sisula (24.95)

CMFO is gaining momentum

November 02, 2010 – Comments (2) | RELATED TICKERS: CMFO

It has been a couple of months since mysterious short-seller known as Chinese Company Analyst started his FUD campaign against China Marine Food Group Limited (CMFO). He implied that

— CMFO is a fraud because their SAIC and SEC fillings do not match (a common pain for many Chinese companies)

— CMFO's acquisition of Xianghe (later Hi-Power Beverage) was "dubious"

— CMFO's auditor played active role in a fraud

Well written and suggestive articles (missing word "true" in the list?) gained popularity and it took few weeks for the stock to lose more than 50%. At that time the stock was trading under $4 and almost touched $3. What happened later? Well, a complete turnaround in the stock performance backed by exemplary company response:

— The company clarified Hi-Power Beverage acquisition

— CEO stepped in and bought some shares to declare his confidence in company prospects

— The company reported record quarter results topping analysts' estimates on both revenues and per share profit (EPS by 44%)

— The company promised to provide monthly updates on Hi-Power Beverage sales

— The company organized Investor Day to present its manufacturing facility

— And today, the company introduced new independent accountant which is now respected BDO China

All of the points above add to company credibility. No wonder CMFO closed at $6.50 today. That is 12% gain from previous close and more than 100% gain from summer low of $3.07.

Now, when the dust has settled and company can focus on its growth, it is time for the market to catch up. I can't see any issue justifying absurdly low forward PE of 6. That's why I believe there is still much more CMFO can offer to investors, so don't hesitate and get some information about company. I think I have just provided enough links for everyone. :-)

Disclosure: long CMFO