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US Listed Chinese Companies Will Out Perform Market According To First Wilshire Securities Portfolio Managers
On 8:46 am EST, Wednesday November 11, 2009 Inc.Claymore/Alphashares China Small Cap
67 WALL STREET, New York - November 11, 2009 - The Wall Street Transcript has just published its TWST Small Cap Value Report offering a timely review of the sector to serious investors and industry executives. This 47 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Small-Cap Value - Capital Preservation - Sovereign Bonds - Precious Metals - Value-Investing - Companies with International Exposure - US-listed Chinese Companies - Risk Limitation - Industry-Diversified Portfolios - Long-Term Value - Micro-Cap Companies - Turnaround Situations - Strategic Buying - Fundamental Analysis
Companies include: Bridgepoint Education (BPI); Compass Minerals (CMP); Flexsteel (FLXS); Hardinge Corp (HDNG); Phillips-Van Heusen (PVH); Adobe (ADB); Affiliated Computer Services (ACS); Alliance Data Systems (ADS); American Water Works (AWK); Atlantic Tele-Network (ATNI); Celanese Chemical (CE); CenturyTel (CTL); Clean Energy Fuels (CLNE); Consolidated Graphics (CGX); Dell (DELL); Dillard's Department Stores (DDS); Drew Industries (DW); Educational Development Corporation (EDUC); First Acceptance Corp (FAC); Forestar Group (FOR); Fresh Del Monte (FDP); Hain Celestial (HAIN); Harbin Electric (HRBN); Huron Consulting (HURN); IMAX (IMAX); IMS Health (RX); Kennametal (KMT); Lamar Advertising (LAMR); NBTY (NTY); Nature's Sunshine Products (NATR); Nobility Homes (NOBH); Omniture, Inc. (OMTR); Perot Systems (PER); Pfizer (PFE); SPDR Barclays Capital International Treasury Bond Fund (BWX); SPDR Gold Trust (GLD); Silver Wheaton (SLW); Tellabs (TLAB); Temple-Inland (TIN); Tempur-Pedic (TPX); Tesoro (TSO); Valero (VLO); Verizon Wireless (VZ); Whole Foods (WFMI); Xerox (XRX).
In the following brief excerpt from just one of the in depth interviews in the Special Report , top tier portfolio managers discuss the outlook for the market for investors.
FRED ASTMAN is Chairman and a Portfolio Manager at First Wilshire Securities Management, Inc. Mr. Astman served in the Air Force as navigator of both B-24s and B-26s in World War II and the Korean War. He earned a BA from the University of Connecticut and has been investing in the small cap sector since 1962.
SCOTT HOOD serves as President of First Wilshire Securities Management, Inc., and co-manages the portfolios. He has over 15 years of experience in the securities industry and has worked as an Analyst and Portfolio Manager at First Wilshire for 12 years. Mr. Hood also worked as a Supervisory Analyst with Merrill Lynch in Hong Kong and with a merchant/investment banking firm in New York City. He received his Bachelor of Science degree in Economics from New York University. He is a Chartered Financial Analyst and a member of the CFA Institute.
TWST: Tell us a bit more about the Chinese market, because the last time I talked to you, you said that the companies you follow are in the category of under 5 P/E. Has that changed now a year later?
Mr. Hood: Actually the Chinese stock market has had very high valuations. It's the U.S.-listed Chinese companies that we were following that had low P/E. Yes, their valuations have definitely gotten higher from the bottom. I think the Chinese stock market bottomed at the end of last November, but the real gains came after March. The Chinese stocks trading on Chinese exchanges were very pricy going into this downturn and got a lot cheaper. But their valuations have since increased, and our Chinese stocks have appreciated along with them, which was nice because they didn't always move together in the past. Nonetheless, the valuations of the Chinese stocks trading in the U.S. are probably half the P/E of the Chinese stocks trading in China.
Mr. Astman: The Shanghai stock market is trading at 30 times trailing earnings and 20 times estimated forward earnings. The Hong Kong market has a little bit lower P/E at around 22 times trailing, and 16 times forward numbers. The stocks that we're in are not in either of those exchanges and trade at lower valuations of 5 to 15 times P/E. They trade in the United States on NASDAQ, New York Stock Exchange, American Stock Exchange, etc. They comply with all SEC regulations and therefore have a little more visibility and oversight to them.
Mr. Hood: The reason why there are Chinese companies trading in the U.S. is that they need access to capital and they need to go public. It's very hard for smaller companies that are not tied to the government to go public in China, and it's hard to get bank debt as well if you're small, so they've sought other avenues of raising money. Getting listed in the U.S. has become more popular over the last 10 years. These companies have done well for the U.S. shareholders because they have higher growth but lower valuation than the U.S. companies and they have lower valuation than the locally listed equivalent companies. They have to abide by the U.S. standards of reporting disclosures as well.
Mr. Hood: There's one company in China called Shiner International, which is in plastic packaging. They're in some unique areas like anti-counterfeiting for products like cigarettes. They are also in the normal run-of-the-mill plastic packaging and that should be a good growth area over the next several years. The valuation of the stock is very much on the reasonable side.
Mr. Astman: Another one is China Pharmaceutical Holdings, which manufactures drugs and distributes them in China. Company does about $50 million to $60 million in revenues with forecast of $75 million for next year, which is a 25% increase. It trades at about eight times estimated earnings in 2009 and about six times estimated earnings in 2010. So again, we're seeing much higher growth in China. In other words, a company may be selling at 10 times earnings, but their growth might be 50% for the next three years.
Mr. Hood: China Pharmaceutical Holdings will have doubled its revenue this year from the 2007 level and should increase by well over 25% in 2010. They've really benefited from the government's emphasis on rural healthcare, which is part of their stimulus package. It has helped improve sales to the pharmacies and hospitals outside of the major cities, thereby benefiting the company.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 47 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
http://finance.yahoo.com/news/US-Listed-Chinese-Companies-twst-3721089464.html?x=0&.v=1
CSOL reporting any day now. Looking for a 100% pop.
BSPM
They convert many of thier cars to run on pig & cow shit.No gasoline needed.
CSOL if its another .03 qtr its an easy double from here if not a triple given the low float.Low risk high return.Its the kind that doesnt take a lot of market savy.
Record earnings all over the place in solar.
Potential vs dilution? I wish more investors would see it this way.
CKGT great time to be buying. This is a second and probably last chance for some cheap shares.
CKGT Earnings are due out soon.This isnt going to stay down for too long.
Thanks burp....just emailed my congressmen.
CKGT Is anyone looking past the end of thier nose. Geez what a bunch if whiners. They raised funds just like I predicted under reasonable terms most likely to help with there massive production in all kind of goods.How quickly people forget about cigarettes, hog feed. cosmetics etc. They want to roll these out a little faster than there cash flows alllows. Hey , fine with me. This kind of dilution is GOOD.If you still want to cry about this then girls, you can sell me your shares. Im buying.
CPQQ $1.90 HOD
CGDI i had this for awhile . The problem is so few trade you can only get out sucessfully on its wild upticks. Low float stocks can be very profitable but you have to know how to play them and not everyone should jump into them simply on the premis of it being profitable and a low floater. If you cant sit on the stock you wont make money. Not everyone has this temperment. If you can fugure out what your temperment is and trade accordingly , Only thne will someone be a successful investor/traders. Know yourself is even more important than knowing stocks/charts etc.
CSOL It seems "safe" at this price level, if anything is really safe.Earnings should be due really soon and it could have one heck of a pop up.Im waiting on this. Whenever I get impatient over stuff like what you are talking about, I remember my reasons for buying, reevaluate to see if nothing has fundamentally changed with the company , and just chill. I go back to my long term success rate and dont really worry to much about stock dips. It does help that im up over 100% in the lsat 2 months.Life is good. The markets are tricky. Protect your profits. But most of all have peace of mind about what you invest in and if you lose sleep over any of it sell it. It aint worth the hassle in your life.
CSOL Started a position today. I believe it is selling below cash value. Unreal. Its selling below liquidation prices.
I dont know i will have to chew on that for awhile.
delete
CPQQ I am fairly sure that some of the warrants have already been exercised. With such demand and its ability to produce cheaper than its competitors plus booming production increases and its tie in to the local electrical grid being upgraded I cant run at the thought of some dilution.Dilution for the sake of meeting production demands is ok in my view.FWIW I wouldnt be surprised to see CKGT raise more shares also to meet its demand for goods.If not this quarter then very soon I believe CPQQ will knock the earnings out of the ballpark. I have no information that leads me to also feel they will likely uplist but this is another event in CPQQ that I feel will also happen. Time will tell. Hey, by the way you do some great charts and I do have an interest in what you are doing and the way you are helping others on this board.Congrads.
CPQQ The Company has recently adjusted its sales model from a traditional scattered distribution across the country to Shaanxi province-focused, and national radiation distribution model. Working directly with the local electric power company of Shaanxi province, China Power will provide equipment for the regional improvement project for the rural power grid.
CPQQ "China Power Equipment intends to increase its manufacturing and distribution of amorphous transformers and cores by at least 200 percent for 2010 over 2009. This will be accomplished by both increasing production at the Company's existing facilities as well as hopefully adding additional production facilities during the first or second quarters of 2010."
CPQQ Perhaps this is the start of the pre-earnings run I was expecting.
CPQQ Its strange there isnt any pre earnings run.Its likely they were not at full production last quarter and this quarter should be at full production in addtion they plan on doubling production from the existing plant in addition to opening up a new facility in early 2010. The demand is so high they just cant produce fast enough to meet its demand.....which by the way is a nice problem to have.
I can only dream of when the seller is gone,
GCHT looking towards another run but maybe with the day traders out of the picture
CPQQ Mr. Song went on to say, "China Power Equipment intends to increase its manufacturing and distribution of amorphous transformers and cores by at least 200 percent for 2010 over 2009. This will be accomplished by both increasing production at the Company's existing facilities as well as hopefully adding additional production facilities during the first or second quarters of 2010."
Mr. Song went on to say, "China Power Equipment intends to increase its manufacturing and distribution of amorphous transformers and cores by at least 200 percent for 2010 over 2009. This will be accomplished by both increasing production at the Company's existing facilities as well as hopefully adding additional production facilities during the first or second quarters of 2010."
GCHT watch out above once it breaches $4. It will have another strong run.
GCHT they needed the capital badly. Now they have about 20miilion in cash and look as if they dont have any more weaknesses. They are set up now to RUMBLE.
Once we breach $4 everyone will start to chase.
GCHT LMAO Get in as cheap as you can, I dont think the charts will hold her down.
Cant understand why things seem to have stalled out.Little upside even in good CSC days.
Slowly creeping back up without much notice or fanfare. Earnings are due soon and we should see some nice numbers.
Good to see this finally starting to move.
GCHT looking for mid 4's tomorrow as momo builds up massively due to newsletter awareness.
The trend has been that it jumps up, stabilizes for a short while, jumps up again , stabilizes for a short while then jumps up again. this was even before any spam came along on it. It has a clear pattern that is playing out exactly this way.
Godzilla eats the NYSE $3.55
GCHT $3.50 Next stop $4
GCHT is hot $3.17 and the train is leaving the station!
GCHT Looks ready to run now that it broke $3.
GCHT still green in a sea of red.