Engaged in research, development, manufacture and distribution of humic acid organic liquid compound fertilizer in 27 provinces in China. It has a multi-tiered line of 119 fertilizer products.
BATS data provided in real-time. NYSE, NASDAQ and AMEX data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates and Analyst Ratings provided by Zacks.
SEC Filings and Insider Transactions provided by Edgar Online.
Powered and implemented by Interactive Data Managed Solutions. Terms & Conditions
RSS Headlines
Fool UK
Recs
I used to like CGA and held it for a while making a nice profit, but after re-reading Graham, I began to dislike on four accords:
1. Looking at their SEC filings, the future intentions to give away 2+ million in shares, with a vote coming up soon with regard to compensation. There may be even more share give-a-ways in the future.
2. Private placement (there have been two this year) are supposed to be offered to current shareholders first. Yes, companies still do this. In Singapore, Genting did this. But with CGA the "offer" goes to some private party elsewhere.
3. Why do they keep needing the private placements? In their last one it stated for "working capital purposes". What exactly is this? The cash flow is questionable to me. I thought they had sufficient cash at this point.
4. What is up with the company Discovery Technologies? I believe this is the company that helped launch CGA into the AMEX. I can barely find any information on them.
These are my thoughts and my views. This is what I believe to know as true, and the above may not be 100% accurate so do your own research. It is not easy going against the herd on this one, but my heart tells me too. I feel that CGA is NOT concerned with shareholder value, and if I am right the stock will tank. Sorry TMF because I know you like them too.
If these funds raised through private placements are used to open their own stores and not borrowing money and going into debt to expand their business why wouldn't this practice just increase shareholder value in the end?
I would have preferred long term debt issuance. I don't care how it is done, but when a company issues more shares out, your piece of the pie gets smaller. Many times, once companies take that step of issuing shares, they never get bought back during good times but instead more excuses are used to issue even more for growth's sake. If the insiders can "print" money by doing this, as long as the capital (possibly suckers) keeps flowing in, you should be safe. If the music ever stops though, there will be a heavy price to pay.
Why would a shareholder prefer to lose more and more control from share placements?
If this kept happening without significant return on that investment it will eventually show up on price to earnings wouldn't it?
If the company buys assets that grow the company bigger and more profitable even though there are more shareholders getting a piece of the pie your piece of the pie should be of greater value. Shouldn't this be reflected in the earnings per share figures every year?
Good call Technodweeb.