Eventually the cro-oked CEO and the board have to come forward with a decision about the buyout offer. We shall see a spike regardless of whether they accept, reject, or revise the offer. Meanwhile I keep adding more shares they try to drop the price. The lower the better.
Anyone can easily check and see through your lies. It has been trading within the same price range of $1.20s to $1.40s during past three months. I have been adding shares in $1.20s and now hold 43,000 shares. I let you know when I cash in some profits.
No I missed it. I share you positive feeling. But I expect much better than $3.00 by the end of this year.
southern, thanks for wishing me success. But I think it is getting much more difficult to land a "grand slam." The last big ones I had were FNMA and HAFC with nearly 400% and 200% returns. But I also had my "whiffs" of the type you describe. Once I held a significant position on margin in CoSine (COSN) which traded as high as equivalent of upper $400s and like many other overvalued stocks had a sharp decline in 2001 and along with many others who used to trade on margin in those days suffered through a huge loss on a margin call. Fortunately I recovered within two years and my portfolio is now 15 times higher than it was then. I rarely trade on margin now. Amongst the best lessons I have learned over the years is that the market never ceases to humiliate you no matter how good and how confident you are. Good luck with your plans.
Thanks for the correction jshpst. Could this be a Freudian slip? Actually I noticed it after posting but did not want to make another post correcting it. Always my great pleasure to get caught by an erudite subscriber.
southern, unorthodox loan guarantees by American standards is a common Chinese business practice which is rather cultural and historic in conducting business though it also serves as a cover for fraud and a major problem with many listed Chinese stocks. In case of fraud the collateral does not exist or is highly overvalued and sometimes the same collateral is used multiple times as a guarantee. I did take into account the loan guarantee by discounting the cash by 50% and assigning the company a lower enterprise value which even with a premium cannot result in more than upper $1.00s if there is a merger/buyout. However, I agree with your assessment that our best bet is the repurchase program and the market behavior driven by this expectation. I notice that in case of many stocks we have both traded or considered trading you are more pessimistic than I am. This may have something to do with your approaching retirement but I also think that you are generally more scientific and risk averse in evaluating and considering a stock while I rely more on the behavioral approach and don't shy away from highly depressed stocks that seem promising based on the trading behavior but also carry greater risk. Your method is much safer but as you know the higher the risk the higher the reward and I don't plan to ever retire :)
danielzaf, thanks for the response. You are not fully disagreeing with me. I also expect the price to go above $1.00 and a merger/buyout premium would put it at near $2.00 unless we see a significant increase in the price to above $1.50s before a merger/buyout which is rather unlikely. I have taken into account the guidance which may be one reason that the company is withholding the repurchase perhaps expecting a natural increase in the price before implementing the repurchase to "defend" the higher price. But the improvements in the financials have to be rather significant in the next few quarters before we can even approach $2.00. In case you are correct and we do better than I expect I will be so much happier.
I have already taken out nice profits selling about half of my holding at over $1.00 and so far despite buying back some shares my current holding is in Green. I will buy back more shares if we break below $0.60 and expect the price to eventually climb and yield another round of profit taking. I accumulated CHOP not only because of its highly depressed price but also because of good possibility of consolidation in the steel industry in China which could result in a merger/buyout. I have bought two other highly depressed stocks in the same field for the same reason. Although I expect the price to eventually go up, I don't see much of long term prospects for a solid recovery. The one year return for CHOP is negative 60% and the five year return is almost negative 90%. So much needs to be accomplished before the stock can gain prices in the $2.00 to $4.00 range and given the current and near future condition in the steel industry and the competency of company management that is rather implausible. But a merger/buyout can be in the upper $1.00 range and that is an extra bonus beyond just going over $1.00 which many of us are expecting with the repurchase plan if ever implemented. Unfortunately, this is bad news for the old timers who have paid much higher prices but from my perspective it is the best outcome we can expect. If there are some optimists amongst you that disagree, I appreciate your opinion.
But he didn't say when and at what price he will draw the line, dig his trenches, and begin defending the price. It could be at $0.52 where it all began or theoretically at any other price. Moreover, defending the price technically means that you don't let it go lower. Nothing in this implies an offensive pushing the price higher. In sports and in the military, defense means keeping the opposing or offensive side in check. It does not mean offense though defense can sometimes turn into an offensive push, but you have to first defend before you offend. So far there is no sign of our CEO defending the price and as far as an offensive is concerned he best knows how to offend the shareholders.
Why would he sell? More like hoarding cheap shares rather than selling. He and his associates are after a buyout.
Perhaps we have to wait till tomorrow to know why. Although I have been buying back under $2.50s, I did not sell any this morning. These are low prices for PME. I will hold until at least we are above $3.00 range. I am pondering why they hired the accounts to do an audit. Could it be for a very good reason?
gocolts, I firmly believe that this game will end by the end of this year. I don't know to what extend that will satisfy you but I hope that it will not be as bad it has been so far.
$2.50 to mid $2.60s is a safe range. I just picked up a few thousand shares at $2.65. Will continue to buy back with the dips.
Thanks for the offer. But I prefer to buy at around $2.05 or lower and have done alright. This Mickey mouse trading will continue until the earnings or a buyout offer whichever comes first.