Redchip shorting response.
Obviously this issue of shorting is serious enough to warrant a press release headline like this.....
Shorts Will Rue the Day They Shorted LLEN
The sell-off in L&L Energy, Inc. (NasdaqGM: LLEN) yesterday was unwarranted and created an ideal buying opportunity. The Company has no accounting issues or deficiencies and has undergone rigorous due diligence by bankers and institutional investors.
Norman Mineta, former US Transportation Secretary and Commerce Secretary, recently joined the Company’s Board of Directors and has been appointed Vice Chairman of the Board. You can be sure he did his due diligence before signing on with LLEN.
LLEN is an American company with coal operations in China that generated revenues of $109 million, a year-over-year increase of 167%, and earnings of $33 million, a 230% increase, in fiscal 2010. It recently generated 395% revenue growth and 306% net income growth in the first quarter of fiscal 2011. Management projects net income of $46 million for fiscal 2011 on $218 million in organic revenues.
Four-fifths of China’s electricity is generated by coal. China became a net importer of coal in 2009 and had net imports of 71 million metric tons in the first half of 2010. LLEN is executing a major roll-up of smaller mines in China and has set its goal on becoming a $1 billion revenue company over the next 3-5 years.
The company is on track to generate $46 million in net income without acquisitions in fiscal 2011. With trailing EPS of $1.51, a 10x P/E would put the stock at $15.00 and a 20x P/E at $30.00. The company is expected to make several acquisitions this fiscal year, which could put net income considerably higher than management’s guidance. Smart investors will accumulate this stock between $7.50 and $9.00 and hold.
Dave Gentry
President and CEO, RedChip Companies
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