CHGY- smallcoal PPS lags bigcoal's trend
CHGY's P/E is ridiculously cheap and there's no reason to believe CHGY's revenues won't benefit as much as other coal company's from higher coal prices and higher demand this year. However, CHGY isn't feeling the love yet but because it's a coal producer there is a high probability it will have it's day in the sun during this winter's coal season, after investors first pile into the most obvious, safest big name coal plays, whose PPS bust out first, then when people see those stocks at high P/E values and with a perception of higher risk of pullback due to rapid PPS increase, then investors follow by buying the smaller and riskier coal stocks later, which still have very undervalued P/Es. It should all happen at some point in the next couple months.
CHGY had a mini-spike early in the fall when earnings came out, but its next earnings are their 10K and so won't be due out for a long time. Usually investors like to pile in during the 2-4 weeks before earnings, and it's a ways off for CHGY. Also, it has lower volume and you don't see a lot of message board posters or news. All of that makes CHGY a sleeper until all of a sudden when the bigger community discovers it sometime during mid-winter and it should shoot up from from the 1.70s/1.80s where it is now all the way to the low-3s to mid-3s, at which point it will STILL be undervalued compared to larger coal companies' P/Es.
Glad I bought CHGY early in the fall when PPS was mid-1.60s, as it is likely to double within 2-3 months. It had a pullback with other China stocks a week ago, but luckily for new investors, it hasn't sprung back yet, making a great entry point with almost zero downside risk and probable 2X upside this winter season if you are a patient investor. GLTA.
AI
