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Monday, December 13, 2010

TCCO Blow out Earnings as super-trades.com predicted

Press Release Source: Technical Communications Corporation On Monday December 13, 2010, 8:30 am
CONCORD, Mass., Dec. 13, 2010 (GLOBE NEWSWIRE) -- Technical Communications Corporation (Nasdaq:TCCO - News) today announced its results for the fiscal quarter and year ended September 25, 2010. For the year ended September 25, 2010, the Company reported net income of $7,868,000, or $4.68 per share, on revenue of $21,551,000, as compared to net income of $943,000, or $0.65 per share, on revenue of $7,752,000 for the year ended September 26, 2009. For the quarter ended September 25, 2010, the Company reported net income of $3,176,000, or $1.74 per share, on revenue of $6,861,000, as compared to net income of $235,000, or $0.16 per share, on revenue of $1,765,000 for the quarter ended September 26, 2009.

The Company also announced that on December 9, 2010, its Board of Directors declared a dividend of $0.10 per share of common stock outstanding in recognition of the positive financial performance of fiscal 2010. The dividend is payable in cash on December 27, 2010 to all shareholders of record on December 20, 2010.

Commenting on corporate performance, Carl H. Guild, Jr., President and Chief Executive Officer of TCC, said, "TCC had a record year in fiscal 2010, far surpassing any year in its 49 year history. The primary driver for our growth has been the need for encryption equipment to provide secure national communications in Afghanistan. TCC made substantial shipments on contracts supporting this endeavor through the fourth quarter of fiscal 2010. The fiscal 2010 contracts have been followed with additional orders in the first quarter of our 2011 fiscal year. It should be noted, however, that while the continued business in Afghanistan is encouraging, our revenue in fiscal 2011 is expected to return to the more modest levels achieved prior to 2010. Our backlog at September 25, 2010 remained strong at $3.4 million and increased to $6.8 million during the first quarter of fiscal 2011. The Company expects to deliver these orders during the remainder of our fiscal 2011 year.

Mr. Guild continued, "For fiscal 2011, TCC expects to maintain its increased investment in internal product development. We are evaluating several technical options for enhancing the DSP 9000 Radio Encryption product line, which may include cryptography modifications, hardware and software changes and partnering with radio manufacturers to incorporate imbedded solutions. The Company also continues to evolve the features of the DSP 9000 RF Encryption System and hopes to expand the market to new customers that can benefit from a universal security solution that can be applied to and interoperate with their existing radio communications suite of equipment."

In October 2010, TCC announced the introduction of the DSD 72B, a new family of high speed SONET/SDH encryptors capable of operating on electrical and fiber optic networks. These encryptors are designed to meet a wide range of stringent environmental and operational environments while providing the highest grade of encryption security. In conjunction with the DSD 72B, TCC has developed the Keynet Optical Manager (KOM)(TM), an advanced key generation and management system capable of single--point, over-the-network management of an entire encryption network. TCC expects that customer evaluations of the DSD 72B will begin in 2011.

Driven by current customer demand, TCC has also completed the development of a variant of its DSD72A-SP Bulk Encryptor, which will provide additional radio/switch interface compatibility. Finally, the Company also expects to expand its CX7000 family of IP and frame sensitive encryptors in 2011 and 2012 to provide additional features and higher speed solutions for enterprise networks and satellite communications systems requiring tailored operational and network characteristics.

Friday, December 10, 2010

Will TCCO make a monster run like TASR?

In this article, after they received the $9.7m Order for Afghanistan Radios, officials said 2010 sales would be $20m. Read Article

For the 9 months ended June 2010, they had recorded $14.6m of sales and $2.72 of EPS. That means the 4th quarter could be $5-$6m of sales. Q3 ending June 2010 has $6.3m of sales and $1.29 of EPS. Q4 could be approximately $5-6m of sales and $0.80-$1.30 for the fourth quarter. That would leave them with EPS of $3.52-$4.02 for the year and a P/E of 3-4 even with the Friday close in the $14’s. Imagine $3.50-$4 EPS with any kind of decent P/E? From what I read in the last 10-Q they still have over $3m of tax loss carryforwards. The comparable they are up against from last years Q4 is $0.16 EPS. So If my numbers are close to being correct, we could see a headline such as $0.80-$1.30 EPS vs $0.16 in the prior year quarter.

They have said that business was exceptional this year because of the April order of $9.7m for Afghanistan. However they have since received two orders totaling $5.2m for 2011 in Afghanistan and are rolling out new products.

Per the Company, “Backlog at June 26, 2010 amounted to $10,060,000. The orders in backlog are expected to ship during the 2010 and 2011 fiscal years depending on customer requirements and product availability.” Since then they have received the additional $5.2m in orders.

Read 10-Q

With only 1.8m shares o/s and a float of 1.4m, with this EPS and the strength of this sector, it is easy to see why this could become a monster momentum stock. This is a US company founded in 1961 with a P/E of 3-4 and a clean Balance Sheet.

Here is a great article I found on the Company. Read Article

They report Monday morning. Management is always cautious with guidance. They say Earnings could return to a normal level without Afghanistan. However Afghanistan orders are continuing and they are rolling out new products. AAPL also sandbags guidance every quarter. If my number estimates are remotely correct this could be the beginning of a monster run and a new momentum stock and I will add. If I am wrong (and I could be missing something? Taxes?), my average is in the $12’s - so there you have it.

Monday, December 6, 2010

In TCCO WikiLeaks Play - Undiscovered Low Float w/ Monster EPS ($3-$4 this year) & Strong Theme - Secure Government Communications

TCCO - USA Company with 3-4 P/E
Float 1.4m O/S 1.8m See Share Statistics
http://www.tccsecure.com

With the WikiLeaks scandle TCCO may be a great play as it specializes in secure government communications. (As well as secure mobile and texting to be rolled out to other phone platforms)

Secure Communications has been a very strong theme and APKT has been a monster stock with a 50 P/E for next year's EPS estimates.

EPS for the first 9 months of 2010 $2.72 See SEC Filing

Dividends paid for the first 9 months of 2010 $2.21 per share

EPS for Q3 $1.29 See SEC Filing

Last Press Release

Strong Balance Sheet See Balance Sheet

TCCO is thinly traded so not for chasing or large positions. Not a fast or day trade for me. I think it can at least double in the next 1-12 months from the $12 level it is at now. Please keep in mind that they are due to report year end results early next week, I believe Monday or Tuesday. Holding any stock into earnings can be high risk high reward.

TCCO has conservatively said that this years results were much higher due to $9.7m in orders they received for Afghanistan in April 2010 for this year and early next year, however they have already received $5.7m additional orders for next year and are about to roll out several new products.

Orders for Afghanistan are continuing into 2011:
Read Press Release
Read Press Release

Mobile Prduct Line - The products comprising the CT8000 secure wireless product line will likely continue to evolve and respond to new customer requirements. It is also expected that CiperTalk Secure Voice encryption and CipherSMS Secure Text Messaging will be applied to additional mobile platforms and that customer-specific features will be developed.

TCC designs, manufactures, and supports superior grade secure communications systems that protect highly sensitive information transmitted over a wide range of data, voice and fax networks. TCC's security solutions protect information privacy on every continent in over 115 countries. Government agencies, militaries, financial institutions, telecommunications carriers and multinational corporations worldwide rely on TCC to protect their communications networks.

Technical Communications Corporation designs, develops, manufactures, distributes, markets, and sells communication security devices and systems worldwide. Its products are used to protect confidentiality in communications between radios, telephones, facsimile machines, and data processing equipment over wires, fiber optic cables, radio waves and microwaves, and satellite links. The company’s products include High Speed Data Encryptor, which provides cryptographic security for data networks; Narrowband Radio Security family of products that provide security for voice and data communications sent over HF, VHF, and UHF channels; and Secure Telephone, Fax, and Data system that provides voice, fax, and data encryption in a telephone package. It also offers Secure Portable Telephone Attachment, which provides digital security between telephone and handset; Fax Security System, an automatic transmission fax system that connects to facsimile machine; Executive Secure Telephone, which offers voice and data security in a telephone package; and CipherTalk8000 and CipherSMS secure wireless products to provide encrypted mobile communications. In addition, the company provides CipherONE family of Network Security Systems, which consist of hardware and software-based encryption products for local area network, wide area network, and Internet applications, as well as a network security management system. Further, it provides Frame Relay Network Encryptor, an end-to-end frame relay encryption system; IP Network Encryptor for encryption security at the Internet protocol layer; and KEYNET Network Security Management System, a Windows NT-based key and security device management system. The company markets its products to governmental agencies, law enforcement agencies, financial institutions, and multinational companies requiring protection of mission-critical information. Technical Communications Corporation was founded in 1961 and is based in Concord, Massachusetts.

TCCO is thinly traded so not for chasing or large positions. Not a fast or day trade for me. I think it can at least double in the next 1-12 months from the $12 level it is at now. Please keep in mind that they are due to report year end results early next week, I believe Monday or Tuesday. Holding any stock into earnings can be high risk high reward.

Tuesday, November 30, 2010

Are you aware about these potential new themes/trading opportunities???

4 Potential New Themes that will provide many opportunities for traders:

1) BEST CHINESE IPO WEEK in History? Next week there are six Chinese IPO's of MAJOR interest. I will do a blog on all of them this weekend.

Think YouTube --> Youku.com - Operates China's leading internet television/online video portal. Youku.com Info

Think Amazon --> China Dangdang - China's largest online book retailer and e-commerce platform. Dangdang Info

Think Mobile Apps --> Ski-mobi - Mobile application store in China with a leading 50% share and over 479 million users. Ski-mobi Info

BONA - Leading distributor of domestic films in China. BONA Info

Lentuo International - Largest private automobile retailer in Beijing. Lentuo Info

SemiLEDS Co. - Manufactures LED chips and components used in general lighting applications. SemiLEDS Info



2) IBD articles can at times really light a fire under certain stocks/sectors. Tonight there was an article on Chinese Coal. Watch List - CHNR, YZC, LLEN, PUDA, SCOK Read Article



3) New Food Safety Bill was passed today. Watch List - VIFL, SDIX, PURE Read Article



4) Rare Earth theme exists but new stock to trade soon. Read Article Rare earth exploration company Avalon Rare Metals (AVL.TO: Quote) said on Tuesday it had received approval from New York Stock Exchange regulators to apply for a listing on the NYSE Amex exchange.

The Toronto-based company said it must still meet certain conditions before the listing will be official, and it expects the review process to take four to six weeks.


super-trades that are active:

TSRID - entered low $6's hit $12. Looks good for continued move. 1m float 2m o/s. Great action today. Memories of CDTID still exist. Nothing guaranteed but with proper entries and manageable trade this may be a fun reverse split play. Read Original Blog

MITK - Called at $3.35 hit $4.25 in two days. Pullback today. Again I said 1-12 months I can see this doubling from $3.35. Read Original Blog

I usually always take some profit off when up after first pop so I can manage the rest of the shares accordingly in case of dips. Do not trade just because I do, I can be wrong. Low floats not for chasing entries or large positions. Do your own due diligence. This blog is for my stock ideas only. I am great at finding them, trading them is always more challenging. This blog is not investment advice and I may change my mind as market conditions dictate.

Monday, November 29, 2010

TSRID - The next Low Float Reverse Split Monster like CTDID was ?

Before I begin, the usual disclaimers apply. Low float stocks can be volatile and dangerous and are not meant for large positions or chasing in my opinion. Do own diligence and do not follow me or anyone we all can be wrong.

That being said, stocks with reverse splits that were left with a low float 2 million or less at the time of the split have made some big moves in the past year. None of them had EPS to support the moves but they had some pretty wild moves.

SCOK - $5 to $53
CALL - $4 to $39
CDTID - $4 to $44

Today TSRI starts trading after a 1 for 2 reverse split yesterday, leaving them with 2m shares outstanding and and approximately 1m shares in the float float.

Read Press Release on Reverse Split

Bloomberg Stats Pre-Split

TSRI closed at $2.30 on Monday so it should open at $4.30 or so Tuesday.

Cash Per Share based on the last 10-Q is $8.7m / 2m shares or $4.35 per share.

Book Value/Equity per share based on the last 10-Q is $12.6m / 2m shares or $6.30 per share

Read Balance Sheet from Last 10-Q

While TSRI is not guaranteed to make a wild move like SCOK, CALL, and CDTI, it has the potential given the reverse split.

Again, Low float stocks can be volatile and dangerous and are not meant for large positions or chasing in my opinion. Do own diligence and do not follow me or anyone we all can be wrong.

Today, as a NASDAQ company specializing in information technology staff augmentation and IT consulting, TSR, Inc. continues to expand and transform its services to meet and anticipate its clients’ IT needs.

Wednesday, November 24, 2010

New Pick $MITK.OB The Microsoft of Mobile Deposit and Bill Pay Software?

This stock is not a daytrade for me. However, I could see this stock at least doubling from where it is now ($3.35) in the next 1-12 months. I also see it as a buy out candidate.

The Mobile-Payment Gold Rush

MOBILE PAYMENTS IN THE U.S. are expected to grow at a 68% compounded annualized-growth rate over the next five years, fueled by growing smartphone share of the mobile-phone market. Read Article

Mobile Payments to Reach $214 Billion By 2015, Aite Forecasts Read Article

Enter MITK.OB http://www.miteksystems.com/

Float 12.3m Outstanding Shares 18.3m Bloomberg

"Mitek Systems Inc., the leading software provider in the field"

MITK has two very exciting software products in this fast growing field. One is patented and the other is patent pending:

Mobile Deposit - See Website Patented in the fourth quarter, Mobile Deposit gives smartphone users an accurate, secure and easy-to-use way to deposit checks simply by snapping photos of their checks with the cameras on their mobile devices. Mitek's Mobile Deposit patent, entitled "Systems for Mobile Image Capture and Processing of Checks," was issued on August 17, 2010. Among other elements, the patent contains claims that cover capturing an image of a financial document such as a check using a camera in a Smartphone or other mobile device, and transmitting the image to a bank server for processing and deposit into a customer's account.

Mobile Deposit has been widely embraced by leading technology solutions integrators and application services providers for the financial services industry, including Fiserv, NCR, FIS, Jack Henry & Associates, WAUSAU Financial Systems, BankServ, J&B Software, Bluepoint, Cachet Financial and RDM, among others. In addition, the Company has partnered with leading mobile-banking-application providers, including mFoundry, Clairmail, Kony Solutions and Monetise Americas.

More and more banks, credit unions and payment-management organizations, including PayPal, with the Mobile Check Capture feature of its PayPal Mobile app for iPhones, are deploying Mitek's mobile check deposit solution to their customers, which the Company expects will continue throughout the remainder of 2010 and into 2011. The Company anticipates announcing significantly increased adoption and use in the near future by large financial institutions and payment management organizations.

Mobile Photo Bill Pay - See Website Early in the current quarter, Mitek introduced Mobile Photo Bill Pay™, its latest innovative application for the financial services industry, which allows people to pay their bills simply by snapping photos of their paper bills or invoices. With Mitek's new Mobile Photo Bill Pay app, users can submit electronic payments from their smartphones without having to write checks, lick stamps, visit a payment location or even use their personal computers. DeBello said Mitek is now in discussions for the distribution of Mobile Phone Bill Pay with a number of leading banks, integrators of technology solutions and applications services providers for the financial services industry.

Mitek won BAI's first MobileLink award for its new app that allows users to capture and pay bills with a mobile phone the same way they capture and deposit checks.

“We’re seeing an unprecedented level of interest in our products,” company president and chief executive James B. DeBello said at an investor conference call.

For more than 20 years, Mitek Systems (OTC:MITK.OB.ob - News) has provided financial institutions with advanced imaging and analytics software to authenticate and extract data from imaged checks and other financial documents. Mitek's patented technology is currently used by all leading financial organizations in the United States to process more than 10 billion items per year.

Today, Mitek is applying its patented technology and extensive expertise in image correction, optical character recognition and intelligent data extraction to mobile devices. Using Mitek Mobile Apps, smartphone users can now deposit checks, pay bills, save receipts and fax documents while on the road or sitting at a desk -- eliminating trips to the bank, Post Office and file cabinet. Simply take a picture of the document and Mitek does the rest -- correcting image distortion, extracting relevant data, routing images to their desired location, and processing transactions through users' financial institutions.


Financials - MITK is finally is reaping some financial rewards after years of investment Read Article. MITK just had their first profitable quarter of $0.01 EPS but sales were up 100% and gross margins were 87%. I see this company as one just about to become very profitable after years of investment. So it is a future earnings play on a very growing theme. Read Last Earnings Report


Again, I am not in MITK.OB as a fast trade and I think it can at least double from $3.35 in the next 1-12 months.

Tuesday, November 16, 2010

super-trades update $AERL

Took some $AERL off from my original call and entry in the low $7's. Holding small. Still believe stock goes higher in time but market and china stocks have been ugly and dont want another year long drama like I had in CCME. Will re-evealuate daily. Have to pay attention to the macro environment.

Friday, November 12, 2010

super-trades update $TORM $AERL

$TORM earnings report disappointed me.......that is why I rarely hold a stock into earnings, especially after it has made a 100% move


$AERL - still think this will go higher...macau is booming...they are starting to meet with funds..... in with core shares since low $7's.


No other new stocks right now seeing if markets will recover.....watching for earnings reports

Wednesday, November 10, 2010

super-trades update $AERL $TORM

Market was down yesterday. Great opportunity for twitter shorts to get their scalps. Bulls are geniuses in green markets and shorts are geniuses in red markets.

$TORM - not holding much at all into earnings on Thursday.....no need after big run up from call at $6.50. Will evaluate report when out.


$AERL - Stock took a healthy dip after run from $5 to $11. Consolidating and gathering some shorts and yesterdays red market was ideal as most stocks took a dip. In my opinion it will go higher as Macau is very hot and this is a pure play and EPS is projected to be $2.85 in 2011. They are working at MGM and LVS casinos. Presenting at a few conferences soon. Again originally called and entered in the low $7's, added a few trading shares in the high $9's but core average still in $7's. Most of my stocks follow this pattern, initial run up then pullback and shorts bash and act like its dead, then they move higher. ie. $TORM, $CCME, $RITT etc.....

No other positions right now.

Tuesday, November 9, 2010

What do these stocks have in common? $AERL, $CCME, $TORM, $RITT, $HIHO, $ANTP, $LIVE

What do these 7 stocks have in common?

1) They are all www.super-trades.com winning stock picks.
2) Shorts were wrong on 6 of 7 of them as only one of them has even pulled back significantly from the original run up even though many shorts called them junk and said they would.
3) They had the EPS growth to support a move and/or a strong growth theme in the news.

Usual disclaimers - Do not chase my stocks and do your own research. I can be wrong.

AERL - I first called AERL in the low $7's last Thursday, November 4 Read Blog Post. It hit $11.55 today and closed at $10.70. As we learned from TORM recently, stocks can take a short breather but that does not mean that the story is over. Of all the stocks I have recently called, I think the story and the fundamentals here are the best. Macau is growing like gangbusters, casino stocks have been on fire, and AERL is a macau pure play with a forecasted $2.85 EPS in 2011. That is better EPS than even CCME, another huge super-trades winner. The stock is now free to move since last week as the warrant overhang is over. I think this stock is going much higher, and I am in from the low $7's and have alot of cushion to see this play out. But to me it is like owning CCME when it was $10.70, with even stronger EPS.

CCME - What can I say, this is a super-trades winner and the type of play I am known for. While this did take much longer than I originally thought (as I mis-timed the attack on china stocks over the summer), CCME came to fruition to be everything I always thought it could be today. I originally called this stock last year at $7.50 when the symbol was TMI Read Blog Post and it hit $22.30 today on a great Q3 report and guidance raise. Shorts were wrong here (they can be very wrong at times). Think stock can go higher in time, but no need for me to have any kind of large position after the run up we have had and stocks like AERL being available which to me is like owning CCME when it was $10.70. It was rewarding to see CCME, a stock I had such conviction on, come to full fruition.

TORM - I called TORM at $6.50 on Tuesday October 26th Read Blog Post, and it hit $14 today! Again shorts were wrong on this as it was a real undervalued company with EPS and a mineral in high demand. I think the stock will move higher into earnings this Thursday. I took half off in the $11's and we play it day by day as this appears to be very strong.

RITT - I am no longer in this stock, but I called it in the low $2's on October 21st Read Blog Post and it is still in the $7's today, even after a bad earnings report (as I also predicted). Short sellers can be very wrong at times (as can longs). RITT had a press release with an order from a customer in India the other day.

HIHO - Called this stock on Tuesday October 19th at $2.80, Read Blog Post and it hit $4.24 today and closed at $3.73 after a decent earnings report. Good one to take profit on and watch for more news if it pulls back significantly. I no longer have a position here.

ANTP - Called this stock around $4 on October 19th Read Blog Post and it hit $6.37 on October 22nd and has now pulled back to the low $5's. Definitely a stock to keep on my watch list for more product news and the next earnings report.

LIVE - A stock I called in the $4's on October 14th Read Blog Post It exploded to $22.25 on October 21st in a bizarre explosion and I sold that day in the $10-$13 range. Since then it has fallen all the way back to the $6's. I have no position and think it will take EPS, an acquisition, or product news for this to move again.

Watch China mineral stocks as the news has been China is buying up commodities.

Friday, November 5, 2010

super-trades comments AERL, CCME, TORM

$CCME wont hold large position into earnings on monday although i think all positive to go higher...no need after big run....

$AERL EPS/growth - check ($2 eps 2011) hot theme - check (macau) called at low $7's going much higher

$TORM should keep going higher into next thursday earnings....$20 target by hedgie yesterday and trapped shorts

Thursday, November 4, 2010

In AERL, Macau Pure Play

Macau, the Asian version of Las Vegas, has been booming. The results of booming gaming operations in Macau has boosted the earnings of LVS, MGM, and WYNN. The Wall Street Journal just has an article entitled "Macau Gambling Revenue Surges". Read Article

That is why I bought AERL in the low $7's, as it is a pure play on Macau gaming. AERL, formerly known as CS China Acquisition Corp., acquired AGRL on February 2, 2010. The principal business activities of AGRL’s wholly owned subsidiaries are to hold Profit Interest Agreements with its VIP room gaming promoters that provide AGRL with 100% of the profit streams from the operations of the VIP room gaming promoters. AGRL’s VIP room gaming promoters currently participate in the promotion of two major luxury VIP gaming facilities in Macau, China, the largest gaming market in the world. One of the VIP gaming rooms is located at the top-tier MGM Grand Macau Casino in downtown Macau that is operated by the MGM Grand Paradise S.A. The other Macau VIP gaming facility is located in the luxury 5-star hotel, the Star World Hotel & Casino in downtown Macau, which is operated by Galaxy Casino, S.A.

Recent acquisition of another VIP room:
On October 12, the Company announced it had entered into a non-binding Memorandum of Understanding to acquire another VIP gaming promoter, which operates in the Venetian Resort on the Cotai Strip and earns revenues based upon the fixed commission rate of 1.25%. Currently, the Company's VIP gaming rooms are located in Downtown Macau. The Company believes that this acquisition will offer an alternative for its current patrons and be accretive to both gross revenues and net earnings. As a result of this acquisition, the Company believes that approximately 90% of its revenues will be generated under the 1.25% fixed commission, which would further reduce monthly earnings volatility.

The numbers:

In latest earnings release, the Company said 2010 Net Income will be $36-$39 million based on the current rooms. Read Earnings Release

They have approximately 25-27m shares o/s after the recent exercise of approximately 14m warrants. Read Article The float should be 6-19m depending on how many of the warrant holders actually hold the stock for higher prices. For 2010, I estimate EPS will be approximately $1.40-$1.65. According to an article on SeekingAlpha Read Article, in 2011 with the new Venetian VIP room, AERL could do approximately $55m of net income (I am trying to verify that calculation), or over $2 EPS. That would put AERL at a forward P/E of 3-4 in a pure play hot sector. Assuming Macau stays hot and Chinese stocks remain in favor, I could see AERL targeting the $12-$20 range eventually.

Tuesday, November 2, 2010

Why $TORM was different and shorts should've listened

I was in and called $TORM on October 26th at $6.50, it hit $11.40 that same day. (I took some off and kept some because I believed in the story) Read Blog Post Then it took a few days where it languished near and just below $10. Of course the small cap shorters network (SCSN - I made up this acronym - group of Twitter shorters) was ready to call it dead. They said it was a POS, that the chart was breaking and it was just a pump. In this blog post I warned them that TORM was different Read Blog Post Well today shorts were crushed as TORM exploded to new highs.

As I stated, the Company reports earnings Nov 11th, already has $0.43 EPS for the first 6 months of 2010, and titanium dioxide shortages are in the news. I said this is a small cap with a real story and EPS that could catch fire as it had both EPS, growth, and a strong theme. $KRO has almost a 20 P/E in the same industry so if $TORM can get near a $1 EPS run rate this could be an interesting story. However, that is contingent on the next EPS report.

However, I said TORM in sweet spot...new article today shows DOW looking for ways to reduce dependence on white titanium dioxide.......TORM has a unique solution:

DOW article Read Article

TORM info:

Read Article

Read Article


Management said growth the rest of the year to show improvement over prior year (Possible $1 EPS run rate - my estimate). Easy comps this quarter. Also, showing Asia demand from the 10-Q:

2010 Outlook

In 2010, we anticipate market conditions for our products in certain end markets to improve. Based on our conversations with customers, economic data and information from other market participants, it appears that the worldwide demand in the paint and plastics markets has started to stabilize. We saw significant improvement in our more mature HITOX sales during the last quarter of 2009, which has continued during the first six months of 2010. In Asia, HITOX sales for in-country use have increased and we are now starting to see production rates for HITOX used in export products increase. In addition to improving market conditions in the US and Asia, HITOX sales are beginning to benefit from new niche markets, which we are hopeful will generate additional incremental revenue for HITOX this year.

That is why I said do not short TORM and that is why shorts were squeezed and probably will have more pain to endure.

Again, low floats not for big positions or chasing. If you are like me in on the original call you can enjoy some stress free profits.

Monday, November 1, 2010

Why small cap shorts have been squeezed on certain plays $RITT $TORM $LIVE $SHZ

Short sellers have been getting squeezed on many low floaters lately. While many of these stocks do lack substance, I do not think you can call every one of them garbage unless you do some research first. In my experience, two top factors that can sustain a run and cause a squeeze are : #1 - EPS and growth that support valuation or #2 a hot sector theme that the company does or may participate in the future. If it is just #2 when the theme fades the stock will fade.

SHZ - Ran because of a seeking alpha article that said because they have fluorite they probably have rare earth minerals (hot theme). Well if a Chinese small cap had rare earth, believe me they would be putting out press releases everyday on it. Did not see the substance here nor the EPS so I expected this to drop eventually and it has. Did not have the EPS, growth, or realistic part of hot sector theme.

LIVE - I called this a week before it ran and then the day it ran when it was in the $6's. The day it ran I called it as a sympathy play on TZOO/Groupon/Local Internet advertising (hot theme) and the fact it has an extremely low float as well as cash per share was high. Expected it to go up but not all the way to $10-$13 where I got completely out. Great trade but it will take EPS, news or an acquisition to make this run again in my opinion. Did not have the substance to sustain beyond the low float run. An overload of shorts could always cause a squeeze where there is a catalyst but that catalyst would need to appear first. Did not have the EPS, growth and the theme faded after TZOO's earnings.

RITT - I originally called and played RITT on LIVE sympathy because of the low float. I was in under $2 and out in the $4's. I thought the move it made to $8 would happen the first day of the run. However, it continued to squeeze frustrated shorts. I believe that is because it was a hot Israeli tech play in the same group as RDCM which ran last year, and earnings are due, and supposedly a new product showed up on its website. It will take great EPS or hot product news to mitigate this eventually falling and I don't expect EPS to be all that great. Shorts will get relief if EPS is not all that and there is not a hot product to launch. Did not have the EPS, but was in a hot sector so it squeezed. If EPS is not good and there is no guidance for growth, it will eventually show that it does not deserve the hot sector theme. But if EPS or a hot new product is there it would be sustained because there would be created hope for EPS.

TORM - I called this stock in the $6's and it hit the $11's right away. I sold half but kept half because this is the one stock that has a reason to go higher. TORM did .43 EPS for the first six months of the year and management said the rest of the year would show growth year over year. So this company could be on pace for close to a $1 EPS run rate while competitor KRO has a P/E of near 20. Titanium dioxide is in great demand these days and TORM has a synthetic process to make a cheaper version to avoid the expensive white kind. There have been many articles out there about the demand for titanium dioxide. So you have EPS to support a move, a good story in a hot theme (minerals demand), and a low float. I would not short a stock with these characteristics. They have both characteristics. EPS and growth, with a hot sector theme.

Before you short, do the research , every small cap stock is not automatically garbage, although many can be.

Tuesday, October 26, 2010

Why $CDTID went ballistic and Riders on the $TORM

The reason $CDTID went ballistic today is a simple pattern to me. They did a reverse split and merger at the same time, which left a small float and outstanding shares. Coincidentally, they received a small, new contract and diesel emissions reduction was in the news. However, this is the SAME share structure that $SCOK and $CALL had before the both ran from the single digits to the $30+ range. Reverse split (leaving low float and outstanding), and merger with another company. If there is any interest in the industry at the time it is a plus. When $SCOK did it China coal was hot. When $CALL did it , there was talk of Skype IPO.

In the future when a Company does a reverse split and merger (especially if there is substance to the merger), leaving a low float, the possibility will always exist for a run up. However, the halt tells you not to get greedy whether you are long or if you are crazy enough to short these. I scalped some from $15-$20 and have no position. Nor did I blog or tweet on this stock ($CDTID)

Low floats or small caps in general are not for chasing or large positions. When I have profit always best for me to take some off and if I want to let the rest ride.

I was in and called $TORM today at $6.50. Read Blog Post The stock hit $11.40, before the $CDTID halt scared small cap traders. The Company reports earnings next week or two, already has $0.43 EPS for the first 6 months of 2010, and titanium dioxide shortages are in the news. Took some profit off but will manage the rest accordingly as this is a small cap with a real story and EPS that could catch fire as the titanium dioxide need is in the news and I was told was mentioned on CNBC today. $KRO has almost a 20 P/E in the same industry so if $TORM can get near a $1 EPS run rate this could be an interesting story. However, that is contingent on the next EPS report. I was in when $TORM was in the $6's and did not chase a new position so I have the luxury of taking some profit off and watching to see if this catches fire some more on the story or with the help of crazy shorts.

in TORM $6.50

in TORM $6.50. Low float so NOT A STOCK TO CHASE or for LARGE POSITIONS. Low float stocks can be volatile and dangerous.

Why I bought:
***** TORM 925k Float 1.9m O/S TORM- Bloomberg
***** Unnoticed 0.18 EPS last Quarter, .43 for the 6 months Read Press Release
***** Up against easy comps this quarter See Quarterly Comps
***** Bullish comments from CEO last quarter - The Company said it expects to continue to produce year-over-year improvement in financial results during the second half of fiscal year 2010.
Supplies of Titanium Dioxide reported to be low relative to demand
Read Article
***** Strong stock performance and 19 P/E for KRO which is in similar space

Commenting on the results, Dr. Olaf Karasch, Chief Executive Officer said, "Second quarter marked our highest quarterly sales in more than four and one half years and our sixth quarter of year-over-year improvement in profitability. The continued growth in revenue and profitability is a result of improving market conditions, the successful introduction of new products, and the hard work we have completed over the past two years to improve efficiencies and remove costs from our business. The improvement also reflects the powerful leverage in our business, as a large portion of each incremental sales dollar makes a significant contribution to our bottom line."

"We've come a long way in diversifying our product and geographic mix in the past several years. The addition of several new large customers also diversifies our customer concentration. Greater diversification should improve our ability to deliver consistent growth in revenue and profitability," Dr. Karasch continued.

Thursday, October 21, 2010

super-trades mayhem! $LIVE and let $LIVE

$LIVE, a stock I blogged about last Thursday See Blog Post while it was in the $4's, hit $22.25 today in some of the craziest trading I have ever seen since the dot.com era. I expected it to go higher but not hit $22 in minutes! I tweeted Read Tweet on it as a trade and also posted on thelion.com today Read Post. super-trades.com had it first last Thursday. Testing a system to send out my alerts through the blog real time as well as the place I always post my positions first at (www.super-trades.com).

$LIVE went up so fast I couldn't sell fast enough. I was out $10-$13 range from entries in the $4's and a few in the $5's. What a SUPER-TRADE ! As I said the stock had the lowest float I have seen and it was not for big positions and the spread was crazy.

Low floats could be in play again as $LIVE as well as $CTDID another reverse split/merger had big days. $RITT has been talked about as the next low floater to run and I picked up some for a trade in case it does a $LIVE tomorrow. $RITT float supposed to be 300-700k. I am also researching a few other low floaters. Keep in mind $ALAN was mentioned in the blog thursday as a reverse split with a nice story building on food spoilage costs savings.

This blog is not investment advice for you or anyone. It is for me to post my stock ideas. Keep in mind LOW FLOATERS can be DANGEROUS to trade. They can move up and down dollars in minutes and are hard to execute trades on. I never chase them, never have too large a position in them (after a few painful lessons) or never overstay my welcome unless they are news driven. This article today said computer trades were responsible for some of $LIVE Read Article

Tuesday, October 19, 2010

super-trades update $CCME $HIHO $ANTP

CCME hit all time high of $16.60 ! Took some profit off and will manage the rest of my shares accordingly. I do think stock will go much higher but foolish of me to have never taken some profit off the first run. super-trades winner from original call at $7.50 to $16.60. I do expect the stock to go higher still and short squeeze may start second leg.

Just a trade : HIHO had interesting news yesterday. Read News Looks like recurring revenue and potentially could be iphone cases. Company already profitable with .11 EPS It churned all day like ANTP last week. Will watch for volume price action or see if it just goes to sleep. Mental stop $2.50 on HIHO from entry around $2.80. ANTP volume has slowed but it keeps flirting to go higher. Still have half shares from $4 on ANTP.

Thursday, October 14, 2010

super-trades.com watch list $CCME $ANTP $LIVE $ALAN $OINK

CCME - The short squeeze continues ! Closed in the $14's and all time highs are in reach. Feels good to see my research proved correct again although it has taken much longer than I thought, not seeing the short/slander attack on china small caps. Well shorts overstayed their welcome on CCME that is for sure. It was funny yesterday when CCME said that Starr Investment (Owned by AIG's Herb Greenberg) was upping their stake in CCME by buying 1.5m shares from the founders at $9. Read Press Release CCME haters (even some on my favorite message board to my dismay) were instantly out saying scam and other lame comments. Well they did not see that the $9 price was the average of the month of September when the deal was negotiated and that this was actually bullish news that Starr wants more shares and reinforces CCME is legit. Well the bashers were shamed again (not as though they have much credibility left) as CCME closed at new highs for the day. We could see a parabolic jump in the next day or so the way this stock is squeezing with so many shorts in it. Remember that earnings, guidance raise , dividend, or an accretive acquisition are all possibilities in my opinion. I must say it feels good to be proved correct again with CCME! I originally bought CCME as TMI in the $7's so my core shares are rocking. (Although my trading shares did not fare as well during the short slam).

super-trades.com watch list: (If you think a stock belongs on my watch list, email me at superman@super-trades.com)

ANTP - I blogged on this stock Tuesday night this week as I picked some up at $4 in afterhours on EPS turnaround and guidance that mentioned the demand for their antennas due to smart phone use (a buzz topic). With a low float and a history of running I am watching this for follow through after taking half of my shares off in the low $5's. It seems like it was being shorted / accumulated the last 2 days and it closed strong today. Like I said I am watching this for follow through.


LIVE - This stock did a reverse split and now has approximately 600k shares o/s and a 305k float. See Bloomberg - LIVE I have never met a low float (under 1m) that I did not like :)
This stock is extremely thin and has low volume so not for large positions and is extremely speculative. However, on GOOG's blowout results (see what LIVE does in the next paragraph) this could be seen as a small cap sympathy play and/or just move when traders figure out how low the float is as low float stocks have been moving. I picked up a few today as a speculative play. Again, extremely thinly traded and low floats can be feast or famine. Read Today's Press Release

LiveDeal, Inc. provides local customer acquisition services for small businesses to deliver an affordable way for businesses to extend their marketing reach to local, relevant customers via the Internet. LiveDeal delivers website creation, Search Engine Marketing (SEM), Social Media Marketing (SMM), video, and other online marketing tools as part of its InstantAgency suite of products. These products and services are dedicated to delivering agency quality online advertising at a fraction of the price of a traditional online marketing agency.

ALAN - Another reverse split stock that left it with approximately 3.5m shares o/s and a 5.2m float. See Bloomberg - ALAN

This is what they do : Alanco Technologies, Inc. provides wireless monitoring and asset management solutions through its StarTrak Systems subsidiary. StarTrak Systems is the dominant provider of tracking, monitoring and control services to the refrigerated or “Reefer” segment of the transportation marketplace, enabling customers to increase efficiency and reduce costs of the refrigerated supply chain.

They had a press release today that sales are up 25%. Read Press Release The main angle here came from this IBM commercial I saw on TV the other night. See Commercial It seems ALAN addresses this problem with their technology. Watching for price/volume follow through.


OINK - HOGS and OINK are both China pork stocks. HOGS has exploded to all time highs. OINK just got back to its IPO price today ($6). Traders are watching this to see if it gets picked up as the next HOGS. Watching for strong volume price action and/or company/sector news. Approximately 10m shares o/s and I cannot find the float but I think the IPO was approximately 2m shares if my memory is correct. See Bloomberg - OINK

Tianli Agritech, Inc., through its subsidiary, HC Shengyuan Limited, engages in raising, breeding, and selling hogs for use in Chinese pork production and hog breeding markets. The company sells its products to distributors and large-scale swine farms. Tianli Agritech, Inc. was founded in 2005 and is headquartered in Wuhan City, the People’s Republic of China.


Again these are my investment ideas only and is not intended as investment advice for anyone. Make trades at your own risk. No individual is 100% accurate in their views.

Tuesday, October 12, 2010

super-trades is back!!! $CCME $ANTP

I am back from a vacation, time off for family , and depression that CCME did not hit $30+ :)

But seriously, CCME is a stock I first called at $7.50 when it was still TMI. It ended up hitting $14.82 from there, which was a 100% super-trades gainer. However I said it had the numbers for a much higher share price. What I did not see coming was the smear campaigns and short sellers attack on most all China small caps. This was bad judgment on my part - a bad call for super-trades. (Did you hear me? I said it was a bad call for me not to see this coming) CCME got hammered all the way back to the $7's. Some china stocks did have accounting issues. CCME was smeared on message boards (even my favorite message board to my dismay), and shorts piled on. At the latest report there were approximately 4.4m shares short CCME. They are now on the Reg SHO list for naked short sellers and it looks like the last week a forced buy in squeeze is happening. Shorts never produced one shred of evidence meanwhile CCME had blow out earnings of $0.80 last quarter and authorized a $30m share buyback. With earnings on the way, in my opinion raised guidance, and I hope the possibility of a dividend, this has the makings of a potential epic short squeeze that may already have started. Many of these shorts are way underwater in my opinion and panic buy -ins could happen. (My original buy from the $7's still looks great although some trading shares did not fare as well!)

ANTP - I would watch this stock tomorrow as they reported nice EPS and backlog afterhours. The stock has a low float and history of running. The guidance talk about the need for cell phone capacity due to smart phone and that their antennas are in the sweet spot. I picked some up around $4 in the afterhours for a trade.
Here is the press release link.

Read Press Release

Again I am blogging my trade ideas only and this is not investment advice. I have trade ideas that go well and trade ideas that don't go so well.

However super-trades is back !

Sunday, June 20, 2010

CCME - New exciting concept appears to be coming

CCME, as they stated on their last conference call, appears to be going to the SkyMall / E-Commerce concept for additional high margin revenue and more revenue from advertisers in the catalog itself. SkyMall does approx 100m+ in revs from what I see and serves 650m customers annually (travelers who can view the catalog). CCME has 800m customers annually. This is nice potential for big additional revenue growth on top of the huge existing organic growth...and potentially E-COMMERCE........see link on home page titled "E-Business". Appears to be not much cost involved for CCME just margins. They are an order taker and advertiser. However, could add online sales element. Another reason CCME should be a double to triple soon once Wall Street wakes up to this gem. The Yuan announcement over the weekend should cause a rally in china stocks over the next few weeks.

View Link on CCME Website


Technically, SkyMall is an advertising company. Retailers pay to have their products listed in the catalog, which is published four times a year and changes most of its product selection each time. SkyMall has a variety of financial arrangements with its retailers, Ms. Aguilera said, and sometimes gets a cut of sales in addition to charging for advertising.

Forty percent of SkyMall customers order merchandise through the company’s toll-free telephone number and the rest order through the SkyMall Web site; SkyMall said sales from the Web site alone were up last year, to $81.5 million from $75 million in 2007.

SkyMall Article


SkyMall 650m annual customers around their catalog. Web Site Sales alone were $82m.

CCME has arround 800m passengers on their buses annually.

SkyMall Website

Monday, June 14, 2010

super-trades.com update EDS, CREG, HWG, CCME, TRIT, DGW

EDS - I think the stock is down because they have been way too silent. More press releases and information on earnings are needed. The earnings report is coming up and they said they will have quarterly releases after that. I would buy back big once I see this next report as the stock is very cheap at these levels. Great nibbling area here for me to get a small position started. Once the report and guidance are out the stock should snap back quickly. Morgan Joseph reiterated the stock as a buy today and $13 target. A good play on Chinese consumer demand once they communicate earnings and guidance. Silence is stupidity in this market and I question the Investor Relations firm strategy thus far. After being $11.50+ for so many days they will go through warrant overhang issue like CCME for a few months. I believe warrants expire worthless in November 2011 if memory is correct. So if numbers and guidance are what I believe they would be it would be a great trade from these levels to the $12-$13 range. But they need to start speaking up like CCME has.

CREG - Was in this for a trade on RINO earnings and uplisting but ended up getting stopped out in the China downdraft. Another company that has been way too silent with the street/investors. Was a bad call by me all things considered. Will watch the earnings and news flow but they need to prove themselves to me.

CCME has made all the right moves. Big 4 auditor, Investment from reputable Starr International after months of diligence, frequent communication with press releases, Insider buy, funds starting to buy, incredible growth and cash flow generation. That is why the stock has held up incredibly well and I believe it is about to make a move to the $15-$20 and I personally rate it as a strong buy for myself at these levels.

HWG - Nailed earnings on this one and the stock came close to may target of $60 from $40 (hit the high $50's).

TRIT, DGW - Will watch for entry if they get lower. Love the water sector in China.

Sunday, June 13, 2010

CCME - How to Profit From China's Emerging Middle Class

Much has been written as of late about the emerging middle class in China and the the increase in domestic consumption. Workers wages are rising, and multi-national companies are tripping over themselves to establish their brand in what they see as the next big growth market. The headlines are everywhere:

"Pepsi, Coke in race to conquer China"
"China to become second largest advertising market"
"Getting the Chinese to drink like Americans"
"American Eagle wants to capitalize on China's consumer spending boom"

In a recent article, Stephen Roach said China will soon embark on a 5 year stimulus plan to boost internal consumption. In this Bloomberg article the other day, it stated "Companies including Volkswagen AG and PepsiCo Inc. are boosting investment in the world’s third-largest economy to tap rising consumer spending fuelled by the government’s stimulus package and higher wages.
“China will remain an attractive investment destination as the government spurs consumer spending,” said Xing Ziqiang, a Beijing-based economist at China International Capital Corp. “The expansion of infrastructure, including transport links, in central and western regions is also opening up a vast inland market for consumption and investment.”


While Chinese stocks have been in a bear mode, it has mainly been the property and infrastructure stocks. CAAS, FMCN, ASIA, HMIN, SORL, AUTC, CAGC, CNYD, DEER are just some examples of stocks that still maintained P/E ratios of 10-30, even in the latest bear market for Chinese companies. The common theme amongst most of them is they are domestic consumption stocks.

Well what is apparent to me is this is the next momentum wave for Chinese stocks. What is equally apparent to me is that there will be a boom of advertising as companies fight to get the attention and loyalty of chinese consumers. That is why China MediaExpress is the most undervalued Company in this space and the best stock I can find to take advantage of this next wave of momentum.

China MediaExpress Holdings, operates the largest television advertising network on inter-city express buses in China. CCME's clientele includes local brand names as well as those well-known international and national brands such as Coca Cola (KO), Pepsi (PEP), Siemens (SI), Hitachi (HIT), China Telecom (CHA), China Mobile (CHL), China Post, Toyota (TM), Bank of China and China Pacific Life Insurance.

1) CCME is audited by a big 4 auditor Deloitte. A major investment firm Starr International, performed months of diligence before investing $30m in CCME. They were recently listed on the Nasdaq Global Select market which has the most stringest corporate governance requirements.

2) CCME has long term (5-8yr) agreements with over 50 bus operators that cover about 22,000 buses (up from 10,000 in 2007) with 80M passengers/month - the whole market is estimated at 65,000 buses. There are substantial benefits to this type of scale in dealing with advertisers, particularly in an advertising market as immature and fragmented as China. They are also an excellent way to reach second and third tier cities, as many advertisers are clamoring to do.

3) CCME has approximately $114 million of cash with no debt. They will generate approximately $50m of cash this year from operations. Their DSO's are approximately 40 compared with over 100+ for many Chinese companies. Their rates are low so they get paid quickly. This is unique for a Chinese companies. With CCME there is no fear of furhter dilution. Their CFO recently stated, "we have sufficient resources to fund our business expansion plans, including internal growth initiatives as well as potential acquisitions.”

4) CCME has amazing growth. The Net Income target is $71-$75m this year which would represent 79% growth from 2009. That $71-$75m range seems very conservative by management since they did $18m Net Income in Q1 ($72m run rate) and they expect higher growth and margins the rest of the year. Management has a huge incentive to make $84m of net income this year in the form of earn out shares. I believe the Company will make the $84m in net income this year. With approximately 40.5m fully diluted shares, EPS could range from the $1.85 guidance to over $2 if they hit the earn out target. FMCN, which is the best comparable in this sector, currently trades at a P/E of 17 based on the 2010 estimates of $0.94 EPS. To give CCME a P/E of 17, they would have a share price of $34 right now. This research report gives them a $35 target and said they are discounted 68% to their peers. Read Report

This stock is incredibly undervalued given the above 4 discussion points. CCME, being a new listing has yet to receive analyst coverage. The Company stated they have met with many analysts and institutions so I personally expect coverage soon. Analysts typically assign P/E ratios anywhere from 10-30, depending on the Company. Because of the above discussion points I think CCME qualifies for a higher multiple. Lastly, they were recently selected to be added to the Russell Global Select fund.

CCME is the most undervalued stock poised to profit from China's emerging middle class.
I am long CCME.

CCME Report $35 Target - Trades at 68% Discount to Peers

CCME report $35 target Trades at 68% discount to peers

Click to Read Research Report


http://docs.google.com/fileview?id=0B1ziYZzhUnpGMzdmZGMzZTUtMmQzNy00NzcwLWI0NzAtNzUzMGQ2ZTEwNGE4&hl=en

Wednesday, May 19, 2010

CCME going to NASDAQ !!!

China MediaExpress Holdings, Inc. to Begin Trading on the NASDAQ Global Select Market on June 3rd
Last update: 5/19/2010 8:45:00 AM
FUJIAN, China, May 19, 2010 (BUSINESS WIRE) -- China MediaExpress Holdings, Inc. (CCME) ("CME" or "Company"), China's largest television advertising operator on inter-city and airport express buses, today announced that its common stock has been approved for listing on the NASDAQ Global Select Market.
Effective as of the close of trading on June 2, 2010, the Company's common stock will cease trading on NYSE AMEX. Upon the opening of trading on June 3, 2010, the Company's shares will commence trading on NASDAQ Global Select Market, under the same ticker symbol "CCME".
Mr. Zheng Cheng, CME's Founder and CEO, noted, "We believe that NASDAQ represents the best fit for our Company and our shareholders. NASDAQ's market maker structure should lead to increased liquidity, an expansion in our shareholder base and, ultimately, to increased shareholder value. In addition it will provide our investors with the best prices and the fastest execution. As the world's largest electronic stock market, NASDAQ promotes innovation and attracts leading growth companies from a diverse group of sectors. CME is one of the very few Chinese companies to qualify for the NASDAQ Global Select Market, which has the highest initial listing standards of any exchange in the world. Out of 136 China-based companies listed on NASDAQ, only 26 companies such as Baidu, CTrip.com International, Shanda Interactive Entertainment and NetEase.com, fulfill NASDAQ Global Select Market requirements. Within only seven months since CME became a public company in October 2009, we have qualified and are making the decision to move to the NASDAQ Global Select Market. This achievement is an important milestone for our Company and we look to the future with confidence."

Tuesday, May 18, 2010

CCME getting strong institutional buys

Stock should be ready to make a big run

http://www.mffais.com/ccme

Monday, May 17, 2010

CCME - Huge Bus Acquisition News

China MediaExpress Holdings, Inc. Announces Addition of 816 Inter-City Express Buses to Its Existing Network


Press Release Source: China MediaExpress Holdings, Inc. On Monday May 17, 2010, 8:45 am
FUJIAN, China--(BUSINESS WIRE)--China MediaExpress Holdings, Inc. (NYSE Amex: CCME) (“CME” or “Company”), China’s largest television advertising operator on inter-city and airport express buses, today announced that it has signed a framework agreement with a media company to purchase the exclusive right to operate television screens on 816 express buses originating in the Autonomous Region of Inner Mongolia.

This agreement grants the Company the exclusive right to provide television programming and advertisements on 816 express buses managed by several bus operators, for a period of seven years commencing May 1, 2010. In accordance with the framework agreement, CME paid a one-time fee for the acquisition of the operating right to the media company.

In addition, CME signed a seven-year long-term framework contract with the bus operators of the 816 express inter-city buses to supply entertainment programming along with paid advertising. CME will pay the bus operators a fixed monthly concession fee over the term of the contract, with an annual increment of 10%-30%.

Inner Mongolia is China’s third largest region and one of its fastest growing economies, with 18% annual GDP growth since 2005. Inner Mongolia’s economic growth has led to a boom in construction, including new commercial development and large apartment complexes in the region. Over the last decade, Inner Mongolia’s industry has grown mainly around coal, power generation, and forestry-related industries. The local government is now focusing its efforts on developing six competitive industries, namely energy, chemicals, metallurgy, equipment manufacturing, processing of farm produce as well as hi-tech products.

Mr. Zheng Cheng, CME’s Founder and CEO, noted, “With this framework agreement we have increased our presence in Inner Mongolia and have enlarged our network to approximately 22,300 express buses. As previously mentioned, we are focusing our work to meet the demands of our advertising clients who are accelerating their efforts to grow their sales beyond the first- and second-tier cities into less developed markets, including the fast developing region of Inner Mongolia. The addition of Inner Mongolia into our network has enhanced our geographic coverage. This signing of this agreement is a result of the great efforts we have put in the past six months.”

HWG $3.44 EPS for the Quarter

HWG was a stock I blogged and bought on November 16, 2009 at $40 Read Blog Post.

Warning - Stocks that have such a low float (500k) and number of shares outstanding (1.5m) can trade thin and be very volatile. They can drop several dollars on low volume. I never take large positions in such stocks and I always understand that they can be illiquid and have risks. I never chase these type of stocks.

Press Release Source: The Hallwood Group Incorporated On Friday May 14, 2010, 5:42 pm EDT
DALLAS, May 14 /PRNewswire-FirstCall/ -- The Hallwood Group Incorporated (NYSE Amex: HWG) today reported results for the first quarter ended March 31, 2010.

For the quarter, net income was $5.3 million, or $3.44 per share, compared to net income of $3.0 million, or $1.94 per share, in 2009, on revenue of $47.2 million and $39.7 million, respectively.

Friday, May 14, 2010

$CCME Blowout EPS $.54 !!!

Revenue increased by 137% to $44.5 million as compared to $18.8 million;
Gross margin for first quarter was 60%;
Income from operations increased by 130% to $24.2 million as compared to $10.5 million;
Net income increased by 143% to $18.1 million as compared to $7.5 million; and,
As of March 31, 2010, the Company had more than $114.4 million in cash.

Monday, May 10, 2010

CCME - Q1 Blow Out Earnings

Today CCME released a filing that previewed their net income for Q1 2010. They said it will be approximately $18m. In Q1 2009 they did approximately $7m. This is an unheard of 150%+ net income growth. EPS should come in close to $0.50 for Q1 which is their weakest quarter. Q4 is typically their strongest quarter and they did a record $14m net income in Q4 2009. This company is the most undervalued, hyper-growth, cash rich company that I see out there. They should easily do over $2 EPS in 2010 by my estimations. The company trades at a P/E in the 5's. They have 150% net income growth, margins in the 60-70% range, $100m cash in the bank, strong cash flow generation, and an exclusive contract in their industry. FMCN trades at approximately a 20 P/E and is in the same space. Companies with CCME's characteristics usually get a high multiple. A 20 multiple for CCME would make it a $40 stock. I have called some big winners in the past, EFUT $11 to $50, PDO $5 to $45, and RINO $7 to $30 , to name a few, yet none of them had the growth numbers like CCME. I do not see numbers like this very often. It is a matter of time before Wall Street notices this gem and it rockets to a proper valuation. I believe CCME is due to report by this Monday, May 17th.


We anticipate a significant change in our results of operations from the corresponding period in the last fiscal year due to our former status as a shell company. Based on currently available information, we anticipate reporting net income of approximately $18 million for the quarter ended March 31, 2010, before making any adjustments for the accounting of the preferred shares that we previously issued for the quarter ended March 31, 2010.

Read Filing

CCME going to have HUGE Q1

18miilion in Net Income way above expectations!

CCME blowout quarter coming "We anticipate a significant change in our results of operations from the corresponding period in the last fiscal year due to our former status as a shell company. Based on currently available information, we anticipate reporting net income of approximately $18 million for the quarter ended March 31, 2010, before making any adjustments for the accounting of the preferred shares that we previously issued for the quarter ended March 31, 2010."


Most undervalued growth stock out there

Friday, April 16, 2010

CCME Right Place Right Time

This is from an article the other day on the booming China Ad market:

Advertisers are accelerating efforts to grow sales beyond China's first- and second-tier cities into less-developed markets, and that expansion into lower-tier cities requires bigger media investment.

Read Article


This is from CCME PR today:


“As advertisers are accelerating their efforts to grow their sales beyond the first- and second-tier cities into less developed markets, we are confident that they will continue to view our large network of buses and wide geographic coverage, which covers many of the third-tier cities, as a great advertising platform to promote their products and services to a large number of travelers at a very competitive cost. We will continue to look for additional opportunities to expand our current network both organically and through similar acquisitions of the operating rights from other local media companies.”

CCME Press Release

CCME News - This Stock Will Eventually Make a Big Run

Read Press Release

China MediaExpress Holdings, Inc. Announces Addition of 527 Express Buses in Its Existing Network

Press Release Source: China MediaExpress Holdings, Inc. On Friday April 16, 2010, 8:45 am
FUJIAN, China--(BUSINESS WIRE)--China MediaExpress Holdings, Inc. (NYSE Amex: CCME) (“CME” or “Company”), China’s largest television advertising operator on inter-city express buses, today announced that it has signed a framework agreement with a media company to purchase the exclusive right to operate television screens on 527 express buses originating from the city of Huizhou in the Guangdong province. This agreement grants the Company the exclusive right to provide television programming and advertisements on 527 express buses managed by one bus operator, for a period of five years which commenced on April 1, 2010. According to the framework agreement, CME paid a one-time fee of RMB 50,000 per bus for the acquisition of the operating right to the media company and will pay a monthly concession fee to the bus operator over the term of the contract.

Guangdong is one of the richest provinces of China, with the highest GDP among all the provinces, contributes approximately 12% of China's national economic output, and is home to the production facilities and offices of many multi-national and Chinese corporations. In addition, Guangdong’s provincial capital, Guangzhou which is China’s third largest city, after Beijing and Shanghai and its economic hub Shenzhen, are amongst the most populous and fast growing cities in China. Furthermore, Guangdong has one of the most developed highway system in China. Each of the 21 administrative divisions of the Guangdong province is well connected through an extensive network of highways, which by the end of 2010 is expected to be more than 3,000 miles long.

Zheng Cheng, CME’s Founder and CEO, noted, “This framework agreement comes on the heels of our contract with the organizers of the Asian Games in the city of Guangzhou to display a 30 second advertisement promoting the games on our network of buses and, the agreement to purchase the exclusive right to operate television screens on 124 express buses originating from the city of Shenzhen, both of which we announced last month.”

“As advertisers are accelerating their efforts to grow their sales beyond the first- and second-tier cities into less developed markets, we are confident that they will continue to view our large network of buses and wide geographic coverage, which covers many of the third-tier cities, as a great advertising platform to promote their products and services to a large number of travelers at a very competitive cost. We will continue to look for additional opportunities to expand our current network both organically and through similar acquisitions of the operating rights from other local media companies.”

Wednesday, April 7, 2010

CCME - Article Most Undervalued Companies

China MediaExpress (CCME) has issued incredible revenue guidance of 80% growth for 2010, which doesn't even include the expansion of its bus lines which will surely occur. With a P/E of just under 7, this company's valuation does not make any sense, considering it just uplisted to Amex. The markets will eventually realize their mistakes and investors will be strongly rewarded.

My sentiments exactly !!!

Read Article

EDS Reports $1.59 EPS

Read Press Release

Tuesday, April 6, 2010

Superman what do you think about CCME ?

1) I am still holding CCME

2) I first blogged on CCME at $7.50 when it was TMI Read Blog Post. It has since hit a high of $14.82 which is a 98% gain.

3) Many traders like myself who have a lower cost basis because they bought early and did not chase recent highs, have cushion and can focus on the fundamentals and not the short term day to day trading (or daytrading).

4) Speaking of fundamentals, I have not seen a report out recently where a Company has higher growth, profit margins, cash flow generation, and guidance like CCME. That is a fact that remains. They are trading at a 5-7 forward P/E , depending how they use their $100m. FMCN trades over a 20 P/E and is in a similar space, out of home advertising in China. CCME could be anywhere from $20-$40 and it could be justified with their numbers on a fundamental basis.

5) CCME has received a $30m investment from Starr International and has now been audited by a Big 4 Accounting firm.

6) CCME trading is volatile. On some days you see crazy buying and some days you see crazy selling. Yes it can be frustrating to watch. However, it has not been limited to CCME, many Chinese small caps have been trading with weakness and/or volatility.

7) CCME's float went from 750k to a much more institution friendly 8-10m in a short time period due to the 8m warrant holders that converted to common. That created 8m holders of stock with a low cost basis. When a float of any stock (especially a low float of 8-10m) goes through this you are going to see volatility until the float is in stronger hands no matter what the fundamentals are.

8) Some of the 8m warrant converts may have wanted to sell half or all of their low cost basis stock.

9) For all of the selling going on at times, someone with big money is absorbing all of these sells at a very nice price. Forward P/E of 5-7. The float is getting into stronger hands.

10) Naked shorts realize #7 and #8 and have been naked shorting CCME. CCME is on the SHO list due to naked shorting. These naked shorts will eventually have to cover soon. If this can be timed with the slightest of good news it will create rocket fuel like you have seen in many of my past monster stocks PDO, EFUT, RINO, etc. By the way RINO is amongst the most heavily shorted stocks. It encountered heavy selling/shorting in the teens. It is now in the $20's after hitting $30's.

11) Also for all of the naked shorts selling see point #9.

12) I have an expression "EPS does not lie". No matter what the chart says, the bashers, the skeptics, if a Company puts up numbers eventually the stock will get fully valued.

13) So it comes down to capital, cost basis, timing, and opportunity/risk. If your cost basis is low, you have adequate capital per your size investment, you believe in the story/numbers, then you have time and can also manage your opportunity/risk. If you are a daytrader and chased in the $14's then that is a different story. The market is not a formula nor does it make perfect sense in the timing you think it should. No one trading / investing style is always correct. It is always good to take at least some profit off when you have it if you are worried. (With CCME I have made an exception to this rule for myself because I have the capital to do so. However, the rule is the best advice I can give)

SKBI took forever to realize the gains I thought it could. Called it in the $11's and it hit split adjusted $24. RINO pulled back before it blasted off. PDO was naked shorted heavily before taking off. All I know is unless the story changes, CCME is greatly undervalued. It may get properly valued today, next week, or in 3 months, the question is do I have the time, cost basis and capital to manage the opportunity/risk that the market presents with CCME and every stock?

Long CCME

Wednesday, March 31, 2010

HWG 10-K out $11+ EPS for the year

HWG, a super-trades.com pick since $40, has been flat, has reported their 2009 EPS of over $11. Thin and volatile stock not for new traders, but I said $10+ EPS.

Read 10-K

CCME files Form 10-K !

I believe this was the last hurdle before institutions buy in heavy:

Read 10-K

Thursday, March 25, 2010

Still holding CCME

Digesting this move and getting ready for another move in my opinion.

Out Half of TRIT at $16.70 range from $15 entry

will manage the rest accordingly

Out Half of NIV at $4.20 from $3.30 Entry

will manage the rest accordingly

Do Not Chase - I bought NIV at $3.30 in Pre Market

10-K out last night $.59 EPS for 2009

would add under $3.50 but would not chase

Wednesday, March 24, 2010

in TRIT $15 After Hours - Here is Why

In TRIT afterhours at 15 and will add tomorrow if I can in 14's

2010 Guidance
For 2010, we anticipate that our revenues will range between $40.6 million and $50.5 million. We anticipate our net income will likely reach between $7.0 million and $9.2 million. We expect that we will be able to reach these revenue and net income projections without receiving further financing.

5.2m shares o/s

EPS guidance is $1.33-$1.75

No more dilution

China Water sector

Guides for:

Revenue Growth: 142% - 200%
Net Income Growth: 81% - 138%
No further financing needed


More to come

Out Half of NIV at $4.30 from $3.30 Entry

will manage the rest accordingly

2 Pieces of super-trades advice

1) If you are a daytrader, need to make money/trade everyday, or are impatient then we have exact opposite styles and you will not like the stocks I usually buy - I waited months for CCME to take off

2) Not ever stock I pick will be a CCME or a PDO....do own diligence I will have stocks that do not work

Tuesday, March 23, 2010

CCME - Blow Out Earnings & Guidance

China MediaExpress Holdings, Inc. Announces 2009 Fourth Quarter and Year-End Financial Results

Fourth Quarter Revenue and Net Income Increased by 90.6% and 99.6%, Respectively

Announces 2010 Net Income Guidance

CCME $1.80 EPS for 2010 without acquisitions throwing off huge crash and growth !!!

FUJIAN, China--(BUSINESS WIRE)--China MediaExpress Holdings, Inc. (NYSE Amex: CCME) (“CME” or “Company”), China’s largest television advertising operator on inter-city express buses, today announced financial results for the fourth quarter and year ended December 31, 2009.

Financial Highlights – Fourth Quarter 2009 vs. Fourth Quarter 2008

* Revenue increased by 90.6% to $32.0 million in the fourth quarter of 2009 as compared to $16.8 million in the same quarter of 2008;
* Gross margin for fourth quarter was 68.9%;
* Income from operation increased by 104.7% to $19.5 million in the fourth quarter of 2009 as compared to $9.5 million in the same quarter of 2008; and
* Net income increased by 99.6% to $14.3 million in the fourth quarter of 2009 compared to $7.2 million in the same quarter of 2008.

Financial Highlights – Full Year 2009 vs. Full Year 2008

* Revenue increased 52.3% to $95.9 million in 2009 as compared to $63.0 million in 2008;
* Gross margin for year ended December 31, 2009 was 65.7%;
* Income from operation increased by 61.3% to $56.6 million in 2009 as compared to $35.1 million in 2008;
* Net income increased by 58.2% to $41.7 million in 2009 as compared to $26.4 million in 2008; and
* As of December 31, 2009, the Company had $57.2 million in cash.

Zheng Cheng, CME’s Founder and CEO, commented, “2009 has been an exciting and eventful year for our Company. We started the year as a privately-held business and concluded as a publicly owned company trading on the NYSE Amex. Since our inception in 2003, we have been working hard to successfully grow CME to a multi-million dollar company and to become the market leader in the express bus advertising industry in China. 2009 was the best year in our history as we continued the rapid organic growth of our business by: signing new contracts with additional bus operators partners, both in the areas where we have a strong presence and in new areas as well; entering into exclusive agreements with several operators of airport express buses, broadening our revenue sources to further augment our potential revenue growth through providing additional advertising channels to advertisers and new services to passengers such as the broadcast of the embedded advertisements which are displayed during the broadcasting of the content; and exploring a number of avenues to further grow our market share and geographic coverage through possible acquisitions.”

Discussing 2009 fourth quarter and year-end results, Mr. Cheng noted, “As expected, our fourth quarter was the strongest quarter of the year. Our revenue for the quarter grew by 22.3%, 67.4% and 70.2% compared to the third, second and first quarters of 2009, respectively. Also net income for the quarter increased by 22.7%, 72.8% and 92.0% compared to the third, second and first quarters of 2009, respectively.

He added, “Our network has grown with the signing of several new agreements with bus operators. As of today, our network includes 49 bus operator partners, up from 46 at the end of November; these agreements run from three to eight years. The total number of buses equipped with our television systems is now over 21,000, increasing approximately by more than 1,000 buses since the end of November.”

Mr. Cheng continued, “Our successful platform, the large and growing network of bus operators partners, the wide geographic coverage and our competitive advertising rates, continue to attract a large number of international and national brands to our advertising network. More than 450 advertisers have purchased time on our network either through advertising agents or directly from us. Our growing clientele includes local brand names as well as well-known international and national brands such as Coca Cola, Pepsi, Wahaha, KFC, Siemens, Hitachi, Haier, China Telecom, China Mobile, Nokia, China Post, Procter & Gamble, Bank of China, China Constructing Bank and China Pacific Life Insurance.

“In addition, we plan to further broaden our revenue sources by providing additional advertising channels to our clients and new services to passengers. These additional revenue sources include: a) separately packaging advertising time slots on airport shuttle buses and tour buses which should generate higher revenue, b) displaying soft advertisements packaged as entertainment content, c) establishing stationary advertising media at inter-city express bus terminals to complement our main business, and d) offering new services to advertisers and passengers by featuring hotels, spa resorts, local restaurants on our network along with relevant contact information of service providers and charge advertising fees.

“We remain focused on improving our profit margins by attracting more direct advertising clients. As a result, at the end of 2009 direct clients accounted for 21% of our net revenues, as compared to only 2% at the end of 2008 and 16% at the end of the 2009 third quarter. Our goal is for direct advertising clients to represent approximately 35% our net revenue mix by the end of 2010.”

Jacky Lam, CME’s Chief Financial Officer stated, “In 2009, CME generated approximately $46.2 million of cash from operating activities, of which $16.4 million were generated in the fourth quarter. Our cash position remains very strong and as of December 31, 2009, we had $57.2 million of cash.”

Mr. Lam continued, “In January 2010, we completed two important transactions for our Company. The first transaction was a $30 million private investment from Starr International Company, Inc. (“Starr International”), involving newly issued shares of CME Series A Convertible Preferred Stock and CME common stock purchase warrants. We are very pleased that Starr International, a respected investment firm with a significant presence in China and the US, has shown great confidence in our growth prospects and has become one of our major investors.

“The second transaction was the completion of the exercise and redemption of all of our outstanding public warrants, which brought CME net proceeds (after deducting the amounts paid to the original shareholders of CME) of approximately $26 million. Through the redemption we simplified our complicated capital structure, increased the public float, and made CME more attractive to a larger number of institutional investors. In addition, we eliminated the warrant overhang, removed the associated downward pressure on our stock price and the trading volatility associated with arbitrage.”

Mr. Lam added, “As a result of the above two transactions and the settlement of $10 million promissory note due to the CME original shareholders, as of today, we have over $100 million in cash, to fund our business expansion plans, including internal expansion initiatives and potential mergers and acquisitions of local companies capable of delivering customized, time-specific and local-oriented content.”

Pursuant to the earn-out provisions of the share exchange agreement (“Share Exchange Agreement”) entered into in connection with the Company’s initial business combination with TM Entertainment and Media, CME anticipates issuing the original founding shareholders of the Company 1,000,000 common shares. This earn-out issuance is a result of the Company achieving its 2009 adjusted net income (as defined in the Share Exchange Agreement) of $42 million.

Announces 2010 Guidance

Based on the current customer base, geographic coverage, network of express buses and existing revenue streams, CME’s management projects that its 2010 net income (non-GAAP which is before share based compensation or fair value adjustments for the Company’s financial instruments), will be in the range of $71 million to $75 million. These projections exclude the impact of any possible acquisitions, additional of new buses and new investments in other media projects in 2010.”

Mr. Cheng concluded, “We believe that our Company is well positioned to further benefit from the rapid growth in the advertising spending in China, the second largest advertising market in Asia, and one of the largest and fastest growing markets in the world. We are very proud of our success and are confident that our Company has a bright future.”

Friday, March 19, 2010

I bought some CREG - Uplisting Monday

In CREG at $5.50 for a trade they are uplisting to Nasdaq Monday. The sector is very hot and it reminds me of RINO.

Target $7-$12 depending on momentum and volume.


Recycling Energy Corp. (OTCBB:CREG.OB;.ob - News) is based in Xi'an, China and provides environmentally friendly waste-to-energy technologies to recycle industrial byproducts for steel mills, cement factories and coke plants in China. Byproducts include heat, steam, pressure, and exhaust to generate large amounts of lower-cost electricity and reduce the need for outside electrical sources. The Chinese government has adopted policies to encourage the use of recycling technologies to optimize resource allocation and reduce pollution. Currently, recycled energy represents only an estimated 1% of total energy consumption and this renewable energy resource is viewed as a growth market due to intensified environmental concerns and rising energy costs as the Chinese economy continues to expand. The management and engineering teams have over 20 years of experience in industrial energy recovery in China.

Thursday, March 18, 2010

I am leaving thelion.com

I will no longer be posting at thelion.com website. I will post here on my blog and twitter and will be re-emerging at a new message board. Please feel free to contact me with questions.

Tuesday, March 16, 2010

Research Report out with $28 Target on CCME

Get Report

CCME Filing out - Net Income $41m for 2009 !

There is a filing out this morning where CCME said they will have net income of approximately $41m for 2009. This is great as it shows approximately 100% net income growth for Q4 year over year! The filing says approximately $41m so we will have to wait until the 23rd for the exact number. Additionally they may not be required to give 1m shares to management for earnout but that could be offset by shares that Starr may receive if they come in just under $42m making it a neutral event to EPS. CCME had no analyst targets to hit or miss, so this is a great number and should result in great headlines on March 23rd when they release the full earnings report. My previous blog post underlines why this stock is very undervalued and why analyst coverage should be coming in my opinion. There was uncertainty to what kind of numbers this Company would actually put up and this is now removed. There was uncertainty to what 2010 would look like and that was removed last week when the CFO said 50% organic growth and 50% acquisition growth. This filing is just for technical reasons because the report was due on the 15th of March and they are releasing it on the 23rd.

See Filing

Read previous Blog Post

Sunday, March 14, 2010

CCME Earnings Preview

CCME, a stock I have been in since I called it at $7.50 when the symbol was still TMI Read Blog Post, will report financial results for the fourth quarter and year- ended December 31, 2009, on Tuesday, March 23, 2010 before the stock market opens. Following is what I think the results may look like and is my opinion only based on facts that are available.

It is important to note that CCME does not have any analyst estimates to hit or miss right now. So that headline risk does not exist for them on March 23rd. They do however, need to show growth and have a bullish outlook on 2010. Then I believe the analyst coverage and upgrades will be follow.

Let's address both the growth and then potential for a bullish outlook.

Growth 2009 v.s. 2008:
The last earnings information was the Q3 report for the CCME business. Read Press Release Revenue and Net Income for the first 9 months of 2009 exceeded Revenue and Net Income for all of 2008.

Financial Highlights – Third Quarter 2009 vs. Third Quarter 2008

•Net revenues increased 65% to $26.1 million in the 2009 period compared to $15.8 million;
•Gross margin for the 2009 period was 67% of net revenues; •Operating income increased 83% to $15.5 million in 2009 compared to $8.5 million; and,
•Net income increased 83% to $11.7 million compared to $6.4 million.
Financial Highlights – Nine Months 2009 vs. Nine Months 2008

•Net revenues increased 38% to $64.0 million in the 2009 period compared to $46.2 million;
•Gross margin for the 2009 period was 64% of net revenues;
•Operating income increased 45% to $37.2 million in 2009 compared to $25.6 million;
•Net income increased 43% to $27.4 million compared to $19.2 million.

Now as far as Q4 2009, the Company has an internal target of $42m see SEC filing for which management has incentive to hit both because they will receive 1m shares if they hit it and they will be penalized if they miss it due to the recent financing deal they signed with Starr International. Read SEC filing on Starr deal

Since this Starr International deal was signed after 2009, I am going to make the assumption that CCME made more than 42M net income for 2009 and did not sign an agreement that they knew would penalize them because the net income target was already a miss. That would mean 14.5M+ net income in Q4. The net income comparison for Q4 2008 is 7.2m. see page 56 for 2008 results That would mean 100% year over year net income growth for Q4 2009 over Q4 2008!!! That would be a strong headline, whether they strongly beat the 42m target or even come close to it.

In the Q3 press release the CEO made this comment about Q4 --- Mr. Cheng concluded, “Historically, our fourth quarter is seasonally our best quarter. It appears that the 2009 fourth quarter will be no exception.”

And in a press release on Feb 8, 2010, the CFO said this about Q4 - Jacky Lam, CME’s Chief Financial Officer stated, “As anticipated, we believe our 2009 fourth quarter was exceptionally strong. Read press release

CCME had approximately 24m shares outstanding and approximately 10m warrants with a strike price of $5.50 at the end of 2009. Estimated fully diluted shares outstanding according to GAAP using the treasury method will be approximately 29m at the end of 2009. EPS for 2009 should be approximately $1.45 if they hit the 2009 $42m net income target. CCME was a SPAC and they acquired the CCME business in Q4 2009. Recently another SPAC reported earnings and used the GAAP treasury method to calculate EPS. Read Press Release (CCME has approximately 38.5m shares outstanding here in March 2010 so it would be approximately $1.09 EPS if you choose to look at it in a non-GAAP manner for comparison.)

Growth 2010 v.s. 2009:

The 2010 net income target for management is $83.5m. This would represent 99% growth over 2009 net income assuming they hit the 42m target. Management has strong incentive to hit this target as they would receive 7m shares!. The penalty on the Starr deal would be if they have less than 55m net income in 2010.

On March 8, 2010 (last week), the CFO said they expect to have 50% organic growth and then seek an additional 50% growth from acquisitions with their cash war chest of $100m. Listen to webcast at 22:40 into it Just last week the CFO said 50% organic growth in 2010 and another 50% growth from acquisitions. Does that sound like a Company about to warn for 2010??? No the outlook for 2010 was given at that conference and it was bullish 50-100% growth. CCME should have approximately 39.5m shares outstanding (assuming they hit the 42m net income). If they hit just the 50% organic growth that would be approximately $1.60 EPS for 2010. (42 X 1.5 / 39.5m). If they achieve the $83.5m net income target that would be approximately $2.11 EPS for 2010. (83.5 / 39.5)

Reasons why CCME deserves a high P/E multiple of 15 - 20 :

1) Growth - 100% YOY Net income growth 2009 over 2008 and potential to do 50-100% again in 2010 over 2009.

2) Barriers to entry - CCME has an exclusive license from China's Minestry of Transportation to install in-vehicle television systems on buses traveling on highways nationwide. (Page 12 of the March 9 presentation)

3) Extremely high Gross Profit and Net Income margins - 64% Gross Profit and 43% Net Income for first 9 months of 2009.

4) Strong cash flows - $30m cash flow generated from operations for first 9 months of 2009.

5) $100m of cash and no debt


CCME with only 50% organic growth in 2010 and EPS of $1.60 :

10 P/E would be $16 price per share (would be very low P/E for this type of growth - shown to illustrate that CCME is currently undervalued)

15 P/E would be $24 price per share
20 P/E would be $32 price per share

CCME with 100% targeted growth in 2010 and EPS of $2.11 :

10 P/E would be $21 price per share (would be very low P/E for this type of growth - shown to illustrate that CCME is currently undervalued)

15 P/E would be $31.65 price per share
20 P/E would be $42.20 price per share


Lastly, here is another Chinese Bus competitor (although they are more inner-city and not public in US) and this is how they are doing and what they said for 2010.
Read Press Release

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Welcome to super-trades.com, blog home of Superman. Purpose of this blog is for me to discuss my trades and stock ideas (As well as opinions and rants on stock market related issues). I will mention the date and price I enter. As far as exits, I always try to take half off when I have some profit and if I believe in the stock, let the rest run further. I always also use mental stop limits, at which time I would exit and minimize any losses. I do not like to give price targets unless I can support them by P/E in some way or by comparison to another stock. I just post stock trades and ideas that I believe will go higher (or lower for shorts) and the reason I believe that. Individuals should have their own strategies for managing profits and losses. My stock picks tend to NOT be daytrades at all and many take time to move. I am not an investment advisor and this blog should not be considered or followed as investment advice.