
AWRCF Correction--I was reading Charoong's financial statements wrong and looking at the unconsolidated numbers instead of the consolidated numbers. They actually earned 28 cents per AWRCF share in Q3, more than the 27 cents AWRCF reported in Q2. Unless there is a huge write off for their other operations, they have to report well over 40 cents next week and maybe even 50 cents. With an AMEX listing this should easily climb to over $10 in the next few weeks.
AWRCF Correction--I was reading Charoong's financial statements wrong and looking at the unconsolidated numbers instead of the consolidated numbers. They actually earned 28 cents per AWRCF share in Q3, more than the 27 cents AWRCF reported in Q2. Unless there is a huge write off for their other operations, they have to report well over 40 cents next week and maybe even 50 cents. With an AMEX listing this should easily climb to over $10 in the next few weeks.