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Bargain hunting for the sport

Tommy,

Glad someone looks through my notes. I just added this to my to-do list — which is currently 7 companies long.

My dad ran a business called ARM Computing for 15 years. I am just carrying on the legacy.

A couple things:

1. Your notes reflect that you dig deep enough and that you have a sense of what you are looking for. That’s a plus.
2. If I had any advice, or a cautionary statement — make sure you never get caught up in 1 company and try to continue to prove that it is a good value. Always be nimble and always be comparing that which you are invested in to that which you could be invested in. If you like another opportunity better. Switch.

A couple similar companies off the top of my head that you might be interested in/familiar with

oil
Cneh, lpih, I think snen too. (snen is not a buy for me, but it’s interesting)

Coal:

Sclx, chgy, pudc

Anyway, I’m sure there are more. The bottom line: Find the best way to allocate your money so that you are the most confident that you will not lose. I can’t emphasize that enough. By doing that, with that mindset, you should do fine. The trick is figuring out what not to own instead of wasting lots of time evaluating 1 single potential opportunity. I call this relative valuation.

Maybe I have no idea what I’m talking about, but empirical evidence suggests otherwise,

Glen

—–Original Message—–
From: Tommy Gallagher [mailto:thomasmgal
Sent: Monday, June 01, 2009 9:51 PM
To: Bradford, Glen Richard
Subject: Re: CCGY

Hey Glen – congrats on getting the hedge fund started up. I wish you
luck. Does the ARM name have any significance? How’d you come up with
it?

A stock I came across tonight is CCGY – China Clean energy. Looks
like it may have bottomed in early March at .10 cents. With the
increase in diesel margins today of 8% and their new facility coming
online in September – this may be decent bargain. Their earnings
weren’t impressive for last year or the first quarter. I didn’t see
this in any of your round robins and was wondering if you’ve looked
into this stock at all. At 20 cents its pretty inviting. they were
initially on the docket to present at the china rising conference, but
they didn’t. I’m not sure why Glass half empty – i should stay away,
there is a bad reason why they didn’t present, couldnt get their act
together, were disinvited etc…glass half full – too much going on
with the economy, not enough time, another, some other benign reason
and now not everybody knows about this stock yet since it didn’t
present and its an opportunity.

looks like it is getting some notice with 175k volume today.

Below is the link to the china conference website showing they were
originally scheduled to present and a piece of their quarter
filing…let me know what you think.

Thanks,

Tommy

http://www.chinarisingconference.com/news/news20090416.html

A market beating friend on REITs:
Of the REITs, I like Winthrop (FUR), Brandywine (BDN), and Lexington (LXP) the most. There are others that I haven’t researched as thoroughly that still look fairly attractive, as well. HRPT Properties Trust (HRP), BioMed Realty (BMR) top that list.

There have been a few that I have recommended that have skyrocketed over the past few months to… Read More the point that I need to re-evaluate them. Those include Colonial Properties (CLP) and CapitalSource (CSE). For that matter, BioMed has spiked considerably.
———————————–
problems in china microcaps http://www.chinafirstcapital.com/blog/?p=552
—————————
his reccos: fur, bdn, lxp, hrp, bmr, clp, cse —- i like CSE the most based on charts only and i looked at it before. will look at it deeper (again)
abc – not cheap enough
atai – potentially worth looking into, explosive growth. wow, really expensive. nevermind
stv – too expensive, but you’ll probably make money. i have companies that make mroe money than this trading on the otcbb. retarded!
cner – appears too expensive, selling more than book value anyway
gfre – worth looking at again
pudc – i’ve established i like pudc.
simo – says they made money and decreased shareholders equity in 2007 to 2008? what gives? it’s cheap. worth a second glance
apwr – too expensive
agm – too shaky, has been in the past and i just don’t know
sclx http://crystalequityresearch.blogspot.com/2009/04/coal-fired-dragons.html
mic – too shaky, but looks cheap. too bad i’m not in the risk business, this is where most people would justify buying it because there is upside and say that the risk is justifyable. i don’t like risk
prsc – too expe
gbe – too risky
tiv – not profitable
cxpo – still like it.
smrt – profitable, solid quarter, not interested.
lei – oil and gas company not profitable in 2008? not interested.
nni – not interested
zbb – too expensive
cnoa – like this one. woohoo
utvl? i like this one. new ticker since it’s getting uplisted, UTA
expe – not cheap enough, but it makes you like UTA/UTVL — above. lol
pcln – not cheap enough, but it makes you like UTA/UTVL — above. lol
oww – not profitable. no wonder they gave me such a deal on spring break 2007.
ctrp – not cheap enough, but it makes you like UTA/UTVL — above. lol
cpst not profitable. not interested! http://www.distributedenergy.com/march-april-2008/microturbine-market-growing-1.aspx
sblk – looks very interesting, comparable to my idea FREE, looking at again
dac – contracted through Q2 2010, but their last statement screams risk
sacq – 17% dividend in the works paid in a couple days? HELP?! SOMEBODY, TAKE MY MONEY!
mxc – too expensive
mwhgf – pink sheets not interested
mwh:ln – too risky
snen – still watching, not buying
seb – too expensive
cmfo – still a winner in my book
atk – not profitable
ttm – too expensive
uoy – not interested, buy lpih or cneh, or cxpo instead
jada – well, last time it was too expensive at $2. Now it is 1/10th that cost at $0.19
mhh – not cheap enough

looking at deeper:
cse – like it, but i haven’t looked deep.
gfre – looks good, boo yah.
simo – turn around – not interested
sacq – $1 dividend? i don’t care, not playing this game
jada – looks like a chicken dinner winner, buy-time

sblk vs free vs dac

no need to look at because i like them:
cnoa
cxpo
utvl/uta

One last piece of wisdom—–

You don’t need an umbrella if:

1.You don’t mind getting wet.
2.You don’t go outside when it rains.

I would meet constraint 1 as far as rain goes and constraint 2 as far as money goes.

Glen

If you are looking at the US markets, you may believe that since early march investors are waking up and pouring themselves bowls of Risk Crispies for breakfast — if only Kellogg’s (K) made these too. The stocks that have been rallying the hardest are the ones that have been sold down sometimes more than 90% in the past 2 years. Now, do note that I’m not here to recommend what I consider to be highly speculative plays, like *snap* General Motors (GM) *crackle* or Ambac Financial (ABK) *pop*. Actually, I wrote this before I knew GM was becoming Government Motors. I have been thinking of GM as the Titanic. Nobody wanted it to sink, but they structured the ship with too much optimism and it looks to be taking all the shareholders down to Davy Jones Locker.

What I will say is that I believe that the more you pay for the stake in a business, the less likely it becomes that you will be able to sell it to someone else at a higher price. In the land of investing, risk comes from overpaying — the winner’s curse. I would say that it is certainly less risky to pay less for something if your objective is to make money by selling it off at a later date.

The way I see it, there are two kinds of risk in the stock market. There is good risk and bad risk. More emphasis should be placed on the bad kind of risk because by being able to avoid it, investors can outperform the market in the long run — which is what most of us are interested in. Most bad risks come from people that don’t understand what they are doing.

A few examples of bad (dumb) risk would be: picking up pennies in front of a steam roller, riding your bicycle down the Autobahn, lying under oath, drinking and driving, or deciding to fight the guy at the bar that looked at you funny. The outcome is unknown, but you are likely to not be excited about it. The examples here are the stocks listed above. Battleship sunk!

A couple commonly believed good (intelligent) risks: studying for an exam that you want to pass, going to work if you want to keep your job, or exercising and eating a healthy diet to feel good. The outcome here serves more as a confirmation bias that makes these risks sound self-evident, but they aren’t that obvious to everyone. I try to keep 100% of my portfolio in this category. A couple new ideas that I haven’t talked about yet are Patriot Capital Funding (PCAP) and MCG Capital Corporation (MCGC). That said, you might want to consider the rising tide in Bulk Shipping with Star Bulk Carriers (SBLK), FreeSeas (FREE), and Danaos (DAC).

There are only a few examples of definable risk: rolling a dice, most games in a casino, and flipping a coin. The outcome can be precisely calculated. There is nothing in investing that I would say has a definable future real net present value. There is so much fluctuation between stock prices, currency prices, inflation, treasury yields, and expectations that I don’t feel confident predicting anything with 100% accuracy.

Believe it or not, there are examples of no risk: jumping out of a plane with no parachute, driving your car at 100 mph into a brick wall, traveling into outer space without a space suit. The outcome is in my opinion well-known. Unfortunately, there is no such thing as a sure thing in the stock market. Deals can always change — even after they are announced.

Some investors justify making risky decisions based on their likelihood of achieving higher returns. In times of crisis, the price of the stock market goes down. Some perfectly good stocks go down more than 90%. Wouldn’t it be nice to be able to find these and pick them up for pennies on the dollar? That’s what I try to do. The trick is not stepping into the “fear breeds fear” market and wait for the lower valuations to begin to appreciate across the markets and signs of early strength. Then, hop aboard the rising tide on the companies marked down 90% in price that are fundamentally set to appreciate more than anything else you can find.

Some investors pay people to actively diversify their money across companies at mediocre prices. The investment vehicles here tend to be ETFs and Mutual Funds. That said — this is a generalization. I know of several mutual fund companies and managers that I really like and I would even go as far as to recommend them to people who don’t know how to invest themselves.

In the investment world, there are 2 questions. Where do you put your money? When do you do it? It’s just that simple. You could put your money into high flying stocks at market bottoms, or you could put your money into undervalued companies at market peaks. Either way, you are fighting the wrong battle. At the market bottoms, you don’t want to be fighting off Winner’s curse. At the market peaks, you’re missing the perspective of how a negative trend bludgeons most investors’ risk appetites to death. Even though I’m making money since June 2008, I’ve been fighting the wrong battle for the majority of my tenure. I was simply trying to outperform the market. That’s what I used to be interested in. Now I’ve refocused on not losing money and I’m doing a lot better.

Discloser: Glen and his investors own PCAP, MCGC, DAC, SBLK, FREE.

on the hunt through my old favorites to find a few that aren’t hurting except in their stock price. looking for something not china in this case, also not in the financial markets. lets work down a list that i screened out in order of stock price appreciation potential according to ben graham’s formula P/E = 8 + 2G

NOV – cyclical downturn mildly “entertaining” this company. worth a lot more and my feeling is that you wont lose money on NOV, trading at book value, trading above backlog
BUCY – as red hot as coal, selling for cheaper than its backlog, also hurting a bit with the recession
dxpe – damn, hurting a bit, but still cheap. more easy money for those rich folk out there that read my blog and can’t buy my pennies
aob – another great play, not hurting, everyone hates aob cause it is in china, not going to cut it in this search
psys – lowered guidance, still a growth machine as far as i can tell – i’d be cautious and wait and see on this one, not as confident as i am with those listed above. still deserves a P/E of 17.
azz – cut estimates for 2010 (in actuality, 2009, but that’s cause their fiscal ends in february). i think they’ll clear this hurdle.
sohu – chinese internet, better than bidu, struggling last 2 quarters, next!
ebix – WOW, KICKING BUTT AND TAKING NAMES! LETS GO EBIX! CHEER!
air – good for the long haul, but this looks good to me. this last quarter underperformed from a seasonal analysis/historical perspective. just fyi
sigm – really sucked lately, not a surprise. but, there’s something to be said … just not sure. this thing is sitting on potential, but too risky for my money right now — anyone know anything about IPTV?
ctsh – expensive, but lots of opportunity on this growth stock.
—- running out of time tonight
lxu – underperformed last quarter, sitting tight
midd – looks like a bread winner for the mid caps. go MIDD!
oii – hurt this last quarter
cmtl – cautious guidance “we’re not magicians” — gotta love that
joyg – double bottom, things looking up from here, kind of a turn around play.
pets – volatile trading, might want to swing trade this one for giggles. undervalued though, just not enough in the charts for my interest
zumz – another good one, another bottom of the cycle play. just not my thing though
kci, ande, beav — scored below AT&T on a brief screen. not going to even look at. but kci could be good. constant currency basis turn around! called it

EZPW — ARE YOU FREAKING KIDDING ME THIS IS SO CHEAP??!?!?!? WAKE UP PEOPLE!

buys: kci, bucy, ebix, midd, cedc, pcr, EZPW

agm – looks volatile, will look more tomorrow — don’t think there’s a reason to stay awake for this one.

Good Day,

I looked into this back in December too.

Back when it was below $1.

Thought it was a steal. http://www.divguy.com/2007/10/safe-dividend-stocks.html

http://www.glenbradford.com/blog/archive/2008_11_01_archive.html

I listened to conference calls, read the reports, did the research. But, none of the professors at Purdue really were able to answer my questions — I didn’t have the time and they didn’t have the time. As I recall, I was very concerned about the negative shareholder equity. I was scared out of something I semi-understood and definately-believed in. *Mental Note*

So, I missed out on 1000%. Won’t be the first time. Damn that sucks.

What do we do with PRSC now?

Well, I wouldn’t buy it now. It’s too expensive (that means less reward and more risk to me) than other companies I’m looking at. Forward P/E of about 10 based on what I can tell. The upside is only 200% from this point. I’m a go big kind of guy. I do my best to eliminate the risk of going home empty handed.

Nicola, thanks for bringing this to my attention. Even though I missed out, it’s good to know that I was right on this one. Learn from your mistakes.

Glen

From: Nicola Vallieri [mailto:n.vallie
Sent: Monday, May 25, 2009 8:45 AM
To: gbradfo
Subject: Stock tip

Dear Glen,
I am still invested with most of my holding into PRSC which I am going to keep on holding for another year but I’d like your opinion about it.
PRSC was a real stock from “Providence” to me. I went all-in in early november after months of real blood bath, where I lost 3/4th of my initial capital. I bought the same day Obama won the election for the following reason: US government can’t provide health service to everybody on its own. Moreover PRSC comes 1/3th of its business from states, which suddenly became nasty payers, causing a spiraling falling down of the PPS. I trusted the management when they said there was no problem with the debt convenants (see bk) and I was right. PRSC was the first company to exit the crises topping the russell 3000 index during the first quarter of this year. Looking forward I am confident PRSC will be the first company to regain its pre-crises value around 30$ cause growth is already there although it is still not so evident since the management decided to not pubblish their 2009 EPS guidance yet.
Anyway since I’m an engineer and I’m used to crunch numbers I tried to perform my own guidance with the data I got in early april. The result is the following:

http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_(A_to_Z)/Stocks_P/threadview?bn=25927&tid=2014&mid=2032
(I’m vitruvian_boy)

Any suggestion from you would be greatly appreciated.

Thank you,
Nicola (Italy)

gmcr, cbou, ddrx — i dunno. i had a list somewhere of the overpriced coffee stocks. i’m just saying like in Disney’s movie Jungle 2 Jungle. Get out of Coffee.
cphi – still like it
chbp – scared, not always profitable
skbi/skbo – will look again later during when the market is open so i can look at the bid/ask. this thing is thinly traded and might be good.
hlf – not cheap enough for me to buy right now, but will likely outperform the market in the next 2 years, revenues sucked last 2 quarters
utvl – this thing is going to the NYSE. Tom suggested that there are more shares than google says there are out there, dont have time to check. mcconnel (purdue professor) suggested 5% appreciation on average before listing and 5% decline in price for 6 months post listing on NYSE.
pcap – like it
acas – like it
mcgc – like it
gnw – like it
cno – like it
ahr – like it
grvy – seems poorly managed. no increase in revenues and yet increased expenses.
gfre – guidance includes dilution, i’m scared!
jadae – most of its income is from its discontinued operations in 2008
sclx – following up with company, added to my sorting list.
utvl – huge growth potential, will it be exercised? i’ll buy some
chcg – topside catalyst: franchise strategy, downside force: decreasing profit margins, i’ll buy some – i sold at around $1.50 to buy other deals.
gtls – prolly will appreciate in price over the next 2 years. just not enough for me to mention
snen – blah, just don’t know. what happens when this loss goes away? is the business growing? you’d think so… but there isn’t a very clear trend to me. negative cash from operations lately. lets wait and see .. throw this with nwd

i need to look at
bucy, cedc, midd, and my old stocks again to dump some money into for an investor that wants a safer play.

Now — for some emails:

First, a picture: I picked the bottom on this one. Luck or skill — your choice.

So, what do we do now? It’s got a P/E of about 10, maybe a little higher than that. You are getting a 6.4% dividend here. The trailing 12 month P/E is 14.

Historically trades between $60-$70. Was as high as $50 recently.

You’re looking at 1 year upside potential of about 75% (maybe going higher than where they traded historically cause they picked up National City). I think we could very easily sell out of this around $50 here shortly — or you could just bail now and try to ride something else with more upside.
——————————————————————————————————————————————————–
T — I didn’t bet on this one. I don’t know whether it will outperform or underperform. If you don’t know, don’t bet.

You bought it at $20, which baffles me because its 52-week low was $20.90 according to Google. So, you got the bottom, luck or skill.

There’s a double bottom on this one in October and March around $21. They just increased their dividend in Q1 2009. Their dividend is sustainable and pays 6.9%. There was some huge acquisition or something at the beginning of 2007 that exploded revenues. I think from mid 2007 to mid 2008, this was overpriced because of this abnormal growth.

I’d be getting out at $30. I might even be willing to jump ship at $25 depending on if there is something else out there that’s better.

I just downloaded all the larger companies I was looking at this fall. Out of the batch of them, there are probably over half that are still improving as if there wasn’t a crisis, but are priced now as if the crisis is supposed to hurt business.

I’ll be sorting through them here shortly and if I think I can choose 2-3 of the best to replace PNC, that’s what I’ll do.
—————————————————————-
UTVL-Good call on the details. It is incredibly undervalued compared to its competitors. It just got listed on NYSE amex. There is some dilution.

Their SSD segment is losing sales fast. I don’t know if that’s due to cannibalization or what. Other segments are growing well. This last quarter they did not grow rev or earnings, but I think that’s probably due to seasonality and the worst of the recession.

I’ll probably invest a little and see what new things develop.

Tom
On Sun, May 24, 2009 at 10:02 AM, Bradford, Glen Richard wrote:
I think you are wrong here.

There were about 41M shares outstanding according to their 10K.

Then they reverse split on march 31, 2009. http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=6513635

I think google’s share count is right.

What are your thoughts?

Glen

From: tcorm [mailto:tcorso] On Behalf Of Tom Corson-Knowles
Sent: Saturday, May 23, 2009 1:04 PM
To: Bradford, Glen Richard
Subject: UTVL

Hey,

UTVL has the wrong market cap shown on google finance. There are 38M share outstanding, so the real book value is almost $230 M. With $18M expected income for 2009, before dilution, that P/E seems high at over 20.

Tom
—————————————————
The price goes up about 5% on the announcement and transition weeks, then trails off 5% over the next 6 weeks

________________________________________
From: Bradford, Glen Richard
Sent: Sun 5/24/2009 10:09 AM
To: McConnell, John J
Subject: OTCBB to NYSE Stock
Hey John,

First, I’d like to thank you for passing me in Finance the 3rd module this year. Second, I want your opinion on the average stock price changes on a company that goes from OTCBB to the NYSE.
——————————————————————————-
Hi Glen,

if you like ACAS, you’ll love PCAP.

PCAP is in the same business, but has far fewer bad loans and a lower price/book, P/E and debt/equity.
They have violated bank covenants also, but only barely and recently.

Debt/equity is .96 vs 1.58 at ACAS, P/E (2010) 2.3 vs 4.2, price/book .22 vs .26

Slightly more expensive, but not much, is MCGC, which is in compliance with all covenants and will resume dividends earlier than the other two.

Among the chinese stocks, OPAI.OB is still trading at a P/E of 2, and half of book despite 30% growth.

I enjoy your articles very much. They are the best of all on SA, and I made a lot of money thanks to you.

Regards,

Fred

hgsi – wow? I don’t know what to make of this — it’s traded on 12 exchanges, what? a monster profit Q1 of 2009? Is that sustainable? I have no idea. Worth looking at if you understand these type of things. i clearly do not. Something Unusual around $38.9M.
ctic – another one of those non-for-profits as far as i’m concerned
cege – another one of those non-for-profits as far as i’m concerned
agen – not profitable in the last 5 years, negligable revenues, but a profit in q4 of 2008? Haha, too bad the profit is larger than the revenues. Looks like enron math.
htm – not profitable, i’d recommend back a look at dwsn and other geoimaging companies that make money. also maybe a look at GEOY — seems like you like big ideas — these are a few more
tgx – had a huge write down or something in Q4 2008. Profitable through the rest of 2007 and into 2009. But, not profitable enough for it to warrant a buy.
acad – another non-for-profit with negligable revenues.
sclx – rumor is: So 2008 was the first year with full production (100,000 tonnes). Since then they expanded to 350,000 tonnes (March 09) with plans for 1,000,000 tonnes expansion by the end of 2009 and 6,000,000 tonnes by the end of 2010.
khd – haha, this thing had like a P/E of 35. Whoops. still has a P/E of around 8. out of my price range at the moment.
to do:
xjt – someone remind me when this thing goes profitable or warn me before it does
abk – looks like the financial scape goat. this is the ultimate turnaround play. i’m not interested. this is what i see as a stupid risk. see you guys in vegas!
pmi – provides residential mortgage insurance products designed to promote homeownership. aren’t those CDS? Isn’t that what got us into this mess? still.. if this thing can put together some good numbers i’ll hop aboard. right now people are confusing risk with the cheerios they eat for breakfast. Even bad ideas are going up like pmi and abk. Maybe they ran out of milk money and are pouring beer on their cheerios, getting drunk, and trading. This makes me more cautious.
ddrx – looks overpriced. i might short in my CAPS account, Coffee is like private education was 7 months ago, overpriced. This reminds me of when I tried to brew beer-coffee. Didn’t work out too well.
nvax — gross non-for-profit
sqnm — gross non-for-profit
ghdx — gross non-for-profit
fpic – not cheap enough. i’m looking to sift through stock price plane wrecks to find planes still flying, this one is in the air still
feed – already looked at this one, nobody would guess about 2009 for me. might as well stick with HOGS, but i own feed

to do list:
sclx – following up with company
ddrx – short?
utvl – huge growth potential
chcg – revisit
cno – revisit

Anthracite Capital is Reinflating
By
Glen Bradford
Instead of talking about finance institutions that are being diluted like Citigroup (C) and financial institutions that are so hot they’re already above their November lows like Wells Fargo (WFC) and Goldman Sachs (GS), I’m going to introduce you to a better place where it’s bottoms up from here.
After getting the wind knocked out of it, Anthracite Capital shows signs of life. Granted that the price has probably exploded higher from $0.74 by the time this article gets published, let us use it at a baseline. What do we know about Anthracite at $0.74?
1. Anthracite is trading at a P/E of 0.487 if you knock out the Q4 2008 earnings nightmare and look back 1 year from Q3. The reason I took out Q4 is because the loss claimed appears to be a one-time huge write off, followed by positive earnings the next quarter.
2. Anthracite Capital is trading at a book value of 0.1.
3. Anthracite Capital is traded on the New York Stock Exchange. Let me repeat. This is a company cheaper than the listing requirements on the New York Stock Exchange. It either increases in price or eventually gets delisted.
All of these figures indicate that Anthracite is priced for bankruptcy. Where’s the good news?
1. They have pushed back the disaster twice already and have been in talks to resolve the issue. If I know anything about creditors, the last thing they want to do is run their debtors into the ground.
2. Anthracite was profitable in Q1 2009, just not as profitable as it used to be. If you optimistically flat line the profit figures from Q1 2009 into the future, your P/E is still 0.685. Note that Q1 of 2008’s Net Income Applicable to Common Shareholders is twice as large of that of any quarter as far back as I can see. So, comparing Q1 2009 to Q1 2008 isn’t fair to begin with. The bottom line here is that comparing the income of Q1 2009 to Anthracite’s history — things match up but the revenues are weaker.
So, what am I doing about it? I’m buying. I probably already have a sizeable position. I’d say you could add this to my suggestions for 100% in 1 month, but that would be an understatement. I’d be surprised if AHR didn’t see $2 by June 18th.
Disclosure: Glen and his investors own AHR.

Title ideas: China: Harder, Better, Faster, Smaller
China: Go Small Or Go Home
By
Glen Bradford
Cramer’s a buyer of Bucyrus. I’ve been a fan of Bucyrus since I came across it in late August 2008. Back then, I grabbed the coattails of the top of the roller coaster and rode it down from $67 to $62. If I liked it then, imagine how much I like it now at $23, on its way back up. Up over 100% from its low, why is this growing company trading so cheaply with a P/E of 6.86? I’ve got one idea. Opportunity cost. If you want to play china the right way right now, you have to start small and work your way up to see the big picture.
Bucyrus makes the mining equipment. Let’s take a look at some folks that may use this kind of equipment and are trading at a discount to Bucyrus. To set the stage, Bucyrus has a P/E of 6.8 and is selling at 1.7x Book Value. Let’s look at some undervalued Oil and Coal ideas that are all less than half as expensive as Bucyrus with respect to both metrics.
1. Puda Coal (PUDC) is being featured at the China Rising Investment Conference today and is set to run from 10:00-10:30am. Puda Coal is a supplier of metallurgical coking coal to the industrial sector in the PRC. They are currently in the process of vertically integrating their supply chain. Goldman Sachs just upgraded the entire coal industry. The reason for upgrading the industry is mostly due to China. Looking at these numbers, I’m going to agree with Goldman.
2. Longwei Petroleum Investment Holdings (LPIH) is one of the leading diesel, gasoline, fuel oil and solvent oil distributors/wholesalers in Taiyuan City, Shanxi Province, P.R. China. Do note that they’re expansion is being financed through their working capital. Bank loans in China have been unbearably tough to get this last year — so this is a strong point.
3. China North East Petroleum (CNEH) is engaged in the exploration and production of crude oil in Northern China. They just signed a contract to drill another 48 wells in the next 10 months, taking their total to 303 after the project is completed. Crunch the numbers and that’s 18% growth in production in 10 months.
4. Now, I would outline the advantages of China Energy (CHGY), but I did that 2 weeks ago. Instead I’ll give you a bonus pick that’s American. Crimson Exploration (CXPO) is even less than half of half as expensive by both metrics as Bucyrus. They are an independent natural gas and crude oil company engaged primarily in the United States, Gulf Coast and South Texas regions.
Now, I’m not telling you that you’re not likely to make a lot of money on Bucyrus right now. What I’m saying is that if you have two opportunities, and one of them is more likely to return more money than the other — it would make sense to buy into the one with better returns, right? That said, Bucyrus in my opinion is definitely worth more in the long run. It’s trading less than its backlog and that’s pretty much sinful.
Disclaimer: Glen and his investors own LPIH, PUDC, CNEH, CHGY, CXPO.

ddr – yes~! an REIT that’s back to profits and is priced for the underworld
gsol – too expensive. i’m bargain shopping, remember?
myst – can get cheaper p/s, p/e and more predictability elsewhere If they pull big numbers out of a hat on cloud computing I’ll reconsider this as an option. Cloud computing in my opinion isn’t a commodity type product. This illustrates mediocristian vs extremism. In mediocristian, like farming, anyone can do it — not a big deal. In extremism, like the NFL or NBA, not everyone gets the opportunity to play. But, if MYST is indeed a leader — that’s a huge opportunity, I just see lots of questionable news. Also, 1/3 of their assets are intangibles (good news is that it’s not in goodwill but in copyrights) Be sure to watch the trend of online membership services.
sopw – Selling at 4x of book value —also a killer for me P/S = 0.62 Not profitable — that’s a killer for me All sorts of stock option activity around $1 Most of sales are in asia, then to Europe then to USA, but the majority of their assets are in the USA
caah – doesnt make money, never really has, not interested.
nfes – not very stable incomes over the last 10 years. i’m scared — P/E of 4, out of my price range, P/S = 1, P/B = 1
chng – canl — too expensive. they are reverse splitting 2:1 trying to get listed. P/E is 3.86 and this thing is growing at 15%, the 10Q detective scared me off
cbak – not profitable, not interested, but i loved the battery idea
feed – eps .57 price 4.02 P/B 1.29 Growth 15%
HOGS: P 9.67 E 1.08 P/B 1.4 Growth 30%
igc – minority interest knocks this one to selling above book value. i’ll stick with chfi
free – growth of 15%, earnings of .88, price of 1.58, p/b of .275
CPBY – p/b 1.5, price 2.92, eps .5, growth of 14%
utvl – p/b 2.5, price 5.8, eps 1, growth 20%
alrc – eps .58, price 1.16, growth 30%, p/b .46
ygyb – eps 0.72, price 2.30, growth 50%, p/b 2
to do:ytec,cga,hrbn

Whoah Nillies: gnw,pnx,cno,ob,ahr,ddr

I’ll put up another radar here soon.

tomorrow alerts: http://www.chinarisingconference.com/presenting.html