Seeking Alpha

OWC Securities

 
View as an RSS Feed
View OWC Securities' Comments BY TICKER:
Latest  |  Highest rated
  • Zoom Technologies Stock Is Cheap, With Low To Moderate Fraud Risk [View article]
    $2.50 is the price we’ve determined to be fair given the current low to moderate fraud risk. The $6 level is a realistic potential price if the stock if proven to be 100% legitimate.

    Nothing in our article is fluff. We are long Zoom not to sell out on a bump but because we believe the company has incredibly strong growth and earnings potential. You are absolutely correct that revenues have been rising and margins have been shrinking, but we presented the argument for why investors can expect margins to increase moving forward. The moment Zoom gets its margins back in control the company will be able to show strong earnings, which could be as early as the second quarter 2012 with the new, large orders that Zoom is expected to have fulfilled.
    Jul 27 10:24 AM | Likes Like |Link to Comment
  • Zoom Technologies Stock Is Cheap, With Low To Moderate Fraud Risk [View article]
    While there is no doubt investing in stocks like ZOOM if a gamble, you can do the best to put the odds in your favor. If you can identify a basket of stocks with low to moderate fraud risk that are insanely cheap, then you should be safe to assume that not all of them are fraudulent. Even if 50% of them are, the odds are still in your favor. For example, if is fraudulent, then the stock price will go to $0. But if it is not, the stock could easily be trading in the high single digits. So for your $1 investment, you can either loose $1, or gain lets say $6 (conservatively). Your potential reward is much more than potential risk. So while investing in just 1 of these US-listed Chinese stocks like ZOOM may not be a safe strategy, you can argue that investing in a basket of them with low to moderate fraud risk is. ZOOM is a great example of one that fits well into that basket.
    Jul 23 06:29 PM | Likes Like |Link to Comment
COMMENTS STATS
2 Comments
0 Likes