Looks like one more guy is holding the bag from the highs and wants out. Hopefully some nervous nellies will pull their bids here.
I initiated a starting position in the 2.60's yesterday and will look to add more if it falls to $2.30ish. I believe it will see $5 to $7 soon enough (4 to 5X EPS). LDPE pricing was a bit better in q3 so EPS should be a bit better. It doesn't really matter, though. Even if earnings are flat the cash flow is high enough that they will have more cash than the company is worth in about 12 to 18 months.
Just FYI - Even though I've been bashing the stock in the short term, I am definitely not negative on it longer term. The Chinese economy is going through a major green push to clean up its environment and GPRC will be a beneficiary for years to come. At some point investors will warm up to it and it will trade at a reasonable valuation (not two times earnings and cash flow). So theoretically you could buy and hold this for several years and do well while waiting for that moment when investors finally bid it up to a normal valuation. EPS will probably be north of $2 in a year or two and if this does happen then you could see this trade at $20.
For now, though, I think its reasonable to see it trade at 4 to 5 times earnings which look like they will be around $1.20 or so.
i don't know your financial situation but i believe this is going above $5 possibly as high as $7 or $8 over the next 6 to 9 months. Entries matter, though, because it is very hard to hold on a pullback from $3.2 to $2.3 or only $2.6 even if it ultimately goes to $7-$8.
be easy on him. he's long ANV. lol
I'm not trying to sound rude but this almost always happens. momentum players hop on, it gets really overbought, then some johnny come latelies buy and then momentum runs out. People without patience bail and then the stock gets oversold. It has nothing to do with fundamentals. This company is very profitable and very cheap, but you have to pick your entries very carefully even if it goes to $7.
Then I'm in. This is about as cheap of a stock as it gets. But it was technically very overbought. Lots of suckers bought up above $3 and are bailing right now. All we need is one bigger momo guy that bought up there to bail and we should get a great entry here.