Cabeza Howe

http://valueblockbusters.blogspot.com/

10 Comments

    • CYXI: A Growth Stock Trading Below Book Value [view article]
      Robert,

      I certainly have noticed the significant inventory buildup in the two most recent quarters. It certainly does not feel pleasant. But note that 69% of the inventory was on raw material build up (as of 3/31/08). When you look at the recent crop price super-inflation, it is not hard to understand why companies are stocking up on these raw materials. Otherwise, they might be facing declining gross margin going forward if crop prices keep on rising. Current inventory takes roughly half a year to move through, which might still be manageable. Also if you just look at the finished goods, Q1 (53 days turnover) had a slight improvement compared to Q4 (59 days). So the products still appear to sell fine.

      That said, the inventory deserves close watch in the following quarters. On the other hand, the current price level might have built in some discount for certain risks.       Jun 27 10:27 PM
    • CYXI: A Growth Stock Trading Below Book Value [view article]
      Rick,

      Thanks for the comments. The PIPE investors themselves are all underwater now, since their bets were at $1 a share. Their warrant exercise prices are $1.5 and $2. So the overhang is not a threat at this price level. Furthermore, those investors cannot sell their shares until the share registration (last filed in April) is declared effective by SEC.

      Regarding the CFO appointment, that indeed should have addressed one of CYXI's weak spots. If the CFO is good and can communicate the company's vision and business strategy effectively to U.S. investors, we small fries will soon be rewarded.

      Happy investing and best regards.

      Cabeza       Jun 24 09:50 PM
    • CYXI: A Growth Stock Trading Below Book Value [view article]
      The difference between CYXI and CXTI is day and night, or haven vs. hell.

      CXTI has got virtually zero media coverage in China, leaving no paper trail to indicate its legitimacy.

      In the case of China Yingxia, Mrs. Jiao herself has won numerous provincial and national awards and recognitions. Perhaps the top recognition she has ever won was the 2004 Top Ten Business Talents, which put her name side by side with the likes of Mr. Liu Chuanzhi (former Lenovo Chairman/CEO) and Mr. Zhang Enzhao (former China Construction Bank Chairman).

      Mrs. Jiao is well followed by the media. She is one of the role models of the Chinese woman entrepreneurs. You will also be able to follow previous media reports to reconstruct CYXI's growth history.

      On the CYXI-Sanitarium agreement, it was signed on the well-known Harbin Fair a week or so ago. The event/agreement was reported by many official organizations, like provincial and national Green Food organizations and agricultural departments.

      The link I gave above, Life Daily, is an official publication of Heilongjiang Province's Heilongjiang Daily Group Limited.

      CYXI is simply one of the few Chinese OTC companies that you can invest with piece of mind knowing there is no likelihood of a fraud.       Jun 24 09:37 PM
    • The Long Case for Giant Interactive [view article]
      I forgot to mention: GA already sat on the top spot in terms of net income in Q3. Here is the top three in net income (RMB):

      GA 290.2M
      NTES 260.2M
      SNDA 238.9M
       Dec 03 10:58 PM
    • Investors Vote 'No Confidence' in TCM's Management [view article]
      I agree with you on the dentist analogy. Good point. To gamble on Chinese IPOs I would certainly go to others, not TCM. If SCR managed to convert most of its IPO proceeds into RMB why is it TCM couldn't? TCM came to the market a little earlier actually. Management's explanation about foreign currency regulation then must be an excuse. Maybe we should follow up on this. Thanks for the info. Nov 11 11:49 PM
    • Investors Vote 'No Confidence' in TCM's Management [view article]
      Capital venture for the right reason can be called "fundamental business sense," that for the wrong reason is called gambling. Nov 11 11:39 PM
    • Investors Vote 'No Confidence' in TCM's Management [view article]
      Nobody really has set a standard on the issuing P/E. But your range was about right due to common practice. The recent bubble has pushed the average P/E to the 30 mark (among small and medium sized IPOs). There were reports of average of 28.98 for new issues June thru October. First day activity often tripled the price pushing P/E to 90 or 100. When the bubble still holds, there is certainly hot money to be made. However, have you heard about the "overpackaging&qu... practices where small companies with lousy financials get packaged to the rosy profit and P/E at IPO? And things are sure to unwind when the bubble bursts. Nov 11 11:34 PM
    • Far East Energy: Seeing the Light [view article]
      Regarding the option grant mentioned, it was <strong>40,000&l... (not 4,000) shares per board member. So correct statement should be:

      "Then the five non-employee board members were granted 360,000 shares (40,000 shares each member, plus 160,000 extra shares for new director C.P. Chiang) of option at $0.765/share on January 25th."

      This and certain other updates can be found <strong>here<...       Feb 09 12:10 AM
    • Far East Energy: Seeing the Light [view article]
      Sorry to hear about that. That was quite unfortunate. I agree with you on "a company that refuses to answer letters from their own shareholders is not worth owning." However, I'm also careful to draw a distinction between a particular arrogant employee and a company. Within FEEC, there is certain person who ignores inquiries even as of now. The company should not have put such a person on IR role in the first place. Obviously this person does not understand that responding to investors (large or small) is his job. So he obviously does not qualify for the job. At this point allow me not to release his name. But he ought to remember what gets him paid, and understand that in Internet age bad news really travel on wings!

      However, I have had good experience with other employees. Catherine Gay addressed investor inquiries quite well. She answered my emails and passed on my questions to the management. CFO Bruce Huff answered my questions over the phone. A few weeks back, I emailed Bruce in which I suggested webcasting the upcoming operations update. He replied to my email, though without consenting on the webcast. And then in about a week they announced webcasting it on 2/14. I do not know if their decision had anything to do with my suggestion at all. But that is not my point. What really matters to me is that they do not just ignore you.

      In selecting FEEC, we are investing in China's energy future. So I put more emphasis on FEEC's vast recoverable CBM interest than anything else. Of course, the PSCs are not worth much without a decent management team. But I'm focusing on the positives and progresses, not on the past.

      Happy investing.       Feb 08 11:59 PM
    • China Medical Technologies Is On a Path For Success [view article]
      Thanks for your comment. Underexposure, tax selling, short term correction, and so on are opportunities to accumulate value stocks. Tax selling is inevitable for any underperforming stock. For CMED, the recent weakness has been a combination of profit taking, panic selling on downgrade and bond issuance, and tax selling. But if you have the right time horizon, buying on weakness is the way to make money. Dec 18 11:52 AM
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