"The confluence of these events may well create the mother of all short squeezes and drive the price of the stock by the end of April to double where it is today."
Your article was published on April 25 and you predicted a double by the end of April, which is today. Were you serious when you told your readers it might double in just 4 trading sessions?
Unfortunately I couldn't find a way to short this kind of prediction -- mother of all hypes! Otherwise it would have been a no-risk, high-return bet. The proof was in the stock performance of past four sessions.
China Xiniya Fashion Limited: Can We Look Into This Made In China Stock Without Prejudice? [View article]
I'm no apparel industry expert. But here are a few things I have read recently on China apparel industry M&A. (1) Apparel brands have difficulty differentiating themselves thus increasing the discretion needed in assessing acquisition targets. (2) Inventory problem is rampant throughout the industry, thus warranting extra caution. (3) Famous brands are now focusing on acquiring brands only vs. including manufacturing operations as well.
(4) Savvy managers are pushing overseas, driven by (a) opportunity to expend to foreign markets, (b) capital stress experienced by foreign operations in today's sluggish global environment, and (c) Chinese consumers' special enthusiasm/appetite in foreign brands.
There's an analyst specifically asking about Mr. Xu's ambition overseas on recent CC, which I believe has to do with the recent trend mentioned in (4) above.
A little digress here. I was once studying XNY when it was trading in the $4-5 range. I found myself unable to verify an industry award company mentioned in one of its filings. But I found ZA got that same mentioned award instead. It was only a casual study; so I do not know if my methodology was 100% reliable. It was just enough for me to skip this name myself.
China Xiniya Fashion Limited: Can We Look Into This Made In China Stock Without Prejudice? [View article]
Alberto, you have written a very detailed piece regarding the company. Kudos.
My $185MM cash number included RMB 50MM in time deposit. To me, spending $10MM in repurchases would be able to reduce 40% of float. Or, like the analysts on the CC suggested, a $0.25/ADS dividend would only take $14 or $15 MM. That, compared to the total amount of cash, is not going to put a great dent on company's war chest. So, that shouldn't impact any M&A much.
There're also massive risks involved for a co. without track record to suddenly embark on outsized M&A's.
China Xiniya Fashion's CEO Discusses Q4 2012 Results - Earnings Call Transcript [View article]
Company has $185MM cash. Yet it repurchased only $1.7MM worth of ADSs.
Now, it only needs $25MM to repurchase all the float. So the company can repurchase all the float and still be left with $160MM of cash, more than ample for pursuing M&A and other initiatives. Yet, on Q4 conference call, Mr. Qu stated there's no intention to repurchase more shares, nor issuing any dividend. All because Mr. Xu thought he needs the cash for M&A and wanted shareholders to think long term.
China Xiniya Fashion Limited: Can We Look Into This Made In China Stock Without Prejudice? [View article]
Company has $185MM cash. Yet it repurchased only $1.7MM worth of ADSs.
Now, it only needs $25MM to repurchase all the float. See the company can repurchase all the float and still be left with $160MM of cash, more than ample for pursuing M&A and other initiatives. Yet, on Q4 conference call, Mr. Qu stated there's no intention to repurchase more shares, nor issuing a dividend. All because Mr. Xu thought he needs the cash for M&A and wanted shareholders to think long term.
So go figure. Doesn't this raise the question of whether the co. really has that much cash on its balance sheet? Just asking, other ways of interpretation should be possible too.
I wouldn't be investing in any Chinese company that sounds too good to be true. Even Deloitte wasn't able to figure out if LFT really had the cash it claimed to have.
How To Become A Millionaire Without Really Trying [View article]
Satan,
I agree with your analysis, and in particular on "It doesn't take a crystal ball to know you are in a bear market nor near new market highs." But I would like to rephrase your statement into this: you do have a murky and defective crystal ball at your disposal:
(1) [Overextended market + low volatility] signals a top. (2) [Depressed market + excessive volatility] signals a bottom.
Not a perfect timing tool since your crystal ball is "murky and defective". But it helps a lot.
There is wisdom in this wall street saying after all: "When VIX is high it's time to buy; when VIX is low it's time to go."
And I also like your idea of "increasing leverage inversely to market risk."
XPO Logistics 4Q12/FY12 Scorecard And Investing Outlook [View article]
Another thing I left out, the organic growth in FY12. I think this is getting harder to figure out as time passes by. But one can still do some reasonable estimate based on what management made public.
After accounting for 25% (management put it at 20-25%) of Kelron's unprofitable businesses, the organic growth for FY12 is basically flat.
Considering what had happened to Expedited, this performance does not seem to be too shabby. And it might also have to do with the soft macro.
But I'm not exactly happy about it. I'm going to do a competitor analysis in the future to give this a fairer assessment.
So, after considering the two factors I added in this Comments area, I do recommend fellow investors to:
(1) keep optimism at bay and be rational, (2) take a longer-term view.
I have full faith in the immense potential in this company and the entire industry. Mr. Jacobs' vision just makes sense. And things will become a lot clearer in the next couple of years.
How To Become A Millionaire Without Really Trying [View article]
That's the right message, satan2liberals. (I hadn't read your comments when I posted the above. Now I have read them.)
If you time UPRO correctly, you can certainly build a fortune. But I certainly won't buy and forget it. I will buy only after significant pullbacks, corrections, or when I think a bear market has bottomed. I would sell (in steps) into market highs.
I certainly will not buy after a market has gone through a magnificent run. That means I'm selling now and will buy back after the spring or summer slump that's coming our way. I'm getting back then because I'm bullish on the macro outlook in 2H13 and maybe early 2014 as well.
I might miss a portion in a home run; but that's fine with me. I think some missed portions will be lost in subsequent slumps anyway.
XPO Logistics 4Q12/FY12 Scorecard And Investing Outlook [View article]
To be unbiased, I have to add that comparing EV/Revenue, EV/Gross Profit ratios on forward revenues and gross profits has the following limitation.
For an aggressive acquirer like XPO, forward revenue, gross profit, etc. contain a big expected contribution from future acquisitions, which almost certainly means draining of cash currently on balance sheet or future dilution of some sort.
The implication is, then, that EV is kind of understated relative to the forward revenue, gross profit used to compute the ratio. (For a given share price, reduced cash, increased debt, and dilutions all cause EV to increase.)
Unfortunately there isn't a fairer metric that can account for this limitation.
So, it does depend on if you are a believer or otherwise of if the acquisitions, combined with scaling-up and efficiency improvement, will create value in the future, at least to some degree. I have no doubt that scale wins out in the end.
Congrats on yet another great piece on AAPL. What's your thoughts on potential new categories like iWatch and iTV? Do you think they will come and when? Will those help with the stock valuation? Thanks.
XPO Logistics: Buy This High Growth Story On The Dip [View article]
If you have only a minimal position or no position at all, I think $17 is the right price to begin accumulating. However, if you already have a sizable position and are looking to add I recommend waiting for a little more pull back that might come with any general market weakness. That looks like $15-17 range to me.
As always, JMHO. Thanks for asking and good luck to you, Flytowin.
How To Become A Millionaire Without Really Trying [View article]
Your argument indeed holds for the past six decades or so. But nobody should take away complacently that S&P 500 is not volatile and as such one can buy and hold UPRO with great peace.
(1) S&P 500: 1527 on Mach 24, 2000, and 1531 on Feb. 19, 2013. So it finally got back to its original value after almost 13 years. If you have bought and held the imaginary UPRO, however, you would have lost 83% of your investment after the nearly 13 years!
(2) This is the far-worse part. S&P 500: 1565 on Oct. 9, 2007, and 677 on Mar. 9, 2009. This is the recent financial crisis. S&P lost 57% of value in only 17 months. However, UPRO would have lost 96% of its value. You basically got wiped out during the 17 months period.
So, regardless of how the world evolves over the long term you would still be much better off actively managing your UPRO position than just buying and holding it. You certainly should get out when market looks frothy; so you can get back in when it is attractively-valued and fear is running rampant.
With Chinese economy likely to strengthen in the next year or so and an attractive valuation, SOHU indeed looks like a winner for the next year or two. However, its mobile strategy seems to be lacking. That's an area that bears watching in the longer term. That said, Charlie's observation on online video appears quite convincing.
XPO Logistics: Let The Insane Growth Begin [View article]
One thing I missed out, but should be obvious from earnings conference call, is that its Expedite business will be getting a boost from hurricane Sandy. Also the change in supply-demand dynamics brought about by Sandy can potentially improve and strengthen the customer base for freight brokerage. So, a great Q4 and longer-term outlook can be expected for XPO.
Tiny Uni-Pixel Tops Big Money Poll [View article]
Your article was published on April 25 and you predicted a double by the end of April, which is today. Were you serious when you told your readers it might double in just 4 trading sessions?
Unfortunately I couldn't find a way to short this kind of prediction -- mother of all hypes! Otherwise it would have been a no-risk, high-return bet. The proof was in the stock performance of past four sessions.
China Xiniya Fashion Limited: Can We Look Into This Made In China Stock Without Prejudice? [View article]
(4) Savvy managers are pushing overseas, driven by (a) opportunity to expend to foreign markets, (b) capital stress experienced by foreign operations in today's sluggish global environment, and (c) Chinese consumers' special enthusiasm/appetite in foreign brands.
There's an analyst specifically asking about Mr. Xu's ambition overseas on recent CC, which I believe has to do with the recent trend mentioned in (4) above.
A little digress here. I was once studying XNY when it was trading in the $4-5 range. I found myself unable to verify an industry award company mentioned in one of its filings. But I found ZA got that same mentioned award instead. It was only a casual study; so I do not know if my methodology was 100% reliable. It was just enough for me to skip this name myself.
China Xiniya Fashion Limited: Can We Look Into This Made In China Stock Without Prejudice? [View article]
My $185MM cash number included RMB 50MM in time deposit. To me, spending $10MM in repurchases would be able to reduce 40% of float. Or, like the analysts on the CC suggested, a $0.25/ADS dividend would only take $14 or $15 MM. That, compared to the total amount of cash, is not going to put a great dent on company's war chest. So, that shouldn't impact any M&A much.
There're also massive risks involved for a co. without track record to suddenly embark on outsized M&A's.
China Xiniya Fashion's CEO Discusses Q4 2012 Results - Earnings Call Transcript [View article]
Now, it only needs $25MM to repurchase all the float. So the company can repurchase all the float and still be left with $160MM of cash, more than ample for pursuing M&A and other initiatives. Yet, on Q4 conference call, Mr. Qu stated there's no intention to repurchase more shares, nor issuing any dividend. All because Mr. Xu thought he needs the cash for M&A and wanted shareholders to think long term.
How do you explain that?
China Xiniya Fashion Limited: Can We Look Into This Made In China Stock Without Prejudice? [View article]
Now, it only needs $25MM to repurchase all the float. See the company can repurchase all the float and still be left with $160MM of cash, more than ample for pursuing M&A and other initiatives. Yet, on Q4 conference call, Mr. Qu stated there's no intention to repurchase more shares, nor issuing a dividend. All because Mr. Xu thought he needs the cash for M&A and wanted shareholders to think long term.
So go figure. Doesn't this raise the question of whether the co. really has that much cash on its balance sheet? Just asking, other ways of interpretation should be possible too.
I wouldn't be investing in any Chinese company that sounds too good to be true. Even Deloitte wasn't able to figure out if LFT really had the cash it claimed to have.
How To Become A Millionaire Without Really Trying [View article]
I agree with your analysis, and in particular on "It doesn't take a crystal ball to know you are in a bear market nor near new market highs." But I would like to rephrase your statement into this: you do have a murky and defective crystal ball at your disposal:
(1) [Overextended market + low volatility] signals a top.
(2) [Depressed market + excessive volatility] signals a bottom.
Not a perfect timing tool since your crystal ball is "murky and defective". But it helps a lot.
There is wisdom in this wall street saying after all: "When VIX is high it's time to buy; when VIX is low it's time to go."
And I also like your idea of "increasing leverage inversely to market risk."
XPO Logistics 4Q12/FY12 Scorecard And Investing Outlook [View article]
After accounting for 25% (management put it at 20-25%) of Kelron's unprofitable businesses, the organic growth for FY12 is basically flat.
Considering what had happened to Expedited, this performance does not seem to be too shabby. And it might also have to do with the soft macro.
But I'm not exactly happy about it. I'm going to do a competitor analysis in the future to give this a fairer assessment.
So, after considering the two factors I added in this Comments area, I do recommend fellow investors to:
(1) keep optimism at bay and be rational,
(2) take a longer-term view.
I have full faith in the immense potential in this company and the entire industry. Mr. Jacobs' vision just makes sense. And things will become a lot clearer in the next couple of years.
How To Become A Millionaire Without Really Trying [View article]
If you time UPRO correctly, you can certainly build a fortune. But I certainly won't buy and forget it. I will buy only after significant pullbacks, corrections, or when I think a bear market has bottomed. I would sell (in steps) into market highs.
I certainly will not buy after a market has gone through a magnificent run. That means I'm selling now and will buy back after the spring or summer slump that's coming our way. I'm getting back then because I'm bullish on the macro outlook in 2H13 and maybe early 2014 as well.
I might miss a portion in a home run; but that's fine with me. I think some missed portions will be lost in subsequent slumps anyway.
XPO Logistics 4Q12/FY12 Scorecard And Investing Outlook [View article]
XPO Logistics 4Q12/FY12 Scorecard And Investing Outlook [View article]
For an aggressive acquirer like XPO, forward revenue, gross profit, etc. contain a big expected contribution from future acquisitions, which almost certainly means draining of cash currently on balance sheet or future dilution of some sort.
The implication is, then, that EV is kind of understated relative to the forward revenue, gross profit used to compute the ratio. (For a given share price, reduced cash, increased debt, and dilutions all cause EV to increase.)
Unfortunately there isn't a fairer metric that can account for this limitation.
So, it does depend on if you are a believer or otherwise of if the acquisitions, combined with scaling-up and efficiency improvement, will create value in the future, at least to some degree. I have no doubt that scale wins out in the end.
Apple Has Little Left To Lose [View article]
Congrats on yet another great piece on AAPL. What's your thoughts on potential new categories like iWatch and iTV? Do you think they will come and when? Will those help with the stock valuation? Thanks.
XPO Logistics: Buy This High Growth Story On The Dip [View article]
As always, JMHO. Thanks for asking and good luck to you, Flytowin.
How To Become A Millionaire Without Really Trying [View article]
(1) S&P 500: 1527 on Mach 24, 2000, and 1531 on Feb. 19, 2013. So it finally got back to its original value after almost 13 years. If you have bought and held the imaginary UPRO, however, you would have lost 83% of your investment after the nearly 13 years!
(2) This is the far-worse part. S&P 500: 1565 on Oct. 9, 2007, and 677 on Mar. 9, 2009. This is the recent financial crisis. S&P lost 57% of value in only 17 months. However, UPRO would have lost 96% of its value. You basically got wiped out during the 17 months period.
So, regardless of how the world evolves over the long term you would still be much better off actively managing your UPRO position than just buying and holding it. You certainly should get out when market looks frothy; so you can get back in when it is attractively-valued and fear is running rampant.
Sohu.com: Buy One Get Three Free? [View article]
XPO Logistics: Let The Insane Growth Begin [View article]