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China MediaExpress Holdings (CCME, $CCME) Crashes and Burns on Short Sellers' "Pump and Dump" Claims

|Includes: China MediaExpress Holdings, Inc. (CCME)
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February 3, 2010
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VALUATION WARNING:  Our models find that overvaluation is approaching levels typically seen when a market correction is imminent. Overvalued stocks now make up almost 65% of our universe and almost 32% of the universe is calculated to be overvalued by 20% or more.  ALL sectors are now calculated to be overvalued.

Short Pick Success

China MediaExpress Holdings (CCME, $CCME) Crashes and Burns on Short Sellers' "Pump and Dump" Claims

 China MediaExpress Holdings, Inc. (CCME, $CCME), is China's largest television advertising operator that generates revenue by selling advertisements on its network of television displays installed on over 18,000 express buses originating in thirteen of China's most prosperous regions. These regions include the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin and Chongqing and eight economically prosperous provinces, namely Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei and Shandong which generate nearly half of China's GDP.

 China MediaExpress was the Business Services Sector short pick for our ValuEngine Forecast Model MNS Newsletter for January.  After the initial selection and subsequent re-balance, the stock made some gains and looked like a loser for the short side.  But since January 28th, the stock has been on a downward slide and is currently showing a 35% gain for the portfolio.  Several analysts have downgraded the stock amidst allegations that the company has engaged in "pump and dump" activity designed to enrich its management at the expense of investors.  This stock has been extremely volatile and for the moment the shorts are certainly having their way.

 ValuEngine has issued a SELL recommendation for China MediaExpress on Feb. 03, 2011. Based on the information we have gathered and our resulting research, we feel that China MediaExpress has the probability to UNDERPERFORM average market performance for the next year. The company exhibits UNATTRACTIVE volatility.

 Based on available data as of Feb. 03, 2011, we believe that CCME should be trading at $15.76. This makes CCME 5.42% overvalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For CCME, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of $2.54, forecasted EPS for the next four quarters of $2.88, and correlations to the 30- year Treasury bond yield of 4.64%.

  Remember that our models re-calculate all forecast and valuations at the of every trading day so the price declines for CCME are not included in the current model data.

  Subscribers can check out the latest figures on China MediaExpress from our models HERE. 

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Market Indices Data
  Latest Change YTD
Dow Jones
12,040.80 -1.21 4.00%
NASDAQ Composite
2,749.62 0.06 3.65%
Russell 2000
796.51 0.35 1.64%
S&P 500
1,303.75 -0.28 3.67%

 

ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
35.17%
Stocks Overvalued
64.83%
Stocks Undervalued by 20%
15.31%
Stocks Overvalued by 20%
31.91%

 

ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Oils-Energy 0.45% 0.52% 6.01% 35.66% overvalued 42.42% 46.60
Basic Materials -0.15% -0.11% -1.38% 21.12% overvalued 54.24% 38.70
Multi-Sector Conglomerates 0.40% 0.45% 4.66% 15.98% overvalued 39.40% 36.23
Industrial Products 0.32% 0.39% 3.30% 15.96% overvalued 34.23% 33.15
Business Services -0.00% 0.07% 2.18% 15.64% overvalued 22.26% 33.51
Computer and Technology 0.49% 0.67% 4.66% 14.63% overvalued 40.65% 38.31
Auto-Tires-Trucks -2.71% -2.59% -2.25% 14.41% overvalued 35.98% 19.60
Transportation -0.86% -0.79% -1.66% 13.61% overvalued 30.34% 28.06
Aerospace 0.59% 0.32% 4.82% 13.00% overvalued 38.41% 19.34
Finance -0.38% -0.32% 1.33% 9.42% overvalued 19.18% 28.16
Utilities -0.26% -0.25% 0.68% 9.10% overvalued 18.38% 20.70
Retail-Wholesale -0.84% -0.79% -2.32% 8.94% overvalued 30.19% 27.38
Consumer Staples 0.11% 0.17% -0.90% 7.51% overvalued 20.01% 24.60
Consumer Discretionary -0.03% 0.03% 0.67% 7.19% overvalued 25.44% 30.77
Construction -0.24% -0.15% 4.40% 4.58% overvalued 16.52% 29.98
Medical -0.34% -0.29% 2.41% 0.17% overvalued 19.99% 35.99

 

 
 
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