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VisionChina Media Inc. Message Board

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  • peristentone peristentone May 6, 2009 1:20 PM Flag

    Lets back out the cash....

    Okay, but your point is subjective and mine is objective. When you take the operating cash flow and you divide it by the company's enterprise value, you get about 10%. That means in effect for every dollar you invest, the company is able to generate about 10 cents of operating cash flows.

    A 10% earnings yield is not very high, even for a safe Fortune 500 blue chip. A small cap Chinese company needs to be yielding at least 20% (preferably 25%+) to make the risk worth taking.

    So they may have all the opportunity in the world, but the current share price makes that opportunity look like it is priced in.

 
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