June 09, 2010
– Comments (9)
That was great. Are you going to do that for all the places you visit?
Did they let you take pictures of the "books" too :).
Few visits of ours are as interesting as witnessing the massive slaughter of marine cephalopods.
This facility tour does not provide any information on whether CMFO is accurately representing itself in its SEC financial statements.
I have posted two articles on CMFO at chinesecompanyanalyst.com. In particular, the company's acquisition of Xianghe raises serious questions about whether this company is committing fraud. The claims that CMFO makes about Xianghe are unrealistic and not believable, and I believe that the acquisition was used for fraudulent purposes.
Tim, I respect you and your professionalism. And I am 100% certain that there is a seafood products business operating under the China Marine Food banner. But I am confident that the actual operating business is far smaller than its SEC financial statements say it is, and far less profitable. Your videoblog shows that facilities exist and that seafood snacks are made, both of which I fully agree with. They don't provide any evidence that the company makes $70mm of revenue or that it has been growing revenue at 40% a year for the past 5 years. I'm confident that neither is true, in light of the (i) Xianghe acquisition, (ii) the fact that historical SEC and SAIC financial statements do not match, (iii) common sense about the growth and return on capital that a seafood products company like CMFO should generate, (iv) its low quality auditor, and (v) independent discussions I've had with others who have visited its facilities.
You have come up with some interesting statements and I have a few questions. 1.) Have you visited the operations of CMFO in China? 2.) Have you had any discussions with the management team of CMFO, and if you have who were they and what was discussed? 3.) Could you reveal the identity of the people that you had an independent discussion with that have visited the facility and what was discussed? 4.) I visited your website and could not find your profile. Could you list your credentials?
Heh heh. Yeah, I bet that place smells funky as hell. I don't think a shower alone would get that fish stink out of your skin. Heh heh.
Cool video guys,
Apologies for the late reply. Also, I forgot to disclose that I am short CMFO in my above article.
1. I have not visited them. I've heard from others that the facilities exist, and that their products are easily identifiable in stores, but that the facilities don't indicate a company as large as CMFO's SEC filings indicate.
2. I have not. I've only asked the CFO about the SAIC filings and pasted his response to my questions in one of my articles.
3. I cannot, sorry about that.
4. You can just go ahead and assume that my credentials are nonexistent and that my reputation is nothing to rely on. Also, I am a professional investor. My allegations against CMFO, at this point, center on my article about the Xianghe acquisition: chinesecompanyanalyst.com/2010/06/04/cmfo-and-xianghe-one-fraud-acquiring-another/
I'd read through my article and the 8K from March 16, and come to your own independent conclusion on whether Xianghe's financials are falsified.
Disclosure: I am short CMFO
As a Global Gains member, I've more or less gone with the advice given to back the truck up and load up on CMFO.
I don't have the time or expertise to personally research the claims and article of "M. Chincompanalyst", but as it's out there and the stock is sinking (likely due to broader issues), I would appreciate the Fool's rebuttal to the this guy's claims.
Not that I'm an expert, but I would have expected to see a fully automated plant processing all the seafood....not all the manpower shown in the video!!?? Even if labor is cheap, it might not stay that way and then what?
@zevSchonberg: They've certainly minimized the need for electrical/mechanical maintenance crews, haven't they? I agree that more of this will be automated in the future as manpower gets more expensive. That's what happened in the US, right? Hell, it even happened at my current company (I work in steel)
Enjoyed the video! Feel free to post more, as I would appreciate any others you would post.
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