We're consolidating those gains from the early fall. Get ready, though, for the monster truck rally coming. We're still trading at a miniscule valuation.
Granted I've been long since $1.90 and am biased :). Valuation matters though. People are coming back to Chinese stocks. If they're not all frauds like Muddy Waters / etc would like you to believe then why are they priced like this?
If this was in the US what would it trade at? $15? $20?
I just checked and yeah it looks like GPRC still trades at a ridiculous 1.5X earnings after backing out cash. Or if you want to nitpick then less than 3 p/e including cash.
Stay long. Going to $10 by 2015.
Tiny float on our little gem of a stock. What happens if we trade at more than 3 times earnings? Let's not forget that we have $1.50 a share in cash so we're trading at less than 2 times earnings ex-cash.
What if half of the float is gobbled up? That leaves a miniscule 2 million shares outstanding.
See you at $10.
too funny. you still think quarterly earnings are supposed to be audited right? when you get a chance, read up on the SEC's rules regarding financial statements.
hint: GPRC has an annual audit, just like 6,000 other public companies.
Take a look at my other holding, PEIX. Another perfect example of impatient people bailing and then it blasting off.
I've been long GPRC since $1.9X and have watched with humor as the impatient people sell on each pop. Eventually this will trade up to $10 a share, as long as it is not taken private before then.
SGOC: 20% higher price with less than half the earnings of GPRC. And it produces a commodity product that is subject to intense price competition.
No thanks, I'll stick with GPRC. Growth will be back in 2014 at some point. And we will see high single digits within 18 months here.
In addition to my last comment, don't forget that this company only has about 3.5 million shares in the float, assuming people on this board own 500k shares.
I don't think it's a stretch for a company with $1.20 EPS, $1.50 cash and trading at $2.60 with less than 4 million shares in the float to all of a sudden out of nowhere do a moonshot to $6. It would still value it at only 5 times earnings. Can it happen? Who knows. If people do come back around to Chinese ADRs...
Look guys it comes down to whether or not you have faith in the legitimacy of the company. There is no doubt in my mind. Recycling ain't going away and these guys have top notch facilities that are vetted by German and Chinese inspectors. Eventually the market will be forced to reprice these Chinese stocks much higher as people chase fewer and fewer opportunities.
Just because there were a few bad apples in China doesn't mean you should ignore the entire asset class. There are plenty of legitimate companies, no different than in the US. When the market finally feels comfortable with some of these companies, including GPRC, it will value them accordingly. I think GPRC should be worth $10 when that time comes. You don't get legitimate companies trading for 2 P/Es for an extended period. They eventually revert to the mean. Keep in mind that should this happen then GPRC will most likely use some of their equity to build a new plant and you will get an expanded multiple. I can easily see them doing $2 to $3 per share earnings in a few years. When investors warm up to Chinese equities and price them even at 10 P/Es you will get an 8 to 10 bagger on your investment here.
Stay the course and have faith.
Any of you fellers given any thought to the expansion plans they talked about? If they are able to put their cash / cash flow to good use they could really improve earnings in the future. There's just a lot of value in this company given its financials. This could be a company generating $2+ EPS annually with a book value north of $10.
At some point people will come back to the China plays, especially as the rest of the market becomes fully valued. I think people will look back and say I can't believe this was selling for like 1 times EPS after backing out cash.
I don't really see any reason why this is still public. Its creating $1.20 in book value every year, has $1.50 in cash, a book value of $5.40. Yet it trades at $2.50.
I doubt this stays public much longer.
Hopefully you didn't get scared out of your position. There was heavy accumulation going on. Those are institutions buying. Smart money loaded up on that dip.