CEU and Rodman & Renshaw
It's particularly funny if you read today's note in the light of Rodman's October 12 note where they wrote:
We remain upbeat on CEU shares despite its ~31% appreciation from its recent low (<$4/share) on September 29th. At $4.82, CEU is trading at 7.9x our 2010 EPS estimate of $0.61 and 6.4x our 2011 EPS estimate of $0.76. (4.0x and 3.2x, respectively, excluding its cash balance of $~2.40 per share/50% of the stock price). In addition, with our expectation of '10 FCF yield of 14%, we still believe that the current trading level represents an attractive entry point into the stock. Recent and planned Chinese education company IPO’s onto the U.S. exchanges, including Ambow Education Holding (NYSE: AMBO), Tal Education, and Global Education & Technology Group, are bringing further prominence and credibility to the space. We are firm believers that over time, the equity markets trade on the fundamental merits of the companies themselves rather than on the path in which they were taken public (reverse merger vs. IPO), per se. Our 12-month price target of $9 is based on 12x our 2011 EPS estimate vs. nearly 20x for its U.S.-listed education peers. With an accelerating EPS growth rate from an expected single-digits to 20%+ in 2011, above-industry average operating margin of 40+%, and plenty of cash, CEU remains one of our top picks.
They haven't just recommended the stock with an "outperform" rating, it was a very strong and determined call.
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