isn't the problem with that logic that low valuations don't last forever? when PIR doubled from $0.10 to $0.20 couldn't you have said, "well, it was valued at cash before so it could go back there"....and then it went to $20+.
They're going to be expanding their facilities soon. They said they would on the last call as soon as they get through this Green Fence stuff.
Wouldn't be surprised to see it up a good deal after the impatient people bail. Those were solid earnings and the conference call was positive. They could potentially double earnings over the next 2 years. That would translate into a 7% yield.
If you're looking for another recycling play check out GPRC. They just took a hit because of a week long inspection that shut down their facilities as part of China's Green Fence thing. They've been holding back on expansion until after the new 10 year plan is unveiled. My guess is 2014/15 they will begin growing again. Trades at like 2 times earnings.
"China Recycling Energy Corp (CREG) took a big hit, down more than 15% to $2.00 per share, on news The Carlyle Group, through its Carlyle Asia Growth Partners III, L.P., sold its 12.47 million share stake. The 13D filing is dated August 25."
both recycling companies in China. GPRC down on one time inspection that delayed production. Trades at 2 times earnings with $1.50 a share in cash, no debt and $5.50 book value. Both are solid plays on the Green Fence movement in China.
Awesome earnings. Carlyle Group sold at the wrong time. Don't forget about GPRC either. They had a one time hit that is going to go away. Trades at 2 times EPS
CREG dropped today probably because of GPRC earnings. They had a dip due to a 1 week closure of their plant for government inspections. Otherwise, earnings looked solid. Still don't quite understand the valuation on that one.
I'm assuming lots of other value investors are coming to the same conclusion as they look for undervalued stocks that haven't risen significantly. I think that's why you're seeing non-internet related Chinese stocks rising. Muddy Waters will eventually be a blip on the radar in my opinion as the large majority of scams have been weeded out.
GPRC is very attractive even if they don't grow at all going forward. Given their cash flow, they should have about the same amount of cash on hand as the company is worth in 6 to 8 quarters. I know they will be looking to expand production which will consume cash but the company is still generated $1+ EPS without assuming any growth so it's trading at a little over 2 times earnings. They have about $1.50 a share in cash and no debt.
Oaktree Capital Group LLC (OAK), the world’s largest distressed-debt investor, is buying Chinese stocks after valuations tumbled, Chairman Howard Marks said.
The nation’s equities are “tremendous bargains,” Marks said at a media briefing in Shanghai today, declining to name the specific shares he’s purchasing. U.S. stocks are “fairly to fully valued,” he said.
“We are investing in Chinese equities along with emerging markets,” Marks said. “Investors have lost all confidence in China.”
While investors were too optimistic about China’s prospects three years ago, they may be too pessimistic now, Marks said. The Shanghai Composite’s price-to-book ratio is about half the level it reached in November 2010, while the measure’s price-to-earnings multiple is 42 percent lower.
“The swings of the pendulum were excessive,” he said. “Perhaps this time too.”