September 2010
September 30, 2010 –
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RELATED TICKERS: TXIC
Tongxin International (TXIC) designs engineered vehicle body structures ("EVBS"), designs and fabricates the dies used in the manufacturing process, and stamps panels, assembles and completely finishes EVBS. EVBS consists of exterior body panels including doors, floor pans, hoods, side panels and fenders. Tongxin maintains a network of 130 customers throughout 20 provinces in China. Headquartered in Changsha, Tongxin also maintains regional manufacturing in Dali, Ziyang and Zhucheng. [more]
September 28, 2010 –
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RELATED TICKERS: FE
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September 24, 2010 –
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RELATED TICKERS: PVA
Penn Virginia Corporation (PVA) is an independent natural gas and oil company focused on the exploration, acquisition, development and production of reserves in onshore regions of the U.S., including East Texas, the Mid-Continent region, the Appalachian Basin and Mississippi. PVA completed the transition to a “pure play” exploration and production company in June 2010, when the company sold its remaining interests in Penn Virginia GP Holdings (PVG), which is the general partner of Penn Virginia Resource Partners (PVR) and have now raised over $825 million of capital since May 2009 through the issuances of debt and equity securities as well as the sales of non-coreAssets like PVG. The capital is now being deployed to accelerate growth in the near-term production in the oil and liquids rich Granite Wash and horizontal Cotton Valley plays. They are also adding acreage to their core holdings in the Granite Wash and Marcellus Shale plays. For the second half of 2010, the production guidance range of 26.2 to 29.2 Bcfe, or 142.3 to 158.6 MMcfe per day, is 24 to 38% higher than the 20.8 Bcfe, or 115.0 MMcfe per day, of first half reported production. Increased oil and gas capital expenditures guidance will now be in the range of $450 to $490 million from a range of $375 to $425 million of previous guidance. This includes $325 to $350 million for drilling and completion activity, and $100 to $110 million for land acquisition. The drilling capital expenditures include approximately 65% for the oil and liquids rich Granite Wash and horizontal Cotton Valley; and approximately 20% for drilling in the Haynesville and Marcellus Shales. The land acquisition expenditures include approximately 60% for the Marcellus Shale and approximately 25% for the Granite Wash. Penn Virginia Corporation was trading in the $ 25 dollar range during the first half of 2010, but a recent pullback has meant that I can now buy shares in this well-managed company for significantly less then book value. A purchase price of around $ 15.50 per share gives PVA a current market value of approximately $ 700 million on stockholder equity/book value of $ 1.035 million as of June 30, 2010. With a P/B of 0.68, a P/S of 0.87, cash and cash equivalents of $ 327 million as of June 30th and a well-conceived and executed growth strategy, I’m very comfortable with my margin of safety investing in this company at present levels. As always, don’t forget to do your own DD before making investment decisions. BR, Retracement [more]
September 16, 2010 –
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RELATED TICKERS: MIL
, KHDHF
Terra Nova Royalty Corp (TTT) is an iron ore royalty company that derives its income through indirect ownership in the Wabash Mine in Labrador, Canada. As typical of a Michael Smith company, determining TTT’s value, and hence a fair market price, is an intriguing exercise. Management is currently in the process of transforming TTT into a viable investor and financier in iron ore projects. TTT is a large holder of shares in its former parent company, German-based cement manufacturing equipment specialists KHD Humboldt Wedag International (KHDHF), and is in the process of distributing the majority of its KHDHF holdings to shareholders, [more]
September 13, 2010 –
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RELATED TICKERS: APWR
A-Power Energy Generation Systems Ltd. (APWR) is a leading provider of distributed power generation systems in China and internationally and a fast-growing manufacturer of wind turbines after obtaining the right from Furhlander to manufacture, operate, service and sell 2.7 MW wind turbines, alongside 2.0 MW turbines, using F2500 technology throughout China. International projects have exceeded 30% of total revenues for the first time this quarter after significant wins in Vietnam, Pakistan and Thailand. Wind turbines sales are planned to start contributing to revenue in the second half of the year after permits for the 2.7 MW turbines are finalised and delivery of the first 2.0 MW and 2.7 MW turbines are scheduled. Total stockholders' equity rose to $357,3 million at June 30, 2010 from $252,6 million at December 31, 2009. With 46,5 million total shares outstanding at the end of Q2 2010, APWR currently trades at little over 0,8 times book value, 0,7 times sales, a P/E of 6,5 and a forward P/E of 4.8. Cash and cash equivalents and restricted cash totalled $182,7 at the end of Q2 2010, where market value currently sits at just over 300 million. APWR signed cooperative agreements with The United Steelworkers (USW) and Shenyang Power Group in early August regarding planning and development of projects including a wind turbine assembly plant in Nevada for the expected delivery of wind turbines to the 615MW wind farm under development in Texas. Revenue for Q2 2010 increased 30,1% to $74,8 million from $57,5 million for Q2 ‘09. Gross profit increased 51,1% to $11,6 million from $7,7 million a year earlier. APWR maintained guidance for its full year 2010 outlook of revenues of $500 million and net income of $60 million, based upon on-going projects and revenues from the expected sale of wind turbines to be generated during the remainder of 2010. Average analyst price target stands at $ 13,50. As always, don’t forget to do your own DD before making investment decisions. BR, Retracement [more]
September 10, 2010 –
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RELATED TICKERS: NLY
When looking at Mortgage REIT's to compliment dividend income in your portfolio one is wise to look at track records and management just as vigourously as current dividend rates. Annaly Capital Management (NLY) has been active since 1997, becoming the largest and most well-established mortgage REIT listed on the NYSE. [more]
September 09, 2010 –
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RELATED TICKERS: CNEP
For your information:
China North East Petroleum (NEP) has resumed trading today on AMEX after announcing financial results for the financial quarters Q1 and Q2 2010 as well as FY 2009. As a result, NEP is now current with its disclosure obligations with the Securities and Exchange Commission.
BR,
Retracement
September 09, 2010 –
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RELATED TICKERS: HAWKQ
Regarding Seahawk Drilling Inc. (HAWK) I could mention a number of very meaningful valuation metrics on this company as normal, but in this instance I almost feel I don’t even need to. For me the business case to invest in this company, at this price, at this time, is pretty simple really. If someone offers me a deal to buy something for less than 25 cents on the dollar value wise on a company which has the second-largest fleet of jack-up rigs in the Gulf of Mexico and DD shows a big catalyst behind current depressed earnings and resulting valuation being a very rare event like the Macondo spill, it warrants a further look. HAWK will face a bumpy road ahead in its efforts to diversify the business and to try to insulate the company from regulatory uncertainties in the US Gulf, but I feel that my ‘margin of safety’ on this stock is about as good as it gets buying at current market prices. As always, don’t forget to do your own DD before making investment decisions. BR, Retracement [more]
September 09, 2010 –
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RELATED TICKERS: DGIT
DG FastChannel Inc. It’s not often that you look at a 3M stock chart after reading some recommendations and can still be genuinely amazed. But DG FastChannel (DGIT) has managed to produce one lately due to the fact that previous investors have apparently been stampeding out the door so fast they seemingly forgot they were selling stocks in a fast growing, profitable company. Mind you, a $40+ valuation was perhaps a bit rich for everybody’s taste, but DGIT’s current valuation has piqued my interest. During the first half of 2010 DGIT was able to substantially grow its revenue and asset base, while at the same time eliminating long term debt and thereby reducing its liabilities by 109M to 22M. With current assets of 505.4M they were able to grow stockholder equity from 347,2M to 483,4M in 6 months time. After such a stellar Q2 and H1 2010 investors basically decided that the company would be unable to keep up this performance. Management sold some shares around the same time at $40+ (wouldn’t you?) and investors just dumped the stock until now, for which I hereby thank them. I now have the possibility to purchase shares in a well-managed company outperforming the market for less than $16, which amounts to 0.9 times book and a P/E of 10. Management has recently provided Q3 and full year guidance. For Q3 DGIT expects revenues of $51-53 million and EBITDA of $23-24 million. For the full year DGIT expects revenues of approximately $230 to $234 million and EBITDA of approximately $105 to $107 million. It boils down to approximately 22% year-over-year revenue growth and approximately 36% EBITDA growth. Not to shabby and hopefully enough said! As always, don’t forget to do your own DD before making investment decisions. BR, Retracement [more]
September 08, 2010 –
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RELATED TICKERS: VOD
Vodafone Group PLC (VOD) is the largest telecom company in the world by revenue, but despite being one of the most profitable still enjoys some pretty impressive metrics. VOD is one of the few telecoms still trading below book value with at current P/B of merely 0.9 times book, which is currently $ 26,03, and a P/S of 1.87, a P/E of 9.5 and a PEG ratio of 2.55. The company sports a dividend rate of 7% and has laid out its plans to increase this substantially for 2011 and 2012 [more]
September 07, 2010 –
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RELATED TICKERS: FMR.DL
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September 03, 2010 –
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RELATED TICKERS: CDCSY
, CHINA
CDC Corporation (CHIND) is the parent company of CDC Software (CDCS), owning a 85% majority stake. CHIND is actually valued lower then its daughter CDC Software at present. They are also majority owner of CDC Global Services and China.com. Book value of CHIND as of 30/06/2010 is $ 7.45. CDCS has revised its guidance UP twice in the last half year and is recording record profits, while also merely listed at 0,6 times book value. Fellow value investor Ultralong gave CDCS a buy recommendation when CDCS was at $ 10, it's now near its 52 week low, trading $ 5,60 yesterday at the close. Figure that! CDC Corporation has completed a 3:1 reverse split on August 23rd, with a symbol change from CHINA to CHIND, reducing the number of outstanding shares from 105 million to 35 million and are trying to do everything possible to release shareholder value and get the share price of both CHIND and daughter CDCS to reflect the company's true value to a least some reasonable extend. They eliminated the majority of the unsecured notes in the last year to finally be able to start paying dividends this year, if everything goes as planned. They reached agreement with 11 note holders, one is still trying to hold out, which they are dealing with at present through the NY courts.In my humble opinion, this company is a pure long-term value play at present, but as always please do your own DD first before making investment decisions. Retracement [more]
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