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China Precision Steel, Inc. Message Board

  • cabogordon cabogordon Oct 12, 2007 9:03 PM Flag


    The Q4 acquisition - I believe this is a done deal. GSI has simply
    chosen to consummate it at the end of 2007 so that they had plenty of
    time to bed-in the Longmen acquisition. Bear in mind that Longmen was
    7 times as big as GSI's original business in terms of sales and
    profits, in other words GSI has swallowed an elephant. This east coast
    deal virtually doubles GSI's size again. That, plus Q3 earnings should
    certainly move the stock substantially. I'd guess it should be at or
    near $20 by year-end with decent Q3 results and the new acquisition
    announced. But yeah, on days when Nasdaq drops 70 points (that's about
    what it did y/day from peak to trough) GSI stock will suffer a bloody
    nose. That's the nature of investing, especially with fast moving
    stocks and this is one. Take a look at the stock performance this past
    year for GSI on - big big step-ups from time to time and
    after each one it seems to settle back a little. I see no reason why
    we will not have further big step-ups.

    Speaking about the long-term I would point out that even without the
    Q4 acquisition the company currently stands to earn $0.80 to $1.00 per
    share in 2008. That puts the stock on a 2008 p/e of 12-15. Very good
    value. Now layer-in the Q4 acquisition and EPS become about $2.29 for
    2008. The stock, at $12 is extremely good value for the long-term. As
    I said in the article I believe the stock price will move forward in
    spurts from time to time when significant news comes into the public
    arena. The next two big events being; (1) Q3 earnings anouncement
    approx Nov 20 and (2) confirmation of the East Coast jv in the next
    several weeks.

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