What I want to see from CCME's stock has little to do with charts and candlesticks, momo traders or how many days it's been on the Reg list.
I want to see the market treat the stock like it has a predictable future. I want to see it trade on future earnings.
I suppose it was understandable that after the Q3 report the stock would correct given the monster run it had from $8 to $22. Correcting down to about $14 at one point, that was a bit extreme. Especially given the guidance management gave for the rest of 2010, which we know is conservative.
Since around the last week in November the company has announced a string of positive developments. Everything from the Starr warrant exercise to an insider buy to adding buses and launching SWITOW. Not to mention initiating a dividend, unheard of among Chinese small caps.
So now I want to see some respect. I want to see a recognition by the market that this particular company has given nobody any reason to doubt its numbers. Recognition that management is conservative in their forecasts, prudent in running the business, and that they follow through on what they say.
It's time for the market to acknowledge the strength and sustainibility of the business model and put a multiple on the stock not based on the past but what lies ahead. And what lies ahead is more buses in the network, the ramp of SWITOW, expanding into the tour bus biz, more great FCF, and a divi payment. It's time CCME had the same p/e as FMCN, or higher. Time for the shorts to realize their error and move on. Time for us to be rewarded for this roller coaster ride. I want to see a double digit multiple based on forward EPS and can think of no legitimate reason why we shouldn't get it. The John Bird's of the world be damned.
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