Shares of Chinese plastic recycler Guanwei Recycling (GPRC -25%) crater after posting...

Shares of Chinese plastic recycler Guanwei Recycling (GPRC -25%) crater after posting mid-session earnings that disappointed analysts. The company reported Q1 EPS of $0.10 on sales of $16.2M. Management also says that material weakness reported in 2011 was "unremediated" and that its controls and procedures are still not effective. (Form 10-Q)

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  • MBOSU1899
    , contributor
    Comment (1) | Send Message
    Came across this article regarding GPRC and thought I would share with everyone. Good luck longs!



    "Wednesday, August 8, 2012
    GPRC new spec play into eps next week
    Earlier this year I highlighted GPRC which ran over 100% from my dd idea. I picked up a small position today at .66 avg as the valuation is trading at a deep discount to book and about 1.2x cash. I noticed some nice buyers today near the dead bottom of the chart on 2x avg volume ahead of eps.




    Early next week this issue should get some exposure when they report eps. Some valuation metrics can be obtained from this Seeking Alpha article.



    Based on a PE of around 1 and the fact a major shareholder converted debt to equity at the 1.80 area this year the current valuation is discounted to a point which makes this issue a real bargin imo.



    I found the following facts interesting from a prior Seeking Alpha article:


    I was reading that Global Hunter changed its policy with regards to Chinese stocks, stating it wouldn't cover them unless these companies would agree to be thoroughly checked out by GeoInvesting, China 360 and other firms like that. Many companies wouldn't agree to this, not to mention the extra expenses involved, but GPRC stepped up to the plate and said "no problem." It passed its review with flying colors and Global Hunter covers GPRC.
    This stock could hit $3.00 in the short run. Sentiment seems to be improving, especially for U.S.-listed China stocks that have been hit hard. The coming weeks will be crucial and if trading activity resumes high there can be many opportunities for traders and investors. Guanwei Recycling is one of them.



    Posted by bman at 4:29 PM"
    11 Aug 2012, 10:43 AM Reply Like
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