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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

5 comments:

Tiger Woods said...

SKBI had a great Q4 report with P/E of 7 and still got downgraded. Any idea why?

Anonymous said...

any thoughts on your pick CREG? still in? where do u see it goin?

Superman said...

CREG needs some news...why move to nasdaq and remain silent? I am waiting for news of any sort........SKBI has some small time analyst out to get them.....he issued a short sell...same moron that issued a sell $11 split adjusted points ago...

mcx tips said...
This comment has been removed by the author.
mcx tips said...

i think NASDAQ Confirms Hack With Malware Into Portal that is main reason . I think but nor sure? What do you think?

Thank you,
Mcx Commodity Tips

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