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Tom Guttenberger
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  • EJ 1 comment
    Jun 16, 2011 11:25 PM | about stocks: YONG, EJ, CHBT

    Keeping this short and sweet...

    1.  The level of Chinese RTO mistrust has escalated to a new level of hilarity.
                                a.  CHBT delisted today
                                b.  YONG had a class action suit filed against them today based on a SEEKING ALPHA ARTICLE WRITTEN BY A SHORT!!! GIVE ME A BREAK!!!

    2.  People love talking about the "Chinese Real Estate Bubble".
                                a.  Just because prices are rising quickly doesn't mean they will crash tomorrow.
                                b.  I know, I know, "Real Estate Bubble" is a very popular thing to talk about since it is so near in our memories, but when the Govt is stepping in to curb housing demand, rather than turn a blind eye to sub-prime, off-balance-sheet-financed loans, the situation is not NEARLY the same.
                                c.  These so called "unaffordable" homes will become much more affordable when China lets it's currency appreciate.  Look at our national deficit, the latter is not a question of if, but when.

    What's the trade? Buy EJ..Fearlessly (my God, what a frightening chart!)

    These are American Depository Shares, so they shouldn't be carrying the same  reputability risk as their reverse takeover counterparts.  The company is rock solid reporting $83M in revenues, a 17% YOY increase last quarter, and projected $84M-$86M for the second quarter, a ~20% YOY increase.

    Finally they have $452.5M in cash.  Their market cap at the time of writing is $620.2M.  Again, give me a break. 

    If there is any semblance of trust remaining for ANY China-associated stocks, this is an absolute no-brainer. 

    Stocks: YONG, EJ, CHBT
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  • Tom Guttenberger
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    Author’s reply » Full disclosure, I've been long EJ calls since the time of writing.
    13 Jul 2011, 02:15 PM Reply Like
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