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Lihua International, Inc. Message Board

  • chips_dont_lie chips_dont_lie Aug 30, 2012 3:30 PM Flag

    If the stock price fell to below a $1.00 do you think

    mgmt. would use some of the 125 million cash to buy back shares or would they continue to hold it?

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    • ecgarcia21 Sep 2, 2012 12:13 PM Flag

      Base on my calculation, LIWA should be able to do a $5MM yearly plan of dividend or buyback. CFO is awarded of it, that is why she said the idea will be revisited on the second half unless business turns south. Do your calculation comes out difference than mine?

      Sentiment: Strong Buy

      • 2 Replies to ecgarcia21
      • At best we only know the sketchy details released on future expansion plans and operations. For somebody on the outside LIWA to forecast future cash requirements based on that little bit of incomplete knowledge is foolhardy.

        For example we know LIWA is intent on entering the CCA power transmission cable business. These larger diameter cables require a lot more metal which is probably why LIWA expanded its smelting capacity. Also they are ordered by the kilometer not by the meter as the currently produced small diameter CCA wire is. How much cash is needed to support production of the new product depends on how soon a market is established for it. If the product is quickly approved and an avalanche of orders comes in then management may need more cash than what they have. If a more likely scenario unfolds where the product is introduced and the company can comfortably finance its operations with cash on hand then they've said they'll reconsider the dividend and buyback issues. Not impulsively squandering limited cash is not a sign of weakness it's a hallmark of intelligent management.

      • reported cash flow is more than enough to fund all planned cap-ex, either give excess back via divy or buyback, cash balance has been rising for some time now, either give it to SH's or put it to work, it shouldn't just sit there.

    • Do you think Berkshire would pay a dividend like Liwa? Not even after 60 years?

    • What do you all think? Is there not some price point where a very large buyback would have to be warranted? At $1.00 a share, you are paying a buck for $4.00 in cash and getting the biz for free. How can you justify an additional smelter or whatever other cap-ex with that kind of return?

      • 2 Replies to chips_dont_lie
      • elpasojet Aug 31, 2012 11:58 AM Flag

        Another way of looking at CEO point of view, Central government wants these companies to go back to China, but at a cheap price not to benefit the US investors. CEO said the exact opposite during last conference call, LIWA is staying in the US market. My two cents?

        CEO is confident on LIWA's future which is the new CCA wire cable market acceptance and its profitability & growth path.

        CEO told US investors other than his $350,000 yearly salary between him & his spouse, he does not take any kind of stock benefit nor dividend compensation shows that he seriously means what he said.

        CEO knows when his company becomes a BILLION company within the next 12 months will prove to US market that LIWA is real.

        CEO also knows that CASH FLOW will grow in time when his new initiative yield fruits with higher profit margin & demand. If LIWA is still trading at $4, LIWA itself will have more than enough CASH to take LIWA private plus more.

        This sector now becomes a poker game, but it will take a long time to play it all out to find out who is the real winner.

        Down side currently is less than $3 and upside is $12, you do the calculation. Shorts are still getting their covering through trading everyday, just don't forget that.

        Sentiment: Strong Buy

      • elpasojet Aug 31, 2012 11:42 AM Flag

        At $1, it takes only $16MM to buy back all outstanding stock of LIWA. Your price of $1 is either a JOKE or you are just another BASHER. LIWA book value is $8 plus, your $1 represent 12 cents on a dollar. You are just incinuating that LIWA is a FRAUD, try to give me something that has some thoughts that put into it before you open up your month.

        Sentiment: Strong Buy

    • Why would they not buy back shares NOW to make an instant return on their investment?

      Sure looks like a fraud.

      I doubt they would buy back shares because I doubt they have any cash to begin with!

      • 2 Replies to peregrinearchery
      • Daphne has CFO has been pretty honest in terms of the outlook and what management's goals are. As she announced that they will try to do something to prop up the market price in the next few months, I assume, there will be some follow through at this point. It all depends on Chinese regulations and the exchange of RMB to USD. I assume this time around, they will be asking for approval. If they get greenlighted for a RMB to USD exchange, then your proof of cash will be shown on the price per share.

        You can't argue what Roy, the old CFO said, with what Daphne said. Even in the conference calls that both Roy and Daphne were on, Daphne would tend to tone down Roy's message to be more inline with a honest outlook.

        Buying in my opinion is a better bet than selling. You are screaming fire in a theater to provoke fear. Good luck with that. I think most of the holders here know the value of the stock. It's just how long it will take for the market to figure out that LIWA is way under-priced.

        Totally agree with ElPaso. You are a basher. However, I enjoy your laid-back rhetoric. I assume that means you are trying to sound rational, which makes me wonder how worried the shorts are trying to escape.

        Sentiment: Strong Buy

      • elpasojet Aug 31, 2012 9:38 AM Flag

        It is good that you start to use the term "SURE LOOKS LIKE" , "WHY" and twice on "I DOUBT" to create negative (?) with generic phase like "FRAUD", "COOK THE BOOK" to retail investors just like the typical basher will write up in YMB.

        Definition of BASHER (it fits you pretty good):

        An individual, either acting alone or on behalf of someone else, who attempts to devalue a stock by spreading false or exaggerated claims against a public company. After the stock's price has dropped, the basher, or the basher's employer, will then purchase the stock at a lower price than what he or she believes it is intrinsically worth.

        Sentiment: Strong Buy

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