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Longwei Petroleum Investment Holding Limited Message Board

  • amendoza amendoza Dec 1, 2012 9:42 AM Flag

    What should be a reasonable PE for LPH.

    Let's assume a forward E of $1. Chinese companies are selling for a PE of 2.5 on average, at least the small companies like LPH that I follow. This company is safer than most, so I'm thinking this should sell for a PE of 4.5, so that is my goal for a sell point.

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    • I just thought to bring this thread to the top of the postings. This is how to discuss a stock price and PE ratios. Not like some others on this board.

      Sentiment: Strong Buy

    • Given that oil consumption in China is one of the strongest growing sectors, the oil wholesale business, when located in a highly industrialized province, is absolutely the most predictable and steady growth sector to be invested in. Given the economic rebound evidenced in China over the last 3 months, oil companies should have a higher P/E than previously. So I would place LPH at a P/E of around 5.5 to 6 because of (1) the industry and sector are high growth, (2) the proven track record of LPH having successfully executed 2 major acquisitions in the timeframe of 3 years, (3) the legitimacy of this company being proven beyond reproach by SAIC/SAT tax filings reconciliation, and (3) the many steps taken that demonstrate shareholder value protection - including rescinding an S-3 that would have raised capital from share issuance for expansion, plowing $110M of profits into an acquisition that brings 70% growth to EPS, allowing warrants to expire worthless, and the management not selling a single share about 2 years.

      Sentiment: Strong Buy

    • I think over the next 12 months this stock is worth $6 to $8 a share conservatively. If earnings come in higher than projected in the 2nd, 3rd, and 4th quarters of 2013 as well as the 1st quarter of 2014 it could earn around .85 to 1.00 during that time. At 6 times earnings that is $5.10 to $6. At 8 times earnings that is $6.80 to $ 10 times earnings that is $8.50 to $10.00. So the range of $5.10 to $10.00 is quite a spread in my estimates, but it is still possible. All depends on how much confidence the institutions show through their purchases. What I find interesting so far is the stock has performed exactly as I expected since 9/24/12. I am really looking forward to the day it sets a new high above the $3.95 it set on November 8, 2010 on 2,101,500 shares, rising from $2.29 (almost the same price it is now 2.46) in just 27 trading days. Don't say it can't be done. Only this time it has all of the strength/achievements of recent events so well described elsewhere on this board. I really believe this company's management has done everything possible to boost the value of this stock....except maybe declare a 5 cents a quarter dividend. Good luck to all of us longs even though I don't think we will need it....just leave it up to the management of this well run company.

      Sentiment: Strong Buy

      • 2 Replies to enberry32
      • Agreeud

        Sentiment: Strong Buy

      • tdcburns Dec 2, 2012 11:20 AM Flag

        If this does break $4 and make new all time high that will be another record for US listed chinese companies as only a handfull of ones have done that VIPS being one. I did say last year many of these remaining real and legit chinese companies will one day go on to make new highs if they don't do cheap buyout before.

        The average 2 multiple many have says that most of them are still 3-7 times undervalued. And Facebood gets a 100 multiple, S&P and Apple get 15 multiples. These leading chinese growth stocks should get 15 multiples minimum.

        The fact China ETF's FXI and GXC bottomed and have been doing well is another good sign.

        GO LPH and my other favorite LIWA!!!!!!!!!!

        Sentiment: Strong Buy

    • It a chines stock
      its not a national company
      Right now its profits are great and growth is great so that gives it a pe of 10
      At any time the chinese can lower its profits and growth.That gives it the pe it is at

    • LPH PE should be about eight times earnings, but because it is chinese stock I would argree that a reasonable PE should be from 4.5 to 5. So, you and I are thinking the same thing.

    • tdcburns Dec 1, 2012 11:10 AM Flag

      If it had a PE of about 5 before the entire sector got trashed due to a few bad apples and multiple bogus short attacks and hit pieces and now that the fundamentals are even stronger and cross auditing with the PACOB is in the works whats wrong with a 10 multiple or higher considering S&P and Apple get a 15 multiple and who knows maybe even higher like say 100+ like Facebook.

      Either way, LPH is still way undervalued and should be $8+ along with many other leading chinese stocks. My other favorite it LIWA.

      Sentiment: Strong Buy

    • LPH achieved a PE of about 5 back in fall of 2010, just before the China sector got bombarded by negative press. So given that sentiment has moved up a bit among the survivors and given how LPH rigorously took multiple actions to preserve shareholder value, prove legitimacy, show transparency, and meanwhile plow their profits into an all cash high growth expansion, IMHO LPH should reflect a PE of approximately 6, which is similar to large Chinese companies with an equivalent degree of proven legitimacy. I am confident that as quarterly earnings approach one fourth of the EPS target (which is itself a very realistic target and possibly conservative), then price will approach the range of $6. Meanwhile, $4.50 is a realistic price goal during the ramp up phase of Haujie. That is typical after an acquisiton to see P/E usually approach an intermediate value between current and future earnings.

      Sentiment: Strong Buy

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