China Growth Stocks

[ratobranco]

NFEC - but people have it all wrong. Dilution from private investors doesn't mean it's going down, especially not if the company has strong earnings and revenue growth and can leverage a sweet deal.

For recent evidence, consider CHGI.OB.

http://finance.yahoo.com/echarts?s=CHGI.OB#symbol=CHGI.OB;range=3m

They traded at $1.30-$1.40 for the entire month of November. Then, last Wednesday (Dec. 23rd) they announce a placement with private investors at $1.20, w/ warrants at $1.30. What happens? They break out to $1.60. The only reason they haven't gone higher is because of a report published this week that china's nuclear expansion panel will recommend the Candu (Canadian deuterium) reactor design, where heavy water and not graphite is used as the moderator. Had it not been for that report, they would be sniffing at $2.00 right now.

A private financing deal for a growing, positive cash flow company near the current share price indicates confidence from the investment community, and leads to share price appreciation. The drops we've seen have come mostly from situations where the company starts working on a deal when the stock is at one price, then the price run up, and the stock gets diluted at what the price used to be. NFEC hasn't run up, it has come down from much higher prices.

I talked to NFEC's IR, he said they are on the cusp of an uplist. He said that they would accept financing only on good terms, and that the phone is ringing off the hook with offers. The insider ownership is 60%, they aren't going to screw themselves.

The valuation is incredible on this stock. It's a CWS waiting to happen--in fact, based purely on earnings and earnings growth, it's a better deal than CWS was when CWS was at the same price.

Uplist, then boom. Easy money. I want in the stock now, not after the uplisting, when it's $6.50 and the herd is chasing it (like CWS). Sold out of CWS at $6.57 yesterday, more into NFEC.