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I want to say that my heart goes out to anyone who lost all or most today . In 2000 i was working as a stock broker on Wall street . I was margined and got wiped out . I went into a serious depression and it took me a few years to get right mentally . I forgot to tell myself i made that fortune the same way i lost it . For guys like me this takes a lot of discipline . When CCME sold off a few months ago i got out at 11 and bought back in below 9 . I sold it when it hit 11 and didnt buy until it hit 15 . I sold at 20 but lost my discipline in went all in at 17.2 avg . I did not go on margin . I feel very confident CCME is for real. So i will get a chance to see for sure . Again i am sorry for all who had money stolen from them today. There are so many crooks on Wall street it is sad . I think our China friends are discovering that.
What doesn't kill you makes you stronger . I have to believe long term CCME comes out of this a lot stronger . My heartburn i am not so sure about . It is so interesting to see so many long term followers of the stock start to raise doubts today . Thats exactly how the shorts won the battle of psychology today .When your own siblings turn on you its bad .I wish i stuck to my guns and followed Joe . Now i know why he has time all day to take pictures of Deer in the snow .I hope only to learn half of his trading skills.
Burp
your humor has worked better than the ma-lox did today
Thank you
20 million shares traded ?
CCME
Where are all of these shares coming from to sell ?
I have never ever met a trader that made so many big calls at crucial trading times as you . Im sick to my stomach i loaded up at 17 and not 12 .
Excellent article by Michael
http://seekingalpha.com/article/250498-china-mediaexpress-groundwork-research-and-videos-to-disprove-allegations?source=yahoo
Have not figured how to cut and paste on my iPad
Have a lot of time on my hands pulled off on the side of alligator alley shut down due to fog
It would be great as a SA article
Sold 16.00 Sep 2011 Put 5.60
Bought 16.00 Sep 2011 Call 3.91 (after commissions)
So I'm long synthetically at 16.00, .57 premium to current price, and they paid me 5.60 - 3.91 = 1.69 to do it.
Wow Thats fantastic
WhAt would be sweet is if they declared a special dividend payable to holders as of Feb 14
I did not realize Goldman was on board . Swiped from YMB
http://www.nasdaq.com/asp/holdings.asp?symbol=CCME&selected=CCME&FormType=Institutional
SA CCME
http://seekingalpha.com/article/250192-7-small-cap-short-squeeze-candidates-for-2011?source=yahoo
China MediaExpress Holding (CCME): CCME is the largest TV advertising operator on inner city buses and airport express buses in China. With strong margins and excellent returns on investment in a fast growing market, why the hate from short sellers?
The culprit, a report put out by Citron Research on Jan. 31, 2010, claiming the company’s growth story is too good be true, the that company is a “phantom” and that "no one in China has ever heard of [China MediaExpress].” CCME has come out defending itself against the piece, and many commentators have pointed out that Deloitte audits the company and that CV Starr’s Hank Greenberg is a shareholder. But that hasn’t stopped the shorts. Short float is 35.17% at the time of writing.
It’s too early to say for sure exactly what’s going on here. If the uncertainty around this issue clears, it’s highly likely the company’s share price could appreciate significantly, albeit with a fraud discount, as a shorts cover their positions. However, if more evidence appears pointing to a massive Enron-style fraud, there is still plenty of room for CCME to fall. Our own due diligence suggests the company is not a fraudulent operation.
SA CCME
http://seekingalpha.com/article/250192-7-small-cap-short-squeeze-candidates-for-2011?source=yahoo
China MediaExpress Holding (CCME): CCME is the largest TV advertising operator on inner city buses and airport express buses in China. With strong margins and excellent returns on investment in a fast growing market, why the hate from short sellers?
The culprit, a report put out by Citron Research on Jan. 31, 2010, claiming the company’s growth story is too good be true, the that company is a “phantom” and that "no one in China has ever heard of [China MediaExpress].” CCME has come out defending itself against the piece, and many commentators have pointed out that Deloitte audits the company and that CV Starr’s Hank Greenberg is a shareholder. But that hasn’t stopped the shorts. Short float is 35.17% at the time of writing.
It’s too early to say for sure exactly what’s going on here. If the uncertainty around this issue clears, it’s highly likely the company’s share price could appreciate significantly, albeit with a fraud discount, as a shorts cover their positions. However, if more evidence appears pointing to a massive Enron-style fraud, there is still plenty of room for CCME to fall. Our own due diligence suggests the company is not a fraudulent operation.
CBS Marketwatch Evaluating hot Chinese stocks
( edited to show CCME part only )
http://www.marketwatch.com/story/evaluating-hot-chinese-stocks-2011-02-01
China MediaExpress Holdings Inc.
“Cheap” Chinese stocks — those selling at low prices equivalent to five or 10 times earnings — are often suspect as potentially fraudulent. However, individual investors might find China MediaExpress Holdings Inc. (CCME 16.66, -1.18, -6.61%) worth a look, if only because recent data indicate several institutional investors have done their due diligence and are beginning to take positions in the stock.
Such votes of confidence from large institutional investors — accompanied by the commitment of their investment dollars — are often a highly constructive sign for new or emerging companies.
In addition to increasing institutional interest, China MediaExpress also has a strong business model. Far more Chinese workers commute on public transit than do Americans, and CCME’s advertising services are currently featured on around 25,000 buses, with another 10,000 due to be added over the next few years.
The company is also taking advantage of its position in the bus-advertising market to steer customers to ads on CCME’s company-operated Web portal. Clients can run ads on the site, as well as in a soon-to-be-launched magazine, and customers can respond to these ads by placing orders online.
CCME was recently ranked No. 1 in the Forbes China 200 survey. This list features small- to mid-sized Chinese companies considered to have the most potential based on various metrics, including three-year weighted average revenue growth rates, return on assets, return on equity and operating margins. Over the past five quarters, China MediaExpress has grown earnings at rates of 87%, 44%, 50%, 100%, and 45%, respectively, while revenues have risen by 66%, 91%, 137%, 180% and 118%, respectively.
Based on recent chart patterns, the stock looks poised to break out to new highs above the $20 to $22 price level, and we would view it as a buy within its current trading range.
CBS Marketwatch Evaluating hot Chinese stocks
( edited to show CCME part only )
http://www.marketwatch.com/story/evaluating-hot-chinese-stocks-2011-02-01
China MediaExpress Holdings Inc.
“Cheap” Chinese stocks — those selling at low prices equivalent to five or 10 times earnings — are often suspect as potentially fraudulent. However, individual investors might find China MediaExpress Holdings Inc. (CCME 16.66, -1.18, -6.61%) worth a look, if only because recent data indicate several institutional investors have done their due diligence and are beginning to take positions in the stock.
Such votes of confidence from large institutional investors — accompanied by the commitment of their investment dollars — are often a highly constructive sign for new or emerging companies.
In addition to increasing institutional interest, China MediaExpress also has a strong business model. Far more Chinese workers commute on public transit than do Americans, and CCME’s advertising services are currently featured on around 25,000 buses, with another 10,000 due to be added over the next few years.
The company is also taking advantage of its position in the bus-advertising market to steer customers to ads on CCME’s company-operated Web portal. Clients can run ads on the site, as well as in a soon-to-be-launched magazine, and customers can respond to these ads by placing orders online.
CCME was recently ranked No. 1 in the Forbes China 200 survey. This list features small- to mid-sized Chinese companies considered to have the most potential based on various metrics, including three-year weighted average revenue growth rates, return on assets, return on equity and operating margins. Over the past five quarters, China MediaExpress has grown earnings at rates of 87%, 44%, 50%, 100%, and 45%, respectively, while revenues have risen by 66%, 91%, 137%, 180% and 118%, respectively.
Based on recent chart patterns, the stock looks poised to break out to new highs above the $20 to $22 price level, and we would view it as a buy within its current trading range.
CCME Scott Redler T3 lives comments at Street.com and video .
He basically say that CCME first came on to peoples radars when the shorts questioned the earnings and pummeled it down to 8$ . He states their are some bad apples in the group and CCME is not one of them .He points to Starr , Big 4 accounting firm and an excellent CEO . The company fought back and won the first round . " Whenever a stock goes from 9 $ to 24 $ it pops up on peoples radar " So then the hit pieces came out and he feels we are in a corrective trading range between 19 and 24 . " Let it work through " Once above 24 it will hit 30$ and that will be CCME next trading range . He said the company is solid
http://www.thestreet.com/_yahoo/video/10991602/china-mediaexpress-holdings-china-watch.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1#774005426001
OUR PROFESSORS
Scott RedlerSEE WHAT SCOTT REDLER HAS WRITTEN »
Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the company and serves as the de facto face of T3 Live. Mr. Redler focuses on thorough preparation and discipline to achieve uncommon consistency as a trader. Experience: Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Mr. Redler has participated in more than 30 triathlons and one IronMan triathlon, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Mr. Redler produces much of the media and content available to subscribers and followers.
Education: Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany’s School of Business.
Personal Statement from Scott: In order to complete a triathlon, or, even further, an Iron Man, you need motivation, discipline, staggering mental composure and an extensive game plan. Having completed twenty-plus triathlons and one Iron Man competition, I have mastered these qualities and incorporated them into my life on every level. My trading is no exception; to be a successful trader it takes discipline, passion, a positive outlook and mental toughness. I am the first one in the office and the last one to leave. Trading is a lifestyle, one always needs to continue learning and adapt to the environment to put oneself in a position to succeed. The stoic, prepared, accountable trader will always end up on the right side.
http://www.minyanville.com/gazette/bios.htm?bio=286
CCME Scott Redler T3 lives comments at Street.com and video .
He basically say that CCME first came on to peoples radars when the shorts questioned the earnings and pummeled it down to 8$ . He states their are some bad apples in the group and CCME is not one of them .He points to Starr , Big 4 accounting firm and an excellent CEO . The company fought back and won the first round . " Whenever a stock goes from 9 $ to 24 $ it pops up on peoples radar " So then the hit pieces came out and he feels we are in a corrective trading range between 19 and 24 . " Let it work through " Once above 24 it will hit 30$ and that will be CCME next trading range . He said the company is solid
http://www.thestreet.com/_yahoo/video/10991602/china-mediaexpress-holdings-china-watch.html?cm_ven=YAHOOV&cm_cat=FREE&cm_ite=NA&s=1#774005426001
OUR PROFESSORS
Scott RedlerSEE WHAT SCOTT REDLER HAS WRITTEN »
Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the company and serves as the de facto face of T3 Live. Mr. Redler focuses on thorough preparation and discipline to achieve uncommon consistency as a trader. Experience: Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Mr. Redler has participated in more than 30 triathlons and one IronMan triathlon, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Mr. Redler produces much of the media and content available to subscribers and followers.
Education: Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany’s School of Business.
Personal Statement from Scott: In order to complete a triathlon, or, even further, an Iron Man, you need motivation, discipline, staggering mental composure and an extensive game plan. Having completed twenty-plus triathlons and one Iron Man competition, I have mastered these qualities and incorporated them into my life on every level. My trading is no exception; to be a successful trader it takes discipline, passion, a positive outlook and mental toughness. I am the first one in the office and the last one to leave. Trading is a lifestyle, one always needs to continue learning and adapt to the environment to put oneself in a position to succeed. The stoic, prepared, accountable trader will always end up on the right side.
http://www.minyanville.com/gazette/bios.htm?bio=286
Im holding a while this time
Either the world is round or its flat .
Yesterday someone said it was flat , Ill take the other side
Head scratcher on why they dont put buy back in to place on a day like today ???
Weeeeeeeeeee News DJ China Media comments on Negative blog post
CCME I just bought a bunch more at 16.06
CCME Hit 16.74 already in Pre Mkt.
With this SA hit piece we may get below 16.50 today
They are ripping this guy a new one in the comment section below his article .
'
http://seekingalpha.com/article/249937-why-i-sold-out-of-china-media-express
Luv it
Citron is the "scam artist giving a sales presentation on a product that will cure baldness"
Too funny
Another hit piece is out claiming its not a hit piece
http://seekingalpha.com/article/249937-why-i-sold-out-of-china-media-express?source=yahoo
Home » China Stocks
Why I Sold Out of China Media Express
’m almost reluctant to write this article after reading some of the vitriol yesterday directed at China MediaExpress (CCME) skeptics. For a taste of it, just look through some of these comments.
I know this is going to generate a lot of comments, so before I begin I want to mention a few things:
First, I’m not short the stock and I have no plans to go short. I sold out of my long position on Monday afternoon at 2:00 pm when the shares were $20.59. I didn’t follow the market the rest of the afternoon and was surprised to see the dramatic drop. I thought the Citron report (which is here if you haven’t seen it) had already been in the news, since it was released the day before, but looking at the chart it doesn’t look like the market really noticed it until around 2:30. That being said, I don’t think the Citron report had much new information.
The other point I’d like to make is that I’m not calling CCME a fraud. If someone else wants to do that, fine. You can debate that, but don’t accuse me of it. What I do want to do is outline my thought process of buying the stock, my skepticism along the way, and ultimately my decision to sell out.
I came across CCME in April and spent a few weeks doing some research and mulling over the idea. I opened my position on May 10, 2010 at $11.27 and was comforted by some Seeking Alpha articles that answered some open questions for me. Although I was concerned about buying a Chinese small cap, I was comforted by two things: CV Starr’s investment in them, and the Deloitte audit. I respect Hank Greenberg and I know that he knows China very well. I thought that gave CCME a lot of credibility. I also didn’t think it was possible to fool Deloitte. A local Chinese auditor, maybe, but not Deloitte.
The simple fact at the time is that if CCME is not, or was not a fraud, buying in at $11 was an absolute no-brainer. I won’t re-harsh details about their business prospects or financials, but at the time I pegged them to conservatively be worth $30 to $35.
I think it’s important to take the old Charlie Munger approach and invert. The idea is to challenge your opinions by coming at them with different assumptions. During the time that I held CCME I repeatedly tried to kill the idea. So, if I was going to fool CV Starr and the auditors, what would I do? Other investors and I had a lot of conversations about this and we learned a lot about Chinese companies along the way.
Let me give you a few examples of what I considered: In the U.S. you would not think it would be possible to fake the balance sheet in order to fool auditors. In China it’s relatively common. Short-term loans are given in order to prove to auditors that there is “cash” in the bank. If you wanted to commit a fraud, this sounds like something you’d do. What else would you do? You’d continuously announce new contracts. You may hold a somewhat glitzy investor day meeting. You’d probably have a network of brokers creating fake contracts and have loads of self-dealing. You’d get the stock price up and then use it to try to purchase other companies. You’d also try to get good press in the U.S., but not do much about press in China. I’m not accusing CCME of these things, but these are some of the things I considered while trying to disprove my long thesis.
In late summer, I spent a week surfing through Chinese websites trying to find mentions of CCME. The numbers were that they were one of the fastest growing companies in the world with net margins in the stratosphere. Surely, they would be written up throughout China as a company of the future. I don’t know Chinese, but I’m handy with Google Translate, and I didn’t find much. I even commissioned a Chinese friend to do a search as well, and nothing new turned up. The Citron report confirms that I wasn't the only one having trouble finding native language information about them. For a company their size and with their growth, they should have been written up by businesss journals throughout the region, instead I only found a few mentions in local newpapers.
A few other things made me skeptical. How could the airport bus contracts have such high margins? In general, it seemed to me there would be relatively low barriers to entry and the bus owners would have a ton of leverage. I know there may be relationships with government officials, but still. Wouldn’t the bus companies require lower prices? The Charlie Munger in me said the bus owners could be getting kickbacks or some other arrangement like that.
For the Citron report, they make a number of compelling arguments. If you’re long CCME, I would suggest setting your ego aside for a few minutes and reading the report objectively. For example, where is the media attention in China? Why don’t their competitors mention them? How are the margins so high? Why are they so reluctant to part with all the cash they’re making, other than a paltry dividend?
I’ve seen that the Twitter universe has blown up over Citron, and I’m not going to get into that, but you should look at their arguments and see if you can refute them. If you were being objective, the allegations would be tough to disprove. I know, you shouldn’t have to prove that CCME is not a fraud, the burden is on the one who made the allegations, but you should think about them very deeply if you’re long the stock. I don’t know the Citron people, but these were the very same questions that myself and other investors have been having since June so I’m not surprised they came out.
And still, I was long CCME.
Over the last few months I started trimming my position. Until yesterday at 2:00 pm, I still had 2% of my portfolio in CCME. I sold out the rest of it then. I had been trimming the position since October, and if you take into account the entire position, I only ended up making 21%.
I don’t know if CCME is a fraud. What I do know, though, is there are at least half a dozen suspicious things about the company and their reports. Taking that risk at $11 is different than taking it at $18. Even if it were to drop back to my initial entry point, knowing what I do now, I wouldn’t touch it. That being said, can I tell you that Citron’s allegations are true? No. But I also can’t tell you they’re false.
There’s a story about a scam artist giving a sales presentation on a product that will cure baldness. The crowd wants to believe it works, but it’s an outlandish product and usually a tough sell to the crowd. One particular day someone in the audience challenged the salesman. He stood up and said there was no proof that this tonic worked, and urged the others to laugh at this clown selling a ridiculous elixir for an exorbitant price. The salesman slumped on stage. He thought it would be another tough day with no sales.
Astonished, though, one man raised his hand demanding the product. The salesman told him it wasn’t for sale. The man who had challenged him had been right. It didn’t work. Insistent, the customer demanded the salesmen sell him the miracle product that cured baldness. Then another customer made the same demand. And another. It was the best day the salesmen ever had.
Afterwards, he asked the first man why he wanted the product so badly when he knew it didn’t work. The customer said, “You don’t understand. I’ve been bald for 30 years. I need for this to work. It has to work. Hearing that guy stand up and say it can’t work only makes me need it more. It’s my only chance.”
The salesman realized then that what he was selling was hope. The crowd didn’t want to hear logic. In fact, the crowd became angry at the one who presented the facts. Realizing what had happened, in future sales pitches the salesman even planted a challenger in the audience to call the seller a fool. Sales went up and up.
Some people want to believe so badly that when challenged with logic, they respond with emotion. After reading some of the reactions to the Citron report, I’m beginning to think that Citron may be that audience member who yelled “stop!”
Who are you in this story?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Joe you are one of the best traders i have ever seen . 16.50 was a dream . If it happens i will go all in and break every rule i vowed not to break . But i will never margin again thats why those guys will be left out . I margined in 2000 and took many years to get back to even and i didn't get back to even by reading Cramers book.
China PMI below expectations which is good - shows tightening is working. Shanghai is actually up
The two things i have been looking for . The Shanghai has rallied nice in the past 2 weeks . I think that is a possible signal that the bottom has been made or is very close in stocks like YONG NEP LPH etc . I am looking to go fully invested into the China small cap space with my China trading account . I put 2/3 of it in CCME which is a big rule break for me . Good Luck to all . PS I am almost always early in my timing .
Well i just posted the Marketwatch story on CCMEs board for the first time in many months . Ill probably get eviscerated . Oh well
Evaluating hot Chinese stocks
Commentary: E-commerce and media picks for February
http://www.marketwatch.com/story/evaluating-hot-chinese-stocks-2011-02-01?siteid=yhoof
By Gil Morales and Chris Kacher
LOS ANGELES (MarketWatch) — China recently passed Japan as the world’s No. 2 economy, and it’s likely it will also surpass the United States at some point in the near future.
TRADING STRATEGIES: FEBRUARY
International impact
The market is much wider than just one country's borders, but where to start? Let our experts help you figure out your place in the world market.
• Hulbert: An international January Barometer?
• Lowell: Buy emerging markets where you can
• Kee: Forget China, short U.S. market instead
• Kahn: Another BRIC in the wall of worry
• Morales and Kacher: Hot Chinese stocks
• Fitz-Gerald: Two plays in emerging economies
• Gilani: Cash in on the euro's decline
• Kuhns: Power plays in China
• Helfert: S&P 500 is the best international play
• Herzfeld: Global investments at a discount
• Detrick: February worst month for stocks
• Tharp: Correction ahead, but don't sit it out
• Global headwinds hit investors
• See Trading Strategies full report
The expansion in China’s economy is also clearly reflected in the performance of its stock markets, which have done well in the New Millennium’s initial 2001-2010 decade.
Now, given the present global outlook, it seems likely the growth curve for both will remain robust for many years — if not decades.
Of course, as in any developing economy, there will be some hiccups along the way, but each hiccup will likely see China’s economy and its markets re-emerge even stronger — much as the U.S. economy and markets have done for nearly 250 years. As has also been the case throughout U.S. history, China’s continuing growth will be bolstered by the steady emergence of new industries and new companies, providing fresh fodder for investors to feast on through many market cycles.
With this in mind, there are two new China opportunities we currently like — both involving companies whose shares have recently begun trading on U.S. markets as American Depositary Receipts:
E-Commerce China Dangdang.com
One of the major contributors to China’s economic growth has been the rapid emergence of the consumer class, which now represents the largest pool of buying power in the world — surpassing even the U.S. These new consumers are also relatively young, meaning they have grown up with the Internet and are much more in tune with the notion of shopping online.
That bodes extremely well for E-Commerce China Dangdang.com (DANG 28.30, -0.22, -0.77%) — which, if not quite yet the Chinese Amazon.com, is about as close as one can get as an American investor.
E-Commerce China Dangdang.com has also gotten the attention of major institutional investors. Boston-based Fidelity Management & Research, one of the largest mutual-fund managers in the world, recently disclosed a 17.6% position in the company — very interesting given that the stock has been trading less than two months.
DANG became public on Dec. 8, 2010, with an initial public offering valued at $16 per share. The stock roared out of the starting gate, nearly doubling on its first day and peaking at $30.90 a share. Since then, DANG has moved sideways, building a short consolidation around the $30 price level.
As long as DANG is able to hold the lows of this current consolidation around $25 to $26 a share, we feel investors should take a close look at the company. We believe it represents a solid international play offering both steak and sizzle since growing demand from the expanding Chinese consumer class should continue to fuel strong revenue growth, based on recent projections by DANG Chief Executive Officer Guoqing Li.
China MediaExpress Holdings Inc.
“Cheap” Chinese stocks — those selling at low prices equivalent to five or 10 times earnings — are often suspect as potentially fraudulent. However, individual investors might find China MediaExpress Holdings Inc. (CCME 17.84, -3.02, -14.48%) worth a look, if only because recent data indicate several institutional investors have done their due diligence and are beginning to take positions in the stock.
Such votes of confidence from large institutional investors — accompanied by the commitment of their investment dollars — are often a highly constructive sign for new or emerging companies.
In addition to increasing institutional interest, China MediaExpress also has a strong business model. Far more Chinese workers commute on public transit than do Americans, and CCME’s advertising services are currently featured on around 25,000 buses, with another 10,000 due to be added over the next few years.
The company is also taking advantage of its position in the bus-advertising market to steer customers to ads on CCME’s company-operated Web portal. Clients can run ads on the site, as well as in a soon-to-be-launched magazine, and customers can respond to these ads by placing orders online.
CCME was recently ranked No. 1 in the Forbes China 200 survey. This list features small- to mid-sized Chinese companies considered to have the most potential based on various metrics, including three-year weighted average revenue growth rates, return on assets, return on equity and operating margins. Over the past five quarters, China MediaExpress has grown earnings at rates of 87%, 44%, 50%, 100%, and 45%, respectively, while revenues have risen by 66%, 91%, 137%, 180% and 118%, respectively.
Based on recent chart patterns, the stock looks poised to break out to new highs above the $20 to $22 price level, and we would view it as a buy within its current trading range.
Gil Morales and Dr. Chris Kacher are both Managing Directors of MoKa Investors, LLC, operate the investment advisory website Virtue Of Selfish Investing , and co-authors of the new book, “Trade Like An O’Neil Disciple: How We Made 18,000% in the Stock Market” (Wiley, 2010). They don’t own the stocks mentioned in this column.
Evaluating hot Chinese stocks
Commentary: E-commerce and media picks for February
http://www.marketwatch.com/story/evaluating-hot-chinese-stocks-2011-02-01?siteid=yhoof
By Gil Morales and Chris Kacher
LOS ANGELES (MarketWatch) — China recently passed Japan as the world’s No. 2 economy, and it’s likely it will also surpass the United States at some point in the near future.
TRADING STRATEGIES: FEBRUARY
International impact
The market is much wider than just one country's borders, but where to start? Let our experts help you figure out your place in the world market.
• Hulbert: An international January Barometer?
• Lowell: Buy emerging markets where you can
• Kee: Forget China, short U.S. market instead
• Kahn: Another BRIC in the wall of worry
• Morales and Kacher: Hot Chinese stocks
• Fitz-Gerald: Two plays in emerging economies
• Gilani: Cash in on the euro's decline
• Kuhns: Power plays in China
• Helfert: S&P 500 is the best international play
• Herzfeld: Global investments at a discount
• Detrick: February worst month for stocks
• Tharp: Correction ahead, but don't sit it out
• Global headwinds hit investors
• See Trading Strategies full report
The expansion in China’s economy is also clearly reflected in the performance of its stock markets, which have done well in the New Millennium’s initial 2001-2010 decade.
Now, given the present global outlook, it seems likely the growth curve for both will remain robust for many years — if not decades.
Of course, as in any developing economy, there will be some hiccups along the way, but each hiccup will likely see China’s economy and its markets re-emerge even stronger — much as the U.S. economy and markets have done for nearly 250 years. As has also been the case throughout U.S. history, China’s continuing growth will be bolstered by the steady emergence of new industries and new companies, providing fresh fodder for investors to feast on through many market cycles.
With this in mind, there are two new China opportunities we currently like — both involving companies whose shares have recently begun trading on U.S. markets as American Depositary Receipts:
E-Commerce China Dangdang.com
One of the major contributors to China’s economic growth has been the rapid emergence of the consumer class, which now represents the largest pool of buying power in the world — surpassing even the U.S. These new consumers are also relatively young, meaning they have grown up with the Internet and are much more in tune with the notion of shopping online.
That bodes extremely well for E-Commerce China Dangdang.com (DANG 28.30, -0.22, -0.77%) — which, if not quite yet the Chinese Amazon.com, is about as close as one can get as an American investor.
E-Commerce China Dangdang.com has also gotten the attention of major institutional investors. Boston-based Fidelity Management & Research, one of the largest mutual-fund managers in the world, recently disclosed a 17.6% position in the company — very interesting given that the stock has been trading less than two months.
DANG became public on Dec. 8, 2010, with an initial public offering valued at $16 per share. The stock roared out of the starting gate, nearly doubling on its first day and peaking at $30.90 a share. Since then, DANG has moved sideways, building a short consolidation around the $30 price level.
As long as DANG is able to hold the lows of this current consolidation around $25 to $26 a share, we feel investors should take a close look at the company. We believe it represents a solid international play offering both steak and sizzle since growing demand from the expanding Chinese consumer class should continue to fuel strong revenue growth, based on recent projections by DANG Chief Executive Officer Guoqing Li.
China MediaExpress Holdings Inc.
“Cheap” Chinese stocks — those selling at low prices equivalent to five or 10 times earnings — are often suspect as potentially fraudulent. However, individual investors might find China MediaExpress Holdings Inc. (CCME 17.84, -3.02, -14.48%) worth a look, if only because recent data indicate several institutional investors have done their due diligence and are beginning to take positions in the stock.
Such votes of confidence from large institutional investors — accompanied by the commitment of their investment dollars — are often a highly constructive sign for new or emerging companies.
In addition to increasing institutional interest, China MediaExpress also has a strong business model. Far more Chinese workers commute on public transit than do Americans, and CCME’s advertising services are currently featured on around 25,000 buses, with another 10,000 due to be added over the next few years.
The company is also taking advantage of its position in the bus-advertising market to steer customers to ads on CCME’s company-operated Web portal. Clients can run ads on the site, as well as in a soon-to-be-launched magazine, and customers can respond to these ads by placing orders online.
CCME was recently ranked No. 1 in the Forbes China 200 survey. This list features small- to mid-sized Chinese companies considered to have the most potential based on various metrics, including three-year weighted average revenue growth rates, return on assets, return on equity and operating margins. Over the past five quarters, China MediaExpress has grown earnings at rates of 87%, 44%, 50%, 100%, and 45%, respectively, while revenues have risen by 66%, 91%, 137%, 180% and 118%, respectively.
Based on recent chart patterns, the stock looks poised to break out to new highs above the $20 to $22 price level, and we would view it as a buy within its current trading range.
Gil Morales and Dr. Chris Kacher are both Managing Directors of MoKa Investors, LLC, operate the investment advisory website Virtue Of Selfish Investing , and co-authors of the new book, “Trade Like An O’Neil Disciple: How We Made 18,000% in the Stock Market” (Wiley, 2010). They don’t own the stocks mentioned in this column.
OMG those boys battling with those insane short posters on CCME YMB deserve a medal . I can only glance it for a moment. It is such a zoo there.
CCME is already back up to 17.45 from at least a low of 17.13 .
I expect the management to hit back hard either Tues or Weds forget about that its new years over there .
From YMB
Just got off the phone with Jacky Lam 44 minutes ago
So I called Jacky and we spoke. CCME will prepare a rigorous response to Citron's claims.
http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_C/threadview?m=tm&bn=101061&tid=42403&mid=42403&tof=1&frt=2%3C/span%3E%3Chr/%3E%3C/blockquote%3E
I think this is a solid post but i could be wrong
I still have cash but i am loving my shares from 17.13 to 17.80 today . I think in a few days i will be very happy .
Sorry i got them at 17.13 funny low on Ameritrade says 17.21
Filled Buy 400 CCME Limit 17.13 -- -- 16:44:59 01/31/11
Filled Buy 600 CCME Limit 17.13
If they put out a nice press release
Jacky wont stand for this . I think he will respond quickly.
What is going on with our stocks?
This is the sale i have been waiting for !!
When i go into Macys and they are clearing out 800$ suits for 150$ i dont ask why i just buy . I took a lot of heat for holding cash but this is exactly what i have been waiting for .Sure CCME could go lower but i feel it is a sure as bet as any to go much higher . Even if the US market corrects i expect CCME to hold up.I like yong too .
picked some more CCME @ 17.15
U beat me out of those . Cheers to you !
Im buying more at 17.39 thank you thank you