Those four names are certainly some of the seemingly 'safer' names in the space. Personally I also like YONG, despite its fairly high short interest, because of four reasons 1) High potential reward & good industry, 2) Morgan Stanley involvement, 3) Matching SEC/SAT documents for 2008/2009 and this was obtained last year before the fraud frenzy -- So its fairly dependable, 4) Short interest has come down by HALF in the past few months. That has to be taken into consideration as well.
Some might like LIWA, but that depends on trusting "China 360's" research. I'd want to do more research on the three entities which create "China 360" before having a large position. Short interest is fairly high but has also been coming down significantly the past few months. I view the fact that China 360 AND "Jones Associates" both did investigations separately as a positive personally. The more watchers the better.
Personally the highest risk stock which I own is TSTC. I only became more interested in the name after looking into their technology (they got their hardware approved by US regulators, have US ongoing installations and have some affiliations with US carriers). Talking to Mr. Ballard, the CEO of Quell which does their US installations, helped me become more comfortable here. High A/R bothers me but the fact that GRRF and Comba (same industry) have similar long collection cycles helps to assuage my fears on this end. Good to see short interest decline here lately but I bet a significant portion of that short-interest comes from the huge A/R and corresponding doubts it gives investors. It also helps that I see Telestone being mentioned prominently in Chinese media regarding the Big3 Telecom job auctions, etc.
-Fernando
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