China Plays

Dec. 2.07 | About: China Pharma (CPHI)

Friday afternoon I decided to flip China plays by taking partial profits in (NYSEMKT:CPHI) and swapping the money into (CEUA.OB). With China Pharma up about 30% in just a few weeks, it is only prudent to take some off the table, and so I decided to sell about 35% of my overall position at $3.65.

I then decided to rotate the money into CEUA, roughly doubling my stake at $4.71. The stock has yet to participate in the overall market bounce, and has been trading very tightly in recent weeks. I have spoken in the past about my belief that the stock deserves a premium valuation due to its incredibly high gross margins, and while the stock has had a nice run, I still believe it is significantly undervalued. I am looking to continue to build a position here if I can get more shares around the current level.