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  • thorleif.jackson thorleif.jackson Aug 9, 2011 6:44 AM Flag

    HOGS at P/E2011=4.1-4.7 and P/B=0,70

    Zhongpins second quarter results are excellent. Revenue is up strongly driven by increasing pork prices. Margins are holding a reasonable level. Dilution is modest around 14%. Altogether EPS increased 33% from $0.36 to $0.48. Guidance was increased to $1.80-2.05. Book value increased to $12.00.

    With the latest stock price of $8.45 HOGS is now priced at P/E2011=4.1-4.7 and P/B=0.70. Those are attractive numbers IF the company is legitimate.

    Other legitimate (as far as I know) companies like LDK Solar (LDK), Renesolar (SOL) and Jinko Solar (JKS) are right now priced in the range P/E2011=2.25-2.50. In October 2008 Trina Solar (TSL) was also priced around P/E2008=2.4. To me this suggests that HOGS' pricing is NOT abnormal for a legitimate company and therefore NOT proof of fraud. Still HOGS could be a fraud for all I know.

    For your information I have purchased a small position in HOGS at $10.05. I did so after thourough studies. To me HOGS looks like a legitimate company and I thus decided to take a bet against the shorts.

    Thorleif Jackson, Denmark

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