Lihua International Inc. (NASDAQ:LIWA)
The company manufactures copper replacement products for magnet and fine wire markets. It designs, manufactures, and distributes alternatives to pure copper magnet wire.
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They are fairly shielded from copper commodity prices, as their input and output costs are both linked to the commodity price (recycler). The highly profitable company has consistently grown the top and bottom line for 4 years and is trading for cash. As reluctant as I am to buy overseas companies, this one is too cheap to pass up and has a fantastic risk/reward profile. The independent audit and board members make this a winner in my book. Buy it, forget about it and wait for the market to realize $0.50 dollars are out there.
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Charts look like a bottom forming, and valuations are way below industry averages.
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Identified in a Muddy Waters Report as a possible China fraud stock.
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Beaten down by short attacks so much that it's barely trading above the amount of independently verified cash they have.
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One audit away from oblivion.
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Yes! We need alternatives to pure copper wire for motor systems and other magnetic systems. What a great way to make motors and other inductive systems less costly!
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more china fraud
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Insider buying recently by CEO.
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Low P/E with Movement Potential
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Oversold, once the fear of chinese stocks subsides it will bounce
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This is a tracking portfolio of all CAPS-ratable tickers in the Chinese RTO/SPAC space (i.e., companies that listed without filing an IPO).
Lihua International, Inc. went public via a reverse merger with a Form 10 shell in 2008. The company is based in China.
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LIWA is oversold with a forward P/E of 7 and strong growth expected moving forward. Just expanded into increasing capacity for copper wire production. Has actually begun buying back shares of the 15 million they intend to buy back this year. Has been dropping on very low volume and is likely a bounce play short term and longer term with a $20.00 price target a super buy at $8.50.
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LIWA has a strong balance sheet with increased revenues. It has been upgraded to a $20 value by this time next year. trading way under its potential value right now.
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china play, increased copper demand from chinese households switching from rural to urban and...increased demand for electronic devices which needs to be feeded by some current
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copper wire company that is growing in china another china success story
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On October 15, 2010 at 11:53 PM, FleaBagger (99.09) wrote:
Lihua Int'l (LIWA) is an undervalued China play, a bimetallic and copper wire maker in the world's fastest growing market for bimetallic and copper wire. UltraLong has laid out in more detail and superior writing the case for China's overall stock market being undervalued. He mentioned LIWA in passing, along with some breathtaking numbers, and I looked into it. Unlike a disturbing number of Chinese stocks, LIWA's reported cash flow is comparable to its reported earnings, which are more than 1/10 its market cap, and almost 1/6 its EV. (Yes, its market cap is higher than its EV, because it has a crap tonne of cash on its balance sheet.)
So what? With negligible debt, a history of >40% earnings growth and >50% revenue growth, such a valuation is ridiculous, unless you just don't trust Chinese people. It's possible that all Chinese bookkeepers are lying. But that seems less likely in the case of Lihua, who isn't channel stuffing to any significant degree, than in the case of your typical fly-by-night Chinese stock. (Channel stuffing is when a company reports increases in sales and earnings when they take orders and record them as sales/earnings before getting paid, and instead of having real money, they just put the IOU on their books, calling it "Accounts Receivable," and act like it has value. I found a lot of it when I researched "fast-growing" Chinese stocks.)
Another good sign is how closely the free cash flow, subtracting out cash from stock sales, matches reported earnings pretty closely. They make cash, they report it as earnings. That's pretty much the way it's supposed to go. Throw in the 45-50% growth and PEV (price to enterprise value) of about 6.5, and you have what I believe to be an All Star stock.
Chris Graley, Good call on FRMSF.PK, and on leaving it open. You don't get to compound your gains in CAPS unless you leave your pick open.
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Profile
Lihua International, Inc.
Five Stars
Houxiang Town
Danyang,
China - Map
Phone: 86 511 8631 7399
Fax: 86 511 8631 2040
Website: www.lihuaintl.com
Details
Index Membership: N/A
Sector: Basic Materials
Industry: Copper
Full Time Employees: 308
Business Summary
Lihua International, Inc., through its subsidiaries, manufactures and sells bimetallic composite conductor cable and wire products, and refined copper products in the People?s Republic of China. It develops, designs, manufactures, markets, and distributes alternatives to pure copper wire, which include copper-clad aluminum wire and recycled scrap copper wire. The company offers its products in various diameters ranging from 0.03 mm to 0.18 mm. It produces and distributes copper-clad aluminum wire in various forms, including fine wire to smaller wire manufacturers for further processing; magnetic wire, which is used for electrical conductivity; and tin plated wire for the transmission of audio and visual signals. The company?s copper rod based wire products include cable products used for telephone drop wire and conductors; electric utilities; transmission lines, grid wire, fence, and structured grounds; industrial drop wire, magnet wire, battery cables, and automotive wiring harnesses; and radio frequency shielding, as well as magnet wire products used in electronic motors, transformers, water pumps, automobile meters, energy, industrial, commercial, and residential industries. Lihua International sells its products directly to manufacturers or through distributors in the wire and cable industries, as well as to manufacturers in the consumer electronics, white goods, automotive, utility, telecommunications, and specialty cable industries. The company is based in Danyang City, the People?s Republic of China.
***All above information from YAHOO FINANCE***
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