I researched this over the weekend, wish I posted this morning prior to the 8.82% rise today, but I still think its an enormous bargain.
$3.5 per share in Cash
$2.14 per share Accounts Receivable/Inventory
$0.16 per share Debt
$6.42 share price
Company has been beaten down because its a Chinese company, but it is much more diversified than your typical Chinese company. Plus its audited by a Big 4 firm, so you know the numbers are legit. Also, there was an $11.50 buyout offer on the table.
I researched this over the weekend, wish I posted this morning prior to the 8.82% rise today, but I still think its an enormous bargain.
$3.5 per share in Cash
$2.14 per share Accounts Receivable/Inventory
$0.16 per share Debt
$6.42 share price
Company has been beaten down because its a Chinese company, but it is much more diversified than your typical Chinese company. Plus its audited by a Big 4 firm, so you know the numbers are legit. Also, there was an $11.50 buyout offer on the table.
Risk/reward. At $11.50 per share, I'd agree with you. At $6.07 (when I got in this morning) or even at the current $6.42, I'd say that fright factor is already priced in and then some. Is there a chance it is a fraud? Sure. That being said, I'll take my chances with a stock price that has been beaten down by what looks like close to a 40-50% assumption this is a fraud. Throw the Big 4 accounting firm in and I'm feeling even better. I'm not saying I'd throw money into every Chinese reverse merger, but I just have a good feeling about this one. Obviously not a sure thing, I just like the risk reward here.
Let's revisit in a couple of months
Risk/reward. At $11.50 per share, I'd agree with you. At $6.07 (when I got in this morning) or even at the current $6.42, I'd say that fright factor is already priced in and then some. Is there a chance it is a fraud? Sure. That being said, I'll take my chances with a stock price that has been beaten down by what looks like close to a 40-50% assumption this is a fraud. Throw the Big 4 accounting firm in and I'm feeling even better. I'm not saying I'd throw money into every Chinese reverse merger, but I just have a good feeling about this one. Obviously not a sure thing, I just like the risk reward here.
Heck, forget months, make that days. Up to $7.93 (25%) in 7 trading days.
This stock was so grossly undervalued it was hilarious, but I didn't expect this quick of a rise. I was hoping to see it get to $9-$10 (a much more representative valuation in my mind) in 3-4 months if no more negative news on these Chinese stocks broke. This one far exceeded my short term expectations. No going to get too greedy here. Gonna take half off the table tomorrow morning, and let the other half ride hopefully up to $10.00
Quote Originally Posted by Wake2002:
Let's revisit in a couple of months
Heck, forget months, make that days. Up to $7.93 (25%) in 7 trading days.
This stock was so grossly undervalued it was hilarious, but I didn't expect this quick of a rise. I was hoping to see it get to $9-$10 (a much more representative valuation in my mind) in 3-4 months if no more negative news on these Chinese stocks broke. This one far exceeded my short term expectations. No going to get too greedy here. Gonna take half off the table tomorrow morning, and let the other half ride hopefully up to $10.00
Decided to close out the other half of this position on Friday at $7.76. Had higher hopes, but I'll take the 21% return in a little over 4 months (especially compared to the 8% decline in the S&P over the same period).
I still think it and most of these chinese stocks are undervalued in general, but there are better opportunities from a risk reward perspective, especially in this sector. Was hoping to see the $11.50 offer accepted by now. With that seeming as the ceiling from an upside potential, gonna let this one go for now.
Of course I now fully accept an announcement to accept to come out on Monday morning as that would just be my luck.
Decided to close out the other half of this position on Friday at $7.76. Had higher hopes, but I'll take the 21% return in a little over 4 months (especially compared to the 8% decline in the S&P over the same period).
I still think it and most of these chinese stocks are undervalued in general, but there are better opportunities from a risk reward perspective, especially in this sector. Was hoping to see the $11.50 offer accepted by now. With that seeming as the ceiling from an upside potential, gonna let this one go for now.
Of course I now fully accept an announcement to accept to come out on Monday morning as that would just be my luck.
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