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China Automotive Systems Inc. Message Board

bobpaulovich 35 posts  |  Last Activity: Dec 19, 2014 10:24 AM Member since: Feb 4, 2013
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  • The compensation program comes to an end on Jan. 31st. Anyone not accepting the compensation, maintains their right to sue. Remaining cases may not be that strong, for those not offered compensation up front.

    Also, the potential for a Justice department fine for GM, which would exceed the Toyota $1.2 billion accelerator recall, is low. This is because GM has admitted guilt for this defect, whereas Toyota, continued to hide and deny owning up to their accelerator problem.

    Sentiment: Strong Buy

  • Reply to

    Seeking Alpha Article on Impact of Fuel

    by bearsrunfrombulls Dec 7, 2014 10:35 AM
    bobpaulovich bobpaulovich Dec 7, 2014 12:54 PM Flag

    The dynamics are so positive for AAL. Hard to believe this stock was:
    $22 last December
    $44 in June
    $28 in October
    $51 as of Friday
    And targets now being raised daily up to $85.00+ !!

    Still, investors are afraid that these low oil prices won't last, however:

    The good news is that the oil cartel has been defeated. The very high gas prices we have been paying for years, has resulted in too much global supply. It took a long time for this to happen, but now is that time. The Saudi's have not cut production because they know it will not help to increase pricing. For now, they do not want to show that they no longer have any control over the pricing of oil.

    Oil had no business being at $3.50- $4.00 per gallon, for the last 5 years, in a very weak global economy.
    Even before the big recession of 2008, oil was well over $3- $3.50 as the economy was imploding.

    Over the last 5-8 years, too many companies have found more oil and now they must sell more oil to pay for drilling debts. They can't cut back.

    This is a long term swing. I can remember back in the 1970's the fear was we were running out of oil in 5 years. At that time, high prices led to finding so much oil that prices remained flat to lower for 15 to 20 years. Oil may be entering a long term period of normalized pricing, which may be in the $45-$55 range.

    I often look at for past pricing for gold and silver, and how long it takes for these markets to recover after years of major gains and thereafter the subsequent correction period.


    I feel very lucky that I'm still holding most of my AAL shares. The big move up over the last 18 months, and then the big Ebola panic, made it almost impossible to hold onto AAL. Jim Cramer was bullish on US Air in early 2013, then turned bearish before merger, and then went positive and negative several times in 2014.

    I did have faith in airline consolidation and the potential for lower oil prices.

    Good luck to you and all investors.

    Sentiment: Strong Buy

  • Growth in new business will drive CAAS higher. Both a China and a Global play.

    Sentiment: Strong Buy

  • GM has, (very near) zero exposure to the Takada airbag issue. Only in the Pontiac Vibe, joint made with Toyota in 2005.
    The GM ignition switch issue is now a past news story. Furthermore, GM has owned up to this issue and is compensating victims, pre bankruptcy and post bankruptcy.

    On the other hand, Takada and the Japan auto companies, never own up to anything. Just like in the Toyota accelerator ultimate confessions.

    The media will continue to pound on the Takada airbag issue, until these companies own up to the problem and compensate victims.

    Sentiment: Strong Buy

  • bobpaulovich by bobpaulovich Nov 26, 2014 1:07 PM Flag

    As the market pushes Deere lower, Deere buys back more shares.

    Also, just a shame that Deere has plenty of cash and continues to earn good money in a difficult environment. As a result, Deere can continue to buy back additional undervalued shares.

    Sentiment: Strong Buy

  • Reply to

    I dont get it ..This selloff

    by truth8360 Nov 19, 2014 1:09 PM
    bobpaulovich bobpaulovich Nov 20, 2014 3:00 PM Flag

    The dilution should be a wash, against the added profits CAAS instantly will get from buying out the subject joint ventures. Unless they overpaid to buy out these JV's?


    According to CAAS management, the shares were issued with no capital gain tax implications to the resulting sellers. They may sell some shares, but also hold shares, if they believe in the potential for CAAS.

  • bobpaulovich bobpaulovich Nov 20, 2014 9:31 AM Flag

    Since the better part of this issue is pre bankruptcy GM , I doubt that anything comes of it.

    Many lawyers will make big money from clients who know little about bankruptcy laws and limited liabilities.

  • bobpaulovich bobpaulovich Nov 19, 2014 7:42 PM Flag

    I did see Zack's issue a snapshot report today with an $8.90 target and a neutral rating. That is down from their last report of $11.00 +. They target $464k for 2014 sales vs. my math of $477K. Also 2014 eps of $1.14 vs. 2015eps of $1.17 and sales of $543k.
    Still rated as neutral, however, we are now between earnings reports and the year end report will be released by end of March, which is a long way off.
    I do think the weakness in third qtr sales may have more to do with the calendar related summer schedules for CAAS and customers.
    The updated Value Line report will be issued by mid December.

    Sentiment: Strong Buy

  • bobpaulovich bobpaulovich Nov 19, 2014 10:01 AM Flag

    Several points worth noting:

    CAAS can easily go private, the chairman owns close to 70%. The reason for not going private is that Major car manufacturers want key component suppliers to have transparency and ownership security, which is more likely in a public company. As a shareholder, we benefit with this type of situation.
    CAAS keeps a low profile with regard to future contract potential. This is because they do not want competition to know about any new business until it becomes fact.
    As CAAS continues to grow and post higher numbers, the stock will be pulled higher. The ongoing earnings are adding up and growing.
    The best report I have seen on CAAS was issued by:
    The Geo Team
    Dated May 29, 2014
    This report was posted on the Seeking Alpha web site.
    The report even has photo filming of CAAS factories, counting the number of trailers coming and leaving over several weeks.

    CAAS is also ahead of the curve with regard to electric power steering. Until recently, this transition to EPS was a concern.

    Sentiment: Strong Buy

  • bobpaulovich bobpaulovich Nov 17, 2014 3:24 PM Flag

    No doubt someone is selling.

    I guess the question is did CAAS pay any big premium to buy out the two JV's?

    The JV's did get the new shares with no tax gain implications. If CAAS bought out these partners with cash, the partners would have to instantly pay capital gains.

    I would think CAAS had to encourage the JV'S to be willing to takes shares on the basis that the upside potential for being a CAAS shareholder is better than being a JV?

    The car manufacturers prefer that suppliers like CAAS, do not have sub partners.

    You make good points.

    Thanks for your reply.

  • The recent purchases by Buffett are as of Sept. 30th.

    In a side note, GM stock tanked around mid October. With that, I'll bet that Buffett bought additional shares as GM went lower.

    We will know when we see his next quarter SEC filing.

    Any short bets are a gamble at this point.

    I believe GM will continue to post very good numbers, no matter what anyone thinks.

    Sentiment: Strong Buy

  • Looks like $145 mil.

    Company on 11/12 press release reiterated year over year 15% revenue growth for 2014.

    Add 15% to last years sales of $415 = $477 mil.

    Subtract $331 sales thru 9/30, and I come up with around $145 mil. for Q4.

    Earnings off of these projected Q4 sales should be closer to .30 to .32 per share.

    Anything can happen, but for now I'll go with the CAAS earnings press release from 11/12.

    I don't believe anyone is paying attention to what CAAS is projecting.

    Sentiment: Strong Buy

  • The big money has already cycled out of GM for tax loss selling. Now they are coming back in before the year end to buy back GM at close to what they sold for. The big drop in GM was about 30 days ago.

    All the bad news has been priced into GM. Only the justice department fine remains.

    GM accepts all the blame and is well into making things right as possible.

    On the other hand:
    Takada and the Japan car companies have a much more serious problem. With regard to airbag deaths and injuries, they do not admit to any wrongdoing. Just like the Toyota accelerator problem and the Firestone( Japan owned), tire explosion issue on the Ford Explorer. The justice department fines will be greater for these Japan companies, who don't come clean.

  • Chairman Andrew Liveris knows how to bring out shareholder value. Those share buybacks and the dividend increase, surprised everybody. That said, Mr. Liveris keeps doing the right things at the right time. Having fewer shares outstanding with lower energy and input costs means that DOW is now ahead of the EPS curve. These shares can only go up.

    Sentiment: Strong Buy

  • The Lawsuits will involve anyone who died or was injured in a vehicle, in which an involved Takada airbag was deployed. Even if the drivers in question were careless. These lawsuits will claim that the Airbag defect made the death or injury much worse.

    The other issue is the denial factor. Takada is acting just like Toyota did with the accelerator issue. Don't admit to anything until NHTSA forces you to do so.

    The difference with GM is that they have owned up to their ignition issue. They also are paying claims to pre bankruptcy victims, which they do not have to do.

    Takada, and the Japan Auto companies are still saying these recalls have nothing to do with safety.

  • Reply to

    Very good earnings report.

    by bobpaulovich Nov 12, 2014 12:21 PM
    bobpaulovich bobpaulovich Nov 12, 2014 8:05 PM Flag

    Looking back at Q1 and Q2 earnings releases, CAAS stock also went down a good deal, on the day of those releases. Then in the following days, CAAS did climb higher. I believe we will see the same pattern.


    Some of today's action may have been in response to quarterly sales being a little below estimate to the Value Line forecast? However, The margin improvement from selling more electric power steering units and the speed in which CAAS is transitioning over to this new system is the bigger story.

    Also, the visible new business continues to make CAAS a very good growth investment.

    I believe many people trade CAAS for many reasons. Today's action looked more like traders.

    Good luck to you.

  • bobpaulovich by bobpaulovich Nov 12, 2014 12:21 PM Flag

    New contract business has not been factored into price.

    With the consolidation of ZF and TRW, Auto companies are shifting new business toward CAAS.

    They need to diversify sources for cost control and availability

    The Global deal from Ford will be beyond substantial.

    CAAS also has the cash to expand without borrowing.

    Product quality, using Bishop Engineering design technology, is the best.

    This stock will go higher soon. Today's numbers have placed CAAS on the radar screens for Wall Street review.

    Sentiment: Strong Buy

  • bobpaulovich by bobpaulovich Nov 12, 2014 11:12 AM Flag

    New Finance Minister will be announced in 2-3 days. Could be current Chairman of Vale, according to Brazil news reports.

    President Rousseff to appoint pro business Finance minister after G20 meeting this weekend, (news wire).

    I think this change will help put in a floor for Brazil currency and stock market.

    Sentiment: Buy

  • For the last year or more, positive earnings, growing sales and new contract awards, have continued to pull the CAAS share price higher. This may be the trend we continue to see.

    CAAS is in a very good position for continued growth.

    Product engineering and quality is among the best in the world.

    Sentiment: Buy

  • Deere customers are saving big with much lower fuel prices.

    With the lower oil costs, they can farm more, and they can buy new machinery.

    Sentiment: Strong Buy

CAAS
7.010.00(0.00%)Dec 24 1:00 PMEST

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