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China Integrated Energy

China Integrated Energy, Inc. operates as an integrated energy company in China. It engages in the wholesale distribution of various finished oil and heavy oil products including gasoline, diesel, and naphtha to distributors that supply retail service stations, as well as directly to end users through its 12 retail gas stations. It is also involved in the production and sale of bio-diesel to oil product trading companies, as well as end users comprising gas stations, electric power companies, and shipping companies. China Integrated Energy, Inc. was founded in 1999 and is headquartered in Xi'an City, China. (Taken from Yahoo.com and slightly edited)
 
This is one of 21 stocks that passed my screen today
 
Some highlights:
 
Return on Equity – 32.7%
Debt to Capital – 2.58%
P/E trailing 12 months – $9.19/1.13 = 8.13 (Projected P/E for next 12 months – $9.19/1.29 = 7.12)
Price - $9.19 (after hours following earnings report on August 4, 2010)
10-day Average Volume – 132,800

TTM earnings are lower than projected earnings.
Analysts are predicting that growth for the next twelve months will produce higher earnings per  share than the past twelve months. This seems like an obvious goal, but only nine stocks on my screen passed this simple test.
 
CBEH posted earnings yesterday with an increase in earnings per share of 11% over the past quarter and an increase of 20% over the same quarter last year. The price increased 21 cents, or 2.33 per cent. There is nothing in the report which raises my eyebrows, and business appears to be booming. This is the only non-state run company of its type in China, and it has a potential customer base that is practically unlimited.
 
Here is what I find very interesting. Information is available beginning in October, 2007. EPS peaked two weeks later at over 47 and then began a long bumpy decline to 6.5 a year later. Over the next year it slowly climbed. By October of 2009 it was over 13. Over the past year it has stayed consistently above 6.5 and below 13.5.
 
When the earnings per share took a big jump at the beginning of this year the price also climbed, but nowhere near the same rate. Perhaps some of this is due to investors shying away from anything Chinese, but the P/E is presently just over 8. Yesterday’s after hours close was $9.19. Earnings for the past twelve months were $1.13 per share.
 
If the price rose to the point where the P/E were again at the top of the range for the past two years (13.78 on October 14, 2009) then these shares will be selling at $15.57, or a 69% increase.
 
If the price were to drop to its lowest P/E for the same time frame (6.53 on January 27, 2010) shares would be selling for $7.38, or a 20% loss.
 
At this time CBEH is fighting under the triple shadow of having been the result of a reverse merger, being in China, and being associated with possibly fraudulent companies such as NEP, CGA, and CSKI.
 
Any investment in this company, as in any other, needs to be monitored carefully!
 
Disclaimer: I was unable to locate projected earning past the next two quarters and so repeated the last estimate into the next two quarters to arrive at the projected P/E.


Disclosure: I do not own shares of CBEH