Well it’s been a wild ride for every asset class in the last three months; and few wilder than emerging markets and their equities. There is considerable concern about the strength of export nations like
One of these bright spots is in emerging markets, particularly in
As I have said before the people of China are in a significantly different position than those of the US, India, Europe and others in that they are A) without personal debt....something their US counterparts can't brag about and B) flush with a significant percentage of savings and cash....something most of the world can not brag about. When you add in the pressure the Chinese government is applying to increase domestic sales you continue to have a strong recipe for increased domestic sales. So if the domestic sales of
To capitalize on
eFuture Information Technology (NASDAQ:EFUT) has become one of the largest and most respected of these local software companies. eFuture has won the business and trust of a number of small and mid-sized retailers, while at the same time, won the respect, trust, and business of large global companies looking to
In October EFUT announced they had won the trust of yet another global company in L'Oreal cosmetics, and the CEO of the company specifically addressed the credit crisis in the West, indicating that it was not affecting the fundamentals of EFUT. The share price of EFUT has been hit significantly hard as hedge funds and individual investors fled emerging markets and equities in general. This however, has made a significant value opportunity. EFUT is currently trading at one times its 2008 revenue and the market cap is only 3 times the size of cash it has on hand while it has become debt free! EFUT will announce results for the third quarter on Thursday after the close. During the third quarter they paid off 4 million or 80% of their outstanding debt via convertible shares, which converted at a minimum of 19 dollars per share.
The management of EFUT has continued to show their strength and savvy as they grow the company, pay off debt, and maintain strong cash on hand balance sheet. Management has indicated they would like to continue to acquire competitors to enhance growth but they are also generating a lot of cash through their monthly service fees. I believe that this will allow EFUT to maintain a strong balance sheet going forward even as they continue to purchase competitors to enhance their market share and offerings.