Wednesday, April 9, 2008
Updates
1) Jinpan - JST.
Ever since coming out with monster earnings few weeks ago, the stock has made a massive move upwards. $30-$31, as described earlier, was the wall for some time. It has tried this level many times and retreated every single time. This time the breakout happened on very nice volume. The stock made an impressive run all the way to $34's. It has obviously given up some for profit taking. How can you blame profit takers from $22's just few weeks ago. These low float / low volume chinese stocks are jumping back and forth on low volume and often depend on the mkt conditions. So, short term of these kinds of stocks are hard to predict, but as far as long term is concerned, JST has continued to deliver great results quarter after quarter. Their latest outlook was for $2.64 eps in 2008, and they always provide conservative numbers (as I've noticed in the past 2 years). Very impressive numbers. Again, short term is tough to predict (it may even slip to < $30), but within a year this stock will probably trade in $40's.
2) Harbin Electric - HRBN
The bullish MACD crossover happened in the low 13's and then the stock exploded. Few days ago they provided more details on their acquisition. It looked like the mkt liked the deal. That coupled with bullish chart brought the stock all the way to its resistance and near 200 dma almost to mid $17's. Profit taking was obvious at that point. Resistance is big, plus many people wanted to get out as they did not feel safe after buying too high. Stock has retreated back to $14's now. The chart is still in uptrend, and I believe it should start going back up to the resistance point. Next event that I'll be waiting for is more financial details on the deal. It seems that they will have to issue some shares to pay for the acquisition, which looks like a bad deal at the first look (dillutive). But, EPS is accretive, which means the contribution to the bottom line will be immediate.
Dutton Associates issued a new research note on HRBN today. They've been very accurate with this company in the past 2 years. Look at their update here -> http://www.duttonassociates.com/research/HRBN/index.html.
Also, Yahoo increased earnings estimates today, because it seems that another analyst, following HRBN, increased his estimates - Global Hunter Securities.
Just like with JST (Jinpan), long term of this company is extremely bright and I don't care much about short term movements. Near $3 eps in 2009 would definitely be an eye opener next year.
3) China North East Petroleum (CNEH.OB) - What can I say? Stock has been on a monster run ever since hitting the lows in $1.60's. Few days ago it broke a huge technical resistance at $2.60 and then briefly jumped to over $3.00. It's in consolidating mode right now and may retrace to $2.60 level. If the support holds (and I believe it will), the upward move will continue towards 1Q earnings next month. Big things are ahead for this company.
4) Jaguar Acquisition (JGAC.OB) - Don't have much to say, other than the merger has been approved and look at the action in warrants. What this means is get ready for some action in AAACW.OB:
5) Asia Automotive Acquisition (AAAC.OB / AAACW.OB) - The move in warrants today came due to success in JGAC merger. That merger makes AAAC.OB merger look almost guaranteed. (although I don't really want to use that word). Warrants are lagging, but only because possible merger is still 1 week away. I'm not looking for warrants to just catch up to common. I'm looking for much higher numbers here, once the stock begins trading on Nasdaq, which should occur immediately after acquisition (IF THE MERGER GOES THROUGH, AND PENDING NASDAQ APPROVAL). I really hope come next Friday, we'll have TXIC and TXICW on our hands (these are proposed Nasdaq tickers).
Good luck and stay safe in this market!
Please leave comments on any of these stocks or markets in general.
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