Maintaining Entire China Security Position Despite Run-up

Well I have had quite a ride so far with China Security (CSCT.OB). I bought the shares at an average price of $17.68 per share back in July and August. In the past 3 months the shares have nearly doubled to $30.

When I wrote-up my investment thesis on the Company, I indicated that one of the investment catalysts that was forthcoming was movement to a larger exchange. On Monday that will become reality when the Company moves to the NYSE under the symbol CSR. This is great news for the Company as many institutional investors will now be able to look at the Company.

Despite the big move in the shares during the past three months, I am still very bullish on the Company. Earnings are expected to grow 28% this year and over 40% next year and yet the shares at $30 trade at about 26x this year and 22x next years earnings.

Growth is driven by both acquisitions and the increased installation of video surveillance throughout public venues in China. As you may recall, the Chinese government is requiring public venues in the 40 largest cities in China to install video surveillance in an effort to deter terrorism.

I am holding on to all of my shares despite the large run-up as I expect more happy returns in the future.