GlobalSpeculation.com
Bargain hunting for the sport

hqge – too expensive
dang – no
txicw – waiting to hear back from the company on the terms of the warrants / txic
CNWD – i think this was the one that had more shares to issue than their authorized before the r/s and were going to issue after the r/s – no thanks at this price
AJGH – hear they sell shares and are good at it
CEHD – digging deeper
CNTF false = “You are getting the company for free at 3.9 ” – untrue – too expensive for me, check out liabilities, etc.
CNVP – still too expensive for me, but i’ll call it buyable
WATG – nah but cut the price in 1/3 and i’ll buy
NFEC – looks cheap. but my eps estimate was way high.. no — unless this last quarter wasn’t as bad as it looked at a glance
XIN – not sure — looks cheap though i think? earnings $0.50 i think, — result-nope but Price is implying assets (which is all inventory and cash) are worth only 60% of what’s on the books. definately a doubler
CISG – nah
MY – nah
TSTC – give it a year or a few years to play out
GU – waiting to hear about the tax thing. could be awesome
QXM/XING – still don’t like the chairman although he could be awesome.. just seems like he gets a good deal everytime. it was a net cash/arbitrage play.. and he screwed it up. thanks chairman
KUN – no
NCTY – great 4 year chart but the financials suck too.
BKE – no
SKX – no
3SBio, Inc. (SSRX) – no
Agfeed Industries Inc. (FEED) – no
AgriSolar Solutions, Inc. (AGSO) – cut the price in half and yes.
American Dairy (ADY) – no
American Lorain Corp. (ALN) – cut the price in half and maybe
ArtChina/CAE Media – private
Asia Entertainment and Resources (AERL) – great long term idea. not absurdly cheap. but cheap.
Asia Pacific Wire and Cable (AWRCF) – cut price in half and yes
AutoChina International (AUTC) – nah
Befut International Co Ltd. (BFTI) – cut price in half and yes
Beijing Wowjoint Machinery (BWOW) – anything less than $5 is a gift.
Biostar Pharmaceuticals, Inc (BSPM) – i believe so, yes
China Advanced Construction Materials Group (CADC) – i think this is the one that… i like cnam more.
China Agritech, Inc. (CAGC) -no
China Armco Metals (CNAM) – yes
China BAK Battery, Inc. (CBAK) – no
China Biologic Products, Inc. (CBPO) – cut that price down and i’ll consider
China Ceramics Co., Ltd. (CCLTF) – cccl ccclw – yes
China Clean Energy Inc (CCGY) – maybe… i dunno
China Cord Blood Corporation (CO) – nah
China Direct Industries (CDII) – bleh…?
China Education Alliance (CEU) – truth or dare right now. so no. but if you’re a trader, trade this thing. odds are it is real
China Electric Motor (CELM) – chart of financials is good, price in half looks good, prolly a doubler
China Energy Recovery (CGYV) – no unless i’m missing something?
China Environment Protection Inc. (CNVP) P/E of 3? yep. growth? yep. $1.85
China Executive Education Corp. (CECX) – nah
China GengSheng Minerals (CHGS) – bleh
China Gerui Advanced Materials Group (CHOP) – maybe
China Green Agriculture, Inc. (CGA) – blah
China Green Materials Technologies (CAGM) – small but great financials chart, out of my price range
China HGS Real Estate Inc. (CAHS) – cut the price in 1/3 and we’ll talk
China Hydroelectric Corporation (CHC) – no clue. lots of trading and then less less less
China Integrated Energy (CBEH) – cut the price in half, and i’ll buy
China Jo-Jo Drugstore (CJJD) – supposed to be ramping up huge – but i’ll sit tight
China Marine Food Group Limited (CMFO) – cut in 1/3 and i’ll buy
China MediaExpress Holdings (CCME) – oh this is soo fun
China New Media Corp (CMDI) – nah get cheaper, why is this public?
China Nuokang Bio-Pharma (NKBP) – another growth chart financially ignored, cut it in 1/3 and i’ll buy
China Oumei Real Estate Inc. – private
China Pharma Holdings, Inc. (CPHI) – cut it in 1/2 and i’ll prolly buy
China Redstone Group (CGPI) – missed the private placement, looking to add around their price.
China Ritar Power Corp (CRTP) – sitting on the sidelines, cut the price in 1/5 and i might reconsider.
China RuiTai International Holdings Co, Ltd (CRUI) – huge debt burden – nah
China Shuangji Cement Ltd. (CSGJ) – cut the price in half please
China Yida Holding Co (CNYD) – half off please
ChinaCast Education Corporation (CAST) – cut in 1/10 please
ChinaNet Online Holdings (CNET) – cut in at least half … this is small too.
Dehaier Medical System (DHRM) – cheap and small – too small for me i think.
Eastern Environment Solutions (EESC) – prolly not
Emerald Dairy, Inc. (EMDY) – nah

siaf – dividend is in question, wait
sokf – guess eps is .39 and price is 4.25, too expensive, my eps target was .85

cgsxf – guess eps of 2 would be a good match and 30% growth, who knows the price. my personal eps calculation: =29/20
SPRD – out of my price range
OKRG – nah
avnr -no
NSFDF – peak oil play
qtww – peak oil hydrogen play
Mina-mar client list reads like a retired hitmans trophy list…
KYNP KYNP – nah

recently moved, time to start going through lots of companies and see what’s up these days… reorient, and get the good deals. Note that just because I am not interested doesn’t mean you shouldn’t be. I’m ridiculously cheap. Paying less for more is my style and if it’s not a good deal it’s hard to get my attention. Again, this hunt is for the cheapest companies in the world. The 10 cheapest. Also note that in this post it’s likely that 90% of these stocks will outperform market averages over the next 10 years by at least a 2:1 margin. When I say too expensive, it might just be ridiculously inexpensive by most standards.

Our default reflex is that the world knows what it is doing, and that is extravagant nonsense, -Jeremy Grantham

LNDT – too expensive but should triple $3.63
CFSG – too expensive $7.24
HRBN – too expensive $17.62
CBPO – too expensive $10.38
NEP – too expensive $6.91
YONG – too expensive $8.14
CHRM – too expensive $9.57
CXDC – P/E of 7, growth, $5.66 — still too expensive for me
SGZH – nah
CLGZ – no
KUN – no
DHRM – small and cheap
amcf – outof my price range
cil – could be cheap
wemu – 81 cents a share in earnings, not cheap enough at $4

Barron’s also singled out Frazer Frost in their infamous “Beware…” article and I would not be surprised if Alpert will follow-up on the RINO story in this weekend’s edition.

CADC China ACM – too expensive $4.47
CBPO China Biologic Products – too expensive $10.38
CFSG China Fire & Security – out of my price range $7

CHNG China Natural Gas – too expensive $5.10
CVVT China Valves Technology – too expensive, got murdered though, $8.93
FSIN Fushi Copperweld – out of my price range p/e of around 6?
GSI General Steel Holdings -growth in revenues, but not in bottom line, lol no
HRBN Harbin Electric – out of my price range
JGBO Jiangbo Pharmaceuticals – out of my price range
PFGY Perfectenergy International – could be hit or miss 10 bagger… no clue.
PUDA Puda Coal – it’s in the double digits now..
RINO RINO International – nah
SCOK SinoCoking Coal – nah
SKBI Skystar Bio-Pharmaceutical – yeah, so why did i sell some the other day, i’m outta my mind
TBYH T-Bay Holdings – nah

PSOF – nah
LNDT – nah

HC International List
Stocks in This Issue:
CLEANTECH/CLEAN ENERGY:
China Green Material Technologies, Inc. (OTCQB: CAGM) – nah
China Hydroelectric Corporation (NYSE: CHC) – nah
China Integrated Energy (NASDAQ: CBEH) – nah
China LianDi Clean Technology Engineering Ltd. (OCTQB: LNDT) – nah
Sino Clean Energy Inc. (NASDAQ: SCEI) – nah

CONSUMER & BUSINESS SERVICES:
ChinaCast Education Corporation (NASDAQ: CAST) – nah
China Linen Textile Industry Inc. (OTCQB: CTXIE) – maybe
ChinaNet Online Holdings, Inc. (NASDAQ: CNET) -nah
Subaye, Inc. (NASDAQ: SBAY) – yuh

CONSUMER – FOOD/RETAIL:
American Lorain Corporation (AMEX: ALN) – hmm maybe? my eps estimate is .76?
China Marine Food Group Limited (AMEX: CMFO) – bleh
Emerald Dairy, Inc. (OTCQB: EMDY) – huh?
SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) – nah
Tianli Agritech (NASDAQ: OINK) – nah

CONSUMER – OTHER:
China Redstone Group (OTCQB: CGPI) – yuh

ENERGY:
China Energy Corporation (OTCQB: CHGY) – dunno maybe
Keyuan Petrochemicals, Inc. (NASDAQ: KEYP) – 50M shares. .71 eps. lph is better

HEALTHCARE/PHARMACEUTICAL:
Biostar Pharmaceuticals, Inc. (NASDAQ: BSPM) – sure
Winner Medical (NASDAQ: WWIN) – blah

INDUSTRIAL:
China Rutai (OTCQB: CRUI) – bad balance sheet i think?
China TMK Battery Systems, Inc. (OTCQB : DFEL) – blah
New Energy Systems Group (AMEX: NEWN) – sure?

TELECOMMUNICATIONS/WIRELESS/ELECTRONICS:
SinoHub, Inc. (AMEX: SIHI) – dunnno, seems that some people out there like it
Telestone Technologies (NASDAQ: TSTC) – baller status

Anyone follow SGTLF? – eps .77, bid/ask is at like $4 and $8.. nah

GDHI – pinky winky

HRBN: If people want what I’d call a “low risk” trade, consider selling Harbin Dec 2010 puts at the 17.5 strike price for around $2. You make a nice chunk of change for a month’s commitment to buy at $15.5.

Keep in mind, even BEFORE this buyout thing appeared, the stock has traded above $15.5 for a year.

I’ve sold a bunch.

-Fernando

They have warrants too

http://geoinvesting.com/companies/sgtlf_sgoco_technology__ltd_/research/comments_business_outlook/0027239

FKWL- no rally since earnings day — probably a great deal

This one has been very frustrating. No rally since earnings day and still only a 2.8 PE fully taxed going forward, despite the most blowout qtr I could have imagined. I wonder what the sellers know or think they know. Wade

CFOS (0.111) – New Chinese merger. PE of approx 2 for $41.8M market cap
FY 2010. $0.06/share eps FY 2010?

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7513709

We expect to finance our projected capital expenditures mainly by the net proceeds from future offerings after the reverse merger and cash generated from operating activities.

GRoss

377 million OS shares FD.
Market cap $57 million. They have $28 million in cash.
Earned $22 million in 2009 on sales of $64.5 million.
(approx .06 per share)

>> Six months ended June 30, 2010 compared to six months ended June 30, 2009
Our sales increased by 27.2% from $22.8 million in 2009 to $29.0 million in 2010 as a result of our effort in promoting our Wei Bao and Jiabao brands and an increase in our selling prices. We were able to accommodate the increased volume by leasing a 20,000 metric ton production facility in Gansu that was only utilized at approximately 66% of its capacity in 2009 and fully utilized during the first six months of 2010. These factors have contributed to our increase in sales volume of 8.5% from 35,666 metric tons in 2009 to 38,715 metric tons in 2010.<<

Net income for the Six months ended June 30, 2010
was $9.6 million. In the Six months ended June 30, 2009
net income was $7 million.

About the company (Waibo):
We are a leading PRC producer of high quality potato starch, a value added and functional ingredient in many different types of packaged and processed foods. Our corporate headquarters are in Hong Kong and our operational headquarters are in Kunming city, Yunnan province. Our factories are in Yunnan, Guizhou and Gansu provinces in China. Our potato starch is sold under the “Wei Bao” and “Jiabao” brands and we believe that our products are well known for their consistency, purity, quality and white color.

Potato starch is a functional food additive, offering strong adhesion without chemicals. Potato starch is also a cost effective thickener, which does not interfere with taste. In addition, our premium potato starch is white in color and thus can be added to many foods without affecting product color. Our potato starch is used by makers of noodles, instant noodles, dumplings, fishballs, shrimp balls, meatballs, and many other mainstream Chinese foods.

We believe that we are among the top five makers of premium native potato starch in the PRC and that our manufacturing presence in Yunnan, Guizhou and Gansu makes us the single largest producer in these provinces. Our current overall production capacity is 111,500 metric tons per year. Our native potato starch has consistently received the government’s highest rating, which affords it a premium price in the PRC market place. We sell our products to distributors and food processing companies. In 2009 we sold to more than 50 customers, with only one customer comprising more than 5% of our annual total sales.

PSOF - Pansoft Announces Unaudited Fiscal First Quarter 2011 Financial Results
Revenues and EPS Increase 59% and 44% Year-Over-Year

JINAN, CHINA -- (MARKET WIRE) -- 11/16/10 -- Pansoft Company Limited (PSOF:$5.00,00$0.01,000.20%) ("Pansoft" or the "Company"), a leading ERP software service provider for the oil and gas industry in China, today announced unaudited financial results for the fiscal first quarter ended September 30, 2010.
Highlights for the Fiscal First Quarter of 2011:
Revenues were $3.5 million, an increase of 59.0% compared to $2.2 million for the three months ended September 30, 2009
Gross profit was $1.7 million, an increase of 45.6% compared to $1.2 million in the year-ago period
Gross margin was 48.9%, compared to 53.4% in the year-ago period
Operating profit was $1.1 million, an increase of 55.2% compared to $0.7 million in the year-ago period
Net income was $1.0 million, an increase of 44.3% compared to $0.7 million in the year-ago period
Diluted earnings per share were $0.18, an increase of 43.6% compared to $0.13 in the year-ago period

NG - interesting gold stock, if you're thinking of buying gold, this is probably better, soros and marc faber and paulson are involved
bfti - yes
cuig - p/e of 10 right now, 20 million shares, $5M net income = .25 EPS but 2012 suggests 40million net income
CGDA - no
COFI - no
sgla - no idea
kone - too small for me
CTXIF / CHCG - just noticed I got some lowball .81 bids partially filled today. Also got some more .26 CHCG's today, although not many. Still on the bid for both stocks. Been on the bid for 2 weeks now.
yyin - preferred placement at $0.98, 41M shares outstanding FD, 20M NI make good for 2011,2012
cnvp - no idea? maybe? dont understand the business
awrcf - also no idea
cpdu - no
akrk - cant say yes now.
bwow - yes
cbeh - no
cihd - nah
csgj - sure but not the best
txic - yess
cclwf - yes
bspm - kinda
ltus - yes
ckgt - dilution?
CREQF - no .02 eps p/e > 10
agso – no

5 Stocks and 5 Reasons to Buy Them

By Glen Bradford, Contributor
TheStreet.com 10/13/10 10:00 a.m. EDT

Here are five stocks, and five reasons to buy them. But really, you only need to know one thing: The valuations are absurd.

But if you still want more justification as to why you should buy, I’ve listed a few reasons that you can use to support your own investment hypothesis. Pick your poison. That said, I’m fighting an internal battle; I don’t want to be too descriptive because I don’t want more people out there driving up the prices I have to pay to buy.

Short Squeeze?
How about 45% of the float being short, 11 days on the Regulation SHO list, breaking out of what was a six-month downtrend, increasing strength in business fundamentals, and a buyback equivalent to 30% or more of the float at current prices? Well, if you find yourself picking up the phone for your broker tell him you want to buy China MediaExpress (CCME_). Merry Christmas. You might want to compare China Media to Focus Media Holding (FMCN_), which is way more expensive.

Aggressive Buyer?
What are your thoughts on taking a low-risk ride on the gravy train thanks to investor Andrew Worden? He’s aggressively been snatching up incredibly inexpensive shares of China Armco Metals(CNAM_). He’s bought so much that he’s become an insider. Ride his coattails, I am.

Warrants? China Ceramics (CCLTF.OB) is cheap enough as it is, but I’m playing the warrants. The ticker for the warrants is CCLWF.OB, I think you should buy them too. If you don’t the next guy will.
Facility Expansion? Lotus Pharmaceuticals (LTUS.OB) probably won’t finish construction on its new facility this year, but likely will early to middle of next year. My thoughts? Who cares? It’s cheap enough without the expansion to warrant owning a large chunk in my portfolio.

Cheapest? Energroup Holdings (ENHD.OB) is single handedly the cheapest company out there. It made 62 cents a share in the first half of the year putting my normalized EPS estimate at least at $1.30 for a $1.70 stock that’s growing with more than $200 million in revenue and more than $25 million in net income. Note that $17 million worth of the shares traded at $4.40. You’re roughly able to get 60% off. Sold!

Like I always say, either buy right alongside me or watch my stocks go up. Booyah.

Bradford and his investors were long China Media Express, China Armco, China Ceramics, Lotus Pharmaceuticals and Energroup Holdings at the time of publication

“Not following my heart when I was young and ending up doing/being what I thought everyone else wanted me to do/be.
Eventually, enough life builds up that you can’t change course without hurting a lot of people. Now, it’s too late. My only hope is to prevent my kids from making the same mistake.”

So, as is often the case, I was doing a lot of nothing and was trying to identify irrational fears that I have. I have the fear of argument, the fear of tipping (I don’t like it and have a tendency to overtip and have traveled miles on foot and avoided food delivery like the plague). Anyway, I found a list of phobias online and thought it would be interesting to talk about a few of them that caught my eye.

Phronemophobia – or the fear of thinking, is something that you might acquire if you are easily indoctrinated and is a phobia that I do not have. Some people prefer to be ordered around rather to think for themselves.

Gnosiophobia – or the fear of knowledge, is confusing to me. I just find it difficult to fear knowing things. I tend to operate in such a way that I’m always trying to expand my bounded rationality.

Doxophobia – or the fear of expressing opinions or receiving praise is one that I can relate to. I’ve become fairly afraid to express my opinions. In fact, doing so has cost me a lot of money. My opinions are usually related to stocks that I’d like to own and let’s just say that it’s been costly to express them in the past.

Anyway, I couldn’t find phobias for what I’m afraid of. I’m afraid of overpaying. I’m afraid of higher prices. I’m afraid of having to argue terms — I prefer the terms to just be laid in front of me and I get to say yes or no. Where’s the phobia? Buffephobia? But in terms of being afraid of lower prices? Not really. I realized the other day that a reason that I’m not purchasing a particular company, in fact, the only reason — was that I was afraid that the price may go lower. Everything else stacked up. In fact, it’s the most undervalued company on my screen. So… I bought.

And then, to close, people even fear things that don’t even exist. How do you have a fear of the Bogeyman? Bogyphobia

I got a unsolicited email from some investment firm supposedly in Pakistan. They sent me this file:

http://www.glenbradford.com/files/Stocks/Key%20Equities%20Investment%20Plays.pdf

Looks to me like there might be some good value there.

Allied Bank, Habib Bank, Pakistan Oilfields, and United Bank don’t look too bad.

But, Why they sent me stuff like Indust Motor that has shrinking earnings growth is beyond me.

Looks like they just ran a SQL query on a database similar to the type of databases I used to scan for stocks before I realized they really offered no competitive advantage.

Dear Bradford

My name is Khurram Schehzad and I head the Financial & Economic Research team for one of largest investment banks in Pakistan. Our Research desk covers a number of securities invested in/followed by frontier/ emerging markets portfolios. In addition to research we also offer trading, execution and settlement services to institutional fund managers investing in the Pakistan market.

Please do let me know if there is any further information that I could send you in this context that might be relevant to yourself or your colleagues. While foreseeing significantly untapped value in a market trading at one of the lowest PEs in the world, the Research reports recently released by our team include:

a) Pakistan Investment Brief 2010 – Midyear update

b) Pakistan Energy Brief 2010

c) Pakistan Frontier Scrips

d) Pakistan Equity Strategy

Also, I would be more than happy to arrange a conference call to introduce our team and answer any queries that you might have.

Regards,

Khurram Schehzad
Head of Research
Financial & Economic Research Department
Invest Capital Investment Bank Ltd.
Head Office
C3C 12th lane, Ittehad Commercial Area,
Khyaban-e-Ittehad, Phase II Ext.
Defence Housing Authority
Karachi, Pakistan
Direct: +92-21-35 20 87 25
Cell: +92-300-251 8626
UAN: +92-21-111-111-097 Ext. (8725)
PABX: +92-21-35 20 55 20 Ext. (8725)
Fax: +92-21-35 31 38 85
www.investcapital.com

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Glen Bradford to Khurram
show details Oct 6 (1 day ago)
This is perplexing. Sure, I’m interested in any useful information. Are there any companies that I can buy at 5x ttm earnings growing at least by 20% a year with operating cash flows greater than $10M/year?
- Show quoted text -
–

Best regards,

Glen Bradford
CEO ARM Holdings LLC
www.glenbradford.com
www.armholdingsllc.com

None of the above is intended as investment advice. I can’t guarantee the information I gathered is from an accurate source. I may buy or sell any stock or security without prior notice.

Disclaimer: http://www.glenbradford.com/disclaimer.php
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Khurram Schehzad to me
show details 11:06 AM (3 hours ago)
Dear Bradford,

Hope this email finds you in best of your health. Yes, we do have a number of stocks which successfully fill up the investment criteria you mentioned. In this regards, please find attached a customized and short report on the potential stocks which have been screened out keeping your customized investment thesis in mind. We have provided number of stocks (some with high multiples or relatively low growth or better cash flow streams) so that you can pick/choose ones fitting your benchmarks.

You can comfortably expect more on the same and we wish to provide you a thorough our in-dept research support identifying stocks backed by solid fundamentals. Looking forward to hear from you soon. Take care and stay well!

Regards,

Khurram Schehzad
Head of Research
Financial & Economic Research Department
Invest Capital Investment Bank Ltd.
Head Office
C3C 12th Lane, Ittehad Commercial Area,
Khyaban-e-Ittehad, Phase II Extension
Defence Housing Authority
Karachi, Pakistan
Direct: +92 21 35 20 87 25
Cell: +92 300 251 86 26
UAN: +92 21 111 111 097 Ext. (8725)
PABX: +92 21 35 20 55 20 Ext. (8725)
Fax: +92 21 35 31 38 85
www.investcapital.com

Longwei Petroleum is one of my current holdings and I thought it would be worth my time to compile a list of possibilities as far as what Longwei can do and make it public. The idea is that any of the options can be combined together as long as it doesn’t have the same letter prefix.

I am sure that if I sat down I could come up with more options than this in terms of ways to enhance shareholder value. Longwei is incredibly inexpensive. As a long, I’d like to change this. Sometimes the best way to change this is to go public with profitable suggestions. As such, I’ve collaborated with myself to generate lists of options that the company can take and written them in a sort of press release format. I figure that a 30%+ growing company trading at 5x ttm eps might want to take some actions to expand their perceived value.

Maybe this is my first step to becoming an activist investor?

Shareholder Friendly Options

Option A1:

It has come to our attention that it is more shareholder friendly to increase the size of our public float by selling our own shares rather than issuing new shares at the company level and selling those. As such, we are announcing that the “insiders” of this company will be selling up to 10% of the average of the last 30-days in trading volume at the open market by placing sell orders on the ask and letting the market bid for our shares. We feel that this is an amount of shares that the market can handle and would assist in our objective of making Longwei a more publicly held company.

Option A2:

We are issuing 1 warrant for every common outstanding share at $3 to every common shareholder on record. It is the intention of the insiders to cancel their warrants. It is also the intention of the company to use 50% of the proceeds of these warrants to institute a stock buyback — and part of this buyback agreement would allow the company to purchase stock from 10%+ shareholders at 95% of the average price of the last 10 trading days.

Option B1:

Announce some sort of debt financing. Longwei has no debt. What’s so bad about debt if you can increase your ROE? My understanding is that for ever $50M they can expand. Last I checked the payback period was 18-months. If you do the math, from an investor standpoint — a debt financing is highly intelligent. In fact, it’s more than highly intelligent — as they would be able to pay off the interest in 3 months from existing operations. I’d love to see them leverage up their balance sheet and easily become a multi-billion dollar company.

Option C1:

Announce some sort of token dividend. Even $0.001/share per quarter would do it if you ask me. The idea in this case would simply be to start investors believing that the stock won’t go below $2.255 ever again and that the warrants are going to start be converted by those who believe in this premise.

Option D1:

We are announcing our intentions to use 25% of the cash from operations to purchase stock on the open market until potential acquisitions are more attractive than purchasing more of ourselves.

Option D2:

We have found being a public company an extremely perplexing experience. As we find that our shares are undervalued, we will be buying back our shares in the open market and trying to go private as long as valuations suggest that it is in our financial best interest to do so. We feel that our company is trading at a steep discount to its intrinsic value and don’t mind taking it private and keeping the profits to ourselves at the current valuation.

Option E1:

Announce that we realize that there are institutional investors that operate with certain restrictions and that we will be reverse splitting 1 for 3 — including the authorized share count as well. What this would do is enable people who can’t buy undervalued companies below $5 to purchase Longwei. Sounds easy enough.

And then there is the less shareholder friendly option:

Option F1:

Raise capital by issuing additional equity at below a forward P/E multiple of 8. Ballpark, any capital raise below $5. This illustrates to shareholders that the company believes its shares are worth trading for cash at this price. If the company thinks it’s worth less than $5 — I’m not going to argue with them.

If I was a China Stock
By Glen Bradford

If I was a China Stock listed on US exchanges, I wouldn’t really care for dealing with a lot of the people that badger me with relentless questions about nothing. That’s what FAQ’s are for. I’d probably compile lists of questions people have asked me and I have answered and put them up on my website and have a forum that investors could use to organize them if they so feel like it. That said, here’s more of what I would do.

I’d announce that we aren’t interested in raising capital from the equity markets because the price multiple that we’d be selling equity at is laughable and I’d announce that with regards to our cash flow from operations — we’d compare the ROI of buying back our stock to the ROI of using the cash to purchase an acquisition.

I’d announce that since we don’t need money, we don’t care about our stock price. I’d announce that we don’t care about short sellers, but we encourage them to drive the stock price low enough such that a buyback would be even more EPP accreditive for our long-term shareholders. We don’t really care much about short-term flippers at our company. I’d announce that a dividend does not make sense — as I feel that I could reinvest cash better within the company than the investors outside of the company could. And, until that changes, that’s the policy. That said, if the stock price ever gets high enough to make a EPS accreditive acquisition possible by acquiring another entity, we may use cash and stock to buy other companies.

I’d announce that we don’t really care about the bear raids on our stock. I’d announce that in the long run we believe that the price will reflect the underlying fundamentals but that in the short run, anything could happen. Obviously, we are undervalued because there aren’t enough people that understand us to support a reasonable market capitalization. We believe that over time this will change.

I’d even consider only updating shareholders with 10-Q’s and 10-K’s. I wouldn’t be interested in the shareholders that I’d have to update all the time with news. Spitting out news is not worth my time. That said, I think it would be reasonable to give “my best idea of what guidance might be if I had to give it, but don’t rely on this guidance because my expectations could be far from reality.”

We may want to reverse split our stock in order to uplist. We like the idea of getting long term shareholders. Some of these shareholders are unfortunately limited by what they can by by exchange listings or minimum stock prices — among other things. We feel that it makes the most sense to try to make ourselves available to as many people as possible.

That’s just me. Seems like some people get carried away with short term price fluctuations and that’s great for them. As for me, if it really got bad, I’d encourage 3rd parties to hire independent auditors to independently acquire our financial information from our banks, suppliers, and customers to confirm them — but I wouldn’t go much beyond that.

Heck, if the stock price goes low enough, I’d consider buying it all back and then some. I might issue a statement to short sellers welcoming naked short selling “because we have the cash to buy all of our shares back on the open market if the price reaches $x.xx,” and that if we do so, we’ll be issuing a $0.01 dividend and splitting our stock 1 for 1.1 to make them all have to present their shares to the transfer agent, crushing them.

Basically, to eliminate any confusion, we’d make a lot of decisions based on the following statement:
Those who’re making an effort to fail to understand me, are not a concern of mine. – John Galt, Atlas Shrugged, Ayn Rand

China Microcaps: Bottoms Up
By Glen Bradford
For the most part, this entire sector has to be proven innocent as it is presumed guilty — at least up till now. In the land of short-sellers; price breeds complacency. As long as they can sell more stock and drive the price lower, it’s all gravy. And then, you may find yourself with over 40% of the float short and these stocks you’ve been able to maliciously spread rumors about gaining traction. For the last couple months, this has triggered the fight part of the fight or flight natural reaction — but you can’t fight anymore. You can’t find shares to short. Flight! You’re seeing the end to an extreme sellers market.
I’m retroactively calling stock price bottoms. These are the stocks that short sellers are going to be running from the fastest! Since stock prices are a function of daily supply and demand for the stock — this is going to generate some enormous short term demand and price appreciation.
China Biotics (NASDAQ:CHBT) – 40% of the float was sold short. Rumor and fear mongerers were all over message boards and blogs touting their latest reasons for why China Biotics smells of scam. Roth recently downgraded them and word on the street is the analyst downgrading them was at the Investor Day looking for a job with those who were long CHBT. I’m going on record saying the bottom is around $9.
China MediaExpress (NASDAQ:CCME) – A company that didn’t appeal to me until the price got cut in half and now suddenly is at the top of my radar. Shorts never did get to raid this one. They likely won’t. Rumors indicate that the company is being incredibly proactive in efforts to shake out short interest, which was roughly 37% of the float. Put me on record – bottom’s around $7.
Oriental Paper (AMEX:ONP) was the first to really get attacked full out by a firm that appeared out of thin air. It’s not even worth mentioning who they are if you ask me. My leads indicate that at this point they aren’t even sure if Oriental Paper is a fraud. How’s that for conviction? Bottom’s at $4.
Universal Travel Group (NYSE:UTA) got attacked by a DeepCapture favorite who doesn’t even reside in the USA. Talk about an ocean of safety. Short from afar and spread rumors. Again, not worth mentioning. Bottoms at $4.
Longwei Petroleum (AMEX:LPH) is expanding into the Tar business as well. Bottom’s at $2 here.
China Armco (AMEX:CNAM) is setting the floor at $3. Worden is loading up. I am too. It is worth mentioning the perpetrator here. A shout out to Tony Gentile – Crisnic Fund – Stop ripping people off and just disappear already. All my opinion. But, make sure that when you disable your index page of stockholderloan.com — you take down the rest of the website too.
China North East Petroleum (AMEX:NEP) which recently got halted is back and engaging Ernst and Young as an auditor. Out of the gate, I don’t see this going below my bottom of $4.
Back when I sat down and sorted through 10,000 companies during the last market crash, I mostly was able to remove companies from my list of companies worth owning based on basic metrics. The stocks were usually not nearly cheap enough for me to even consider buying. At this point, I like companies growing at over 30% trading at earnings multiples around 2. It’s even more convenient when I can call the bottoms. With these stocks leading the entire sector higher. I’m going to be sad to see the great opportunities that I’ve been buying into start to disappear as stock prices go up.