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Yongye International, AŞ Message Board

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  • Edmundoluk Edmundoluk Mar 10, 2010 10:57 AM Flag

    Need $9.00 or higher close

    Actually I think the trend is nicely in place and the stock is acting very well, with or without a $9 close today. I still believe that it is better for the stock to make a nice 2% move a day consistently than for it to shoot up 5% a day only to be brought down by shorts the next.

    It will do the shooting star thing when earnings come out. That's not even three weeks away. Given the current market sentiment and the popularity of the agri sector lately, my estimate for post-earnings PPS is $15 or above. (That may change if the market becomes pessimistic or if the sector turns cool - unlikely though.)

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    • "(That may change if the market becomes pessimistic or if the sector turns cool - unlikely though.)"

      That may also change if the earnings is a bummer.......

      I don't want to rain on 'our' parade- -I'm sure you know I'm long- -, but I'm a realist. That said, there's always that possibility.

      • 3 Replies to nypd2726
      • Beloved nypd2726,
        There better NOT be. I just closed my position on CHBT (for now) and used that money to increase my position on YONG (I am greedy). For once in a while, I would like to be standing in front of a mirror and NOT see the usual blithering idiot ;P

      • Well said NYPD. I know you are long, on the heavy.

        I thought through many ways that YONG could come out with a bummer of a 4th Q but the most likely scenario is actually with YONG surprising on the up side. The 4thQ is the slowest quarter anyway so no one is expecting much in terms of sales and profit. Rather, we are all expecting them to say that the warrants issue is mostly cleared up and that the reverse expense is fully worked into the income statement. It would be the biggest bummer if the issue is not yet worked out, but we've seen plenty of announcements and filing to believe that most of it was worked out in the 4th Q.

        That being said, I can see other things that could derail YONG. They have plenty of cash so another secondary offer is not in the works, and that's good. The potential bummer, and it can happen, is that upon earnings announcement Wu could guide lower than we are expecting for this year. A lot of things could be the contributing factor - warrants action, lignite mine acquisition, processing plant build out, pace of market expansion/penetration, animal Shengmingsu, continuation of preferential tax bracket beyong 2011. All of them are likely to bring good news, but I worry the most about the cost of getting the mine and the processing plant started. It costs money and could hit the bottom line significantly this year. Besides, it's already halfway through March and we have heard nothing about the mine and the plant. When will those assets be in place? If we don't get them fully operational until late in the year there will not be much improvement in the operating margin for 2010. Furthermore, it takes time to build the plant and get it operating smoothly, which begs the question of whether they have enough capacity to support their expanding sales this year. They are supposed to be making Shengmingsu days-and-nights during the 4th quarter to build up inventory. That's good, but many people will pick on the it because working capital will be trending negatively, and someone will say they need more money so watch out for secondary offering.

        So, yeah, it is not in the bag yet, not quite close. My estimate is only based on the most likely scenario, and is not cast in stone. You know I have truck loads of YONG shares. Even though the stock is still very very cheap at under nine bucks I am not betting the rest of my farm on it because, as optimistic as I am about the prospect, it is not a "sure thing". If it were a sure thing, the stock would be trading in the teens by now and you and I would be laughing all the way to the bank lol!

      • "That may also change if the earnings is a bummer......."

        Considering YONG just had the best winter sales ever including a one-day sales record set in Nov, I'd say the odds of beating the etimates are quite good.