collins

Buy These Three Stocks During the Dip in Highly Valued China

Danny,

Thanks for the further details on your investing focus. I clicked on "following" next to your name. I'm not sure what that means. What I wanted to have happen by doing that is to be notified via email when one of your pieces makes it to the internet. But perhaps that's not what clicking that button does. I never even knew it was an option till this morning.

Also, I'd be very interested to hear what companies you've singled out in Brazil and was wondering if you could pass their ticker symbols along so I can more quickly find your blogs on them. I suspect there's only a couple at this point. But I'm sure you're busy so I understand if you want to let this request slip by.

Thanks again. Looks like you picked an excellent time to start investing.

Collins

Buy These Three Stocks During the Dip in Highly Valued China

Danny,

Thank you very much for your prompt reply. I started a 2.5% position yesterday--shoot first ask later! I came to the same conclusion you did about SKBI's Nevada-Cayman Island corporate history: it's done a lot. Likewise, a friend noted that the institutional investors in this company most likely did a fair amount of DD and evidently didn't find this issue inherently problematic.

Thanks for clarifying my concern about the website. The picture indeed looked like the very type of drawing companies use to portray a project they envision for the future. Perhaps they mentioned this on the website as I did not examine it closely.

The more I think about SKBI and the niche it's working in, the more I like it. Thanks a lot for calling this one to our attention. I will have to look more closely at your other suggestion CBEH.

Also, do you post your ideas elsewhere on a frequent basis? If so, I'd appreciate hearing where. Your three ideas here so closely match up with my own inclinations that I'd like to hear what you're discovering on a regular basis.

Again, thanks a lot for taking the time to respond to my inquiries.

Collins


On Aug 22 01:27 AM Danny Furman wrote:

> Collins,
> Thanks for the thoughtful response and questions.
> I don't know much about taking a company public, but the process
> for SKBI looks far from unusual. Many Chinese companies were initially
> taken public by small (sometimes unscrupulous) firms with promises
> of a NASDAQ listing (etc), only to be listed on the OTC market with
> minimal exposure to raise capital. The drawing on SKBI's website
> is a planned facility (www.skystarbio-pharmac...),
> not a random cartoon :). SKBI has grown rapidly since 2007 and doesn't
> have much operating history, so continuing to grow profitably may
> be a challenge. Still, the company is cheap by almost every valuation
> metric and has a diverse pipeline of existing and developing products.

Buy These Three Stocks During the Dip in Highly Valued China

Danny,

Thanks a lot for your article. I already own a hefty amount of NEP, but hadn't heard of CBEH and SKBI. This latter one seems great, but I'm concerned about their legitimacy and was wondering if you could vouch for them in some way. I feel uneasy when I read in their 10Q report 8/14/09 that they were:

"formerly known as The Cyber Group Network Corporation, (which) was incorporated in Nevada on September 24, 1998."

Along with this further string of ownership claims:

"All of the Company's operations are carried out by Xian Tianxing, a PRC company, which the Company controls through contractual arrangements originally between Xian Tianxing and Skystar Bio-Pharmaceutical (Cayman) Holdings Co., Ltd. ("Skystar Cayman"), a Cayman Islands company that became the Company's wholly-owned subsidiary subsequent to a share exchange transaction on November 7, 2005. On March 10, 2008, all of the rights and obligations of Skystar Cayman under the contractual arrangements were transferred to Sida Biotechnology (Xian) Co., Ltd. ("Sida"), a PRC company and wholly-owned subsidiary of Fortunate Time International Limited, a Hong Kong company and wholly-owned subsidiary of Skystar Cayman. Xian Tianxing also has a wholly-owned subsidiary, Shanghai Siqiang Biotechnological Co., Ltd., a PRC company."

This might be a "common" practice, but I'd really appreciate it if you could elaborate on what assuaged any doubts you might have had along these lines.

Moreover, I also found their website rather suspect since their homepage uses a "drawing" of their facilities and not a real picture. Why pay someone to do a drawing for you with fake people walking around your "facilities" when you could just take a picture of it with real people walking around? Likewise, when you go to their page outlining their "operations" there's strange close up picture of a huge industrial drill-bit like device that would seem to have absolutely nothing to do with a plant that manufactures vaccines for animals. Presumably you've seen what I'm talking about. But here's the link:

www.skystarbio-pharmac.../

I bring these points up because I am genuinely interested in this company. I'm not at all bashing it. I'm just stating some initial concerns and assume you can clear them up as I wouldn't think you'd want to put your name behind this companies without having done a fair amount of research on them.

Again, I think very highly of NEP, and this in turn made me feel your other do picks deserve serious consideration. I hope you will have time to respond.

Thanks for the article.

Collins

The Risk Is Back in GeoEye

Hi Chris,

Yes, excellent post and very timely. Likewise, thanks for immediately addressing Rich Smith's unbalanced article. It's too bad your articles don't automatically come up on the Yahoo financial page when you type in Geoeye as do so many other articles about Geoeye, such as Rich Smith's. It's a shame, in other words, that yours are essentially buried unless someone already knows to click on the "Financial Blog" option on the left of the screen when looking at a summary of Geoeye stock prices.

On another note, given the information Smith did include, his statistics would appear to make DGI the hands down better company with tons more revenue and better margins. I know you called him on that, but it was essentially buried in a footnote rather than in article. Nor am I suggesting writing an article that confronts Smith head on. Rather, I think his article is helpful in the sense of emphasizing what part of the Geoeye story needs to get told. You noted, for instance, that Geoeye's overall operation is much bigger than DGI's. That is not at all apparent to most onlookers; on DG's website they say they employee 350+ people, but I couldn't find a comparable statement on Geoeye's webpage. Likewise, they tout themselves as the leader in the field with the most sophisticate satellite up there for commercial work. And all this seems to tally with the very disproportionate revenue comparisons Smith highlighted.

Finally, I thought you made an excellent point in a previous article where you compared Geoeye's market cap to what DGI's would be if you used $17 as a share price. Obviously, with the share price coming in at $21.50 that should make Geoeye all the more undervalued. Presumably you would be high lighting this point in your next article anyway, but since I thought your previous effort to quantify the difference was instructive, I thought I'd mention it.

Thanks again for your well rounded coverage of the earnings call and for quantifying the probably outcome about the camera issue.

Collins

GeoEye: Price Jumps as Company Hits Its Stride

Hi Chris,

Another excellent update and summary of Geoeye. Thanks. However, I was surprised by two conclusions you drew in the course of your summation. In particular, you said:

"However, I want to reiterate that as far as the bottom line, Google does not contribute, nor will they contribute, significantly to GeoEye’s revenues throughout their agreement as it stands now."

Could you clarify your rationale here? I talked to a friend who had directly talked to Geoeye, and he was told the details of the Geoeye/Google contract will never be made public. Likewise, neither of us could find anything but vague statements about their agreement, which of course concurred with what my friend was told. Yet in the recent conference call, O'Connell said that in North America Google is their highest profile and largest commercial customer. So I don't understand how you conclude that Geoeye's largest North American customer is not going to add to Geoeye's bottom line? Are you suggesting that they are trading their imagery for the high visibility that Google Maps will generate for them?

Similarly, I was surprised that you down graded Geoeye from a strong buy to that of a buy. I followed your rationale easy enough, but now that Geoeye is fully operational, has gotten the NGA certification, is the best commercial satellite in the sky, and now has received a letter of intent from the NGA to extend their service agreement through mid 2010, they seem to be in the best position ever to receive new contracts and pick up a few new analysts covering them. These last two points in particular have been part of your own thesis of how things will play out. So withdrawing the strong buy status when they haven't yet signed new contracts and haven't picked up any new analysts struck me as odd. It seems like a shift from long term focus to short term, which I agree has its merits. But, apart from that, it seems you've either changed your mind about the value of Geoeye picking up new contracts and analysts, or are now thinking they might be far in the future and few. It also seems you've written off Q1 as a catalyst, although I would expect it to reflect a little positive progress. I would think as well that if they hire a notable CFO that that, too, might further enhance Geoeye's appeal to institutional investors.

I appreciate your desire to have the ratings "strong buy" and "buy" actually mean something. But I'd appreciate it if you could clarify some of these other points.

Thanks again,

Collins

GeoEye: 10 Thoughts on What's Going On

Hi Chris,

Yeah, talk about good news! I hesitated to make my last post since, as you said, it doesn't matter any more. But I went ahead as I thought it might prove to be useful feedback nonetheless.

It would be great if they have the NGA certification by earnings. I've heard that they have a number of very interested parties that want to do business with them, but not until the certification comes through. Hopefully that will be the case, and we'll find out about it sooner rather than later.

As things unfold, I look forward to reading your assessment of how things are adding up. Thanks again for all your work on Geoeye; with long stretches of no news, I very much appreciated your periodic updates.

Best,

Collins


On Feb 05 04:09 PM Chris Fernandez wrote:

> Hey Collins,
>
> It looks like none of that matters anymore as today the company finally
> released GeoEye-1 images for commercial purchase, and submitted them
> to the NGA for final approval for the Service Level Agreement.<br/>
>
> Looks like we are golden now.
>
> Chris

GeoEye: 10 Thoughts on What's Going On

I called Geoeye on Monday and heard back today that the whole issue about hiring an expensive programmer to fix a special strata of the software that supposedly was out of sinc with the NGA's requirements was a false rumor. Today's announcement certainly seems to confirm this. At any event the person I spoke with had heard nothing about it, called around to find out more, and told me that it was not true. That's good news in my book. Hopefully we'll start seeing some other contracts cropping up soon.

Collins


On Jan 31 07:23 PM Collins wrote:

> Hi Chris,
>
> Thanks again for gathering and publishing new information on Geoeye.
> I was wondering if you could clarify a coulple points? You said:
>
>
> "As we speak, a high priced programmer is rewriting the code from
> scratch for the satellite ..."
>
> Do you know how long ago they discovered this problem, and when this
> specialized programmer got started on rewriting that aspect of the
> software that needs to be reconfigured?
>
> Secondly, given the great pictures they've posted on their website
> and the ground accuracy they are, apparently, steadily improving
> on, it seems like the software necessary to control, guide and operate
> the satellite are not in question, right?. In other words, is it
> your assumption, or do you know for fact, that the only aspect of
> the satellite's software that needs to be redone "from scratch" is
> that which encodes the date the satellite is collecting and transmitting?
>
>
> I look forward to hearing from you if you have the time.
>
> Thanks much,
>
> Collins

GeoEye: 10 Thoughts on What's Going On

Hi Chris,

Thanks again for gathering and publishing new information on Geoeye. I was wondering if you could clarify a coulple points? You said:

"As we speak, a high priced programmer is rewriting the code from scratch for the satellite ..."

Do you know how long ago they discovered this problem, and when this specialized programmer got started on rewriting that aspect of the software that needs to be reconfigured?

Secondly, given the great pictures they've posted on their website and the ground accuracy they are, apparently, steadily improving on, it seems like the software necessary to control, guide and operate the satellite are not in question, right?. In other words, is it your assumption, or do you know for fact, that the only aspect of the satellite's software that needs to be redone "from scratch" is that which encodes the date the satellite is collecting and transmitting?

I look forward to hearing from you if you have the time.

Thanks much,

Collins

Rick's to Open Nude Bar, GeoEye Helps Catch Pirates Off Kenya

Chris,

Thanks a lot for your extended thoughts on Geoeye's images. Interestingly, I just heard from a friend this morning who called Mark Brender at Geoeye. Apparently they've got the images from geoeye-1 more or less at the same level of synchronization as they have their other satellite, Ikonos. Accordingly, they intend to be sending off sample pictures to NGA for approval "very soon." Of course, once with the Government, who knows how backlogged they may be. But, clearly, if "very soon" is within a week, which is what my friend came away with, it seems reasonable to assume that your "worse case scenario" will not play itself out. Good news no doubt for all of us Geoeye investors.

Again, Chris, thanks for your speedy response and all your careful research.

Collins

On Jan 16 01:49 AM PeakStocks.com wrote:

> Hey Collins,
>
> Sure, no problem, and thanks for asking.
>
> My rationale is based on several things: talk that I have been hearing
> from analysts, the street, message boards, intuition, and GeoEye's
> own press releases.
>
> Put them all together, and I get a distinct sense that GeoEye hasn't
> even fixed their problems yet of the imagery, let alone asked for
> it to be certified.
>
> Therefore, since they haven't even addressed the software problems
> full force yet, once they do, they will still need to get approval
> for the imagery.
>
> All that being said, I see a substantial delay taking place, above
> and beyond the present delay, which would put us already into the
> middle of Q1.
>
> I like to take a worst-case scenario approach, thus I would be happy
> if the imagery were certified by the end of Q1, rather than not at
> all.
>
> All this is based on speculation, and not fact, so please do your
> own digging around to verify the facts to your liking, but as far
> as I can tell, this thing might take awhile.
>
> Chris

Rick's to Open Nude Bar, GeoEye Helps Catch Pirates Off Kenya

Hi Chris,

I've been reading your articles on Geoeye and appreciate all the research and assessments you've brought forth. Thank you. I did notice, however, in your recent Geoeye update of 1/14/09 that you made a curious comment about when Geoeye might receive the requisite Government approval of its geoeye-1 images. You said:

"At this point, it is looking like approval might get pushed out further and further, and we might not even get usable imagery until the back half of Q1, or late Q1."

I would greatly appreciate it if you would articulate what your rationale for suggesting such a timeline is. I did note that you followed up the above statement with:

"That’s a worst case scenario..."

Yet you then concluded the sentence by saying that such a scenario is:

"... a very realistic one."

Hence, this suggests that you have run through some pragmatic considerations to arrive at the timeline you proposed. For otherwise why put it out so far unless you had some rather clear cut notions of what has be done in order to achieve this end? In short, I wonder if you have derived your guesstimate from things you've pieced together in light of conversations and interviews you've had with Geoeye staff or with other agencies familiar with such processes? At any event, since you feel the timeline you've proposed is a realistic one, I would very much appreciate hearing what causes you to believe that is so.

Sincerely,

Collins