3SOF

I wrote the following analysis on the Analysis on Demand thread and just need to buy UTVG.OB today:

Quote from: Jim897 on September 21, 2007, 08:40:04 AM
David, here's another stock that I'd like you to analyze, UTVG.  It is a great growth story.  It is a leading air travel and air cargo transportation agency in Southern China.  The company (or analysts - I'm not sure which) is estimating .24 eps for 2007 and analysts are estimating .39 for 2008.  It currently trades at 3.45 and has been very bullish lately.

Yeah, I know that stock. I've covered it when it was trading at $0.9 and I was very positive on it (http://www.3stocksonfire.org/trading/index.php?topic=8906.msg87936#msg87936), but failed to buy it :-[ (it was very thinly traded back then - and it still is, but that's not a relevant factor).

1. Profile

Universal Travel Group (UTVG.OB) provides domestic and international airline ticketing services and cargo transportation agency services primarily in the People's Republic of China. It also offers hotel reservations, packaged tours, and air delivering services. In addition, Universal Travel Group owns an aviation network, cnutg.com, which provides an air tickets sales network. The company is based in Los Angeles, California.

2. UTVG's stock market history

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41467;image)

Man, UTVG.OB is up six fold since my initial analysis (http://www.3stocksonfire.org/trading/index.php?topic=8906.msg87936#msg87936), what a miss :-X

Let's see what we have now. The current market cap is 34,934,285*$5.54 = $193.5 M.

I see the company made several acquisitions recently:

• Universal Travel Group Announces Closing of the Acquisition of Xi'an Golden Net Travel Serve Service Co., Ltd. (http://biz.yahoo.com/prnews/070806/nem043.html?.v=16)
PR Newswire (Mon, Aug 6)

«The price for the acquisition was $1,800,000, of which $1,542,000 was paid in cash. The remaining $258,000 was satisfied by the issuance of 151,765 shares of newly issued Universal Travel Common Stock.»

«The company had revenue of $5,500,000 and net income of $490,000 for 2006, and expects an 80% increase in revenue and net income for 2007.»

3.7 P/E ratio :)

• Universal Travel Group Announces Closing of the Acquisition of Shanghai Lanbao Travel Service Co., Ltd. (http://biz.yahoo.com/prnews/070808/new040.html?.v=13)
PR Newswire (Wed, Aug 8)

«... announced today that it has completed the acquisition of Shanghai Lanbao Travel Service Co., Ltd. for US $3.920 million, of which $2.828 million was paid in cash and the remaining $1.092 million was satisfied by the issuance of 600,000 shares of newly issued Universal Travel Common Stock.»

«The company reported US $1.1 million in revenue and US $730,000 in net income for 2006.»

Net profit margin of 66% :o Earnings multiple paid was 5.4.

«"Due to the completion of these two acquisitions, we revised our previously announced guidance. We now expect to report 2007 revenue in the range of approximately $35 million to $36 million, up 250% to 260% from $10.01 million reported in fiscal year 2006. Net income for the 2007 fiscal year is expected to be in the range of $8.2 million to $8.5 million, or $0.23 to $0.24 earnings per share, an increase of 222% to 233% from $2.55 million reported in fiscal year 2006."»

WOW!

I'm dizzy, I really am, with this company's potential and my huge miss when it was trading at $0.9.

• Universal Travel Group Newly-acquired Subsidiary Xi'an Golden Net Reports $4.4M Revenue for the First Six Months of FY '07 (http://biz.yahoo.com/prnews/070918/netu020a.html?.v=1)
PR Newswire (Tue, Sep 18)

• Universal Travel Signs Agreement to Acquire Foshan Overseas International Travel Service Co. Ltd. (http://biz.yahoo.com/prnews/070921/nef037.html?.v=17)
PR Newswire (Fri, Sep 21)

«The price for the acquisition will be $6.5 million, of which $3.15 million will be paid in cash. The remaining $3,346,500 will be satisfied by the issuance of 1,122,986 shares of Universal Travel stock.»

«Foshan reported unaudited sales revenues of $11.9 million in FY 2006 with a net income of $930,000.»

So, the P/E of this acquisition was 7. Still cheap.

• Universal Travel Group Signs Agreement to Acquire 90% of Tianjin Golden Dragon International Travel Service Company (http://biz.yahoo.com/prnews/071017/new140.html?.v=5)
PR Newswire (Wed, Oct 17)

«The purchase price for this majority stake will be $7,889,000, of which $3,600,000 will be paid in cash and $4,289,000 will be satisfied by the issuance of 1,053,800 shares of Universal Travel stock.»

(the share part used to pay for the acquisitions is increasing).

«The company reported unaudited sales revenue of $16.17 million and net income of $1.13 million in FY'06.»

Again, P/E paid was 7.

«Jiang continued, "We estimate that the packaged tours segment will contribute about a substantial amount of Universal Travel Group's revenue. At present, China's tourism market demand is $150 billion, with a projected increase of 10% in the next five years. This represents broad development prospects for our company and a wonderful opportunity for further growth. In addition, we believe that the 2008 Beijing Olympics will further boost the overall business performance of UTVG."»

3. Valuation Model

I've derived some rough estimates, which are my best guess into this company's prospects:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41468;image)

According to my estimates, UTVG still looks extremely attractive, even after a 6 fold advance in less than a year.

4. Conclusion

I've never seen a company growing so rapidly, through organic growth and acquisitions, as UTVG. The way I see it, management has been buying fast growing and very profitable companies for as low as 7 times annual earnings or even less. US stock market investors are willing to pay at least triple for the same companies.

It is somewhat annoying to buy a stock 500% plus higher than I could have bought in the beginning of the year, but given the fundamental information there's nothing else I can do but buy UTVG.OB as soon as possible.

Trading Plan:

Buy UTVG.OB, 6.66% of capital as usual.

Lovely, another one that IB doesn't allow....let me see if I complain as the last time they will deliver it.

Best luck for all that can.

Quote from: Dracull on October 30, 2007, 11:00:35 AM
Lovely, another one that IB doesn't allow....let me see if I complain as the last time they will deliver it.

Best luck for all that can.

"Unfortunately you can not trade this stock at IB. The reason is due to clearing constraints. IB primarily clears all of our transactions electronically. Since this security is not DTC eligible, i.e. electronically cleared, and physical stock certificates are required to be held in this case we do not allow our traders to hold positions in this security. IB is not set up for this type of physical clearing and holding of physical stock certificates. We apologize for any inconvenience that this may have caused you. "

Didn't work...I will have to skip this one.

Dracull, why don't you open an account with, say TDAmeritrade, and use it for a few positions that you can't open otherwise? I have had only limited problems with them, of no siginificance.

I'm considering doing so at the end of the month, Berloga. Pitty, as the comissions on IB are really cheap, but I can't afford to be left out of the race on another stock. I think that I still have my old Datek account open, I will check it out.

I too use IB and opened an account at TDAmeritrade to handle these situations.  It is very frustrating to say the least.  I love the $1 and $2 trades but they seem to have a lot of problems finding shares to short and allowing purchases of OTC stocks.  At least IB started allowing CHME (Probably thanks to Dracull)!

I dont get the heading buy at 7 sell at 21?

Stocky,

I believe David is referring to the P/E...

Quote from: David Randolph on October 30, 2007, 08:37:33 AM


4. Conclusion

I've never seen a company growing so rapidly, through organic growth and acquisitions, as UTVG. The way I see it, management has been buying fast growing and very profitable companies for as low as 7 times annual earnings or even less. US stock market investors are willing to pay at least triple [/font] for the same companies.

It is somewhat annoying to buy a stock 500% plus higher than I could have bought in the beginning of the year, but given the fundamental information there's nothing else I can do but buy UTVG.OB as soon as possible.

Trading Plan:

Buy UTVG.OB, 6.66% of capital as usual.

Thnx Basanlas

QuoteStocky,

I believe David is referring to the P/E...

That's it basanlas, applaud :)

UTVG's business model has been buying profitable companies for 7 times earnings (or less) in China, while US stock market investors value them at least triple that earnings multiple.

There's one analyst covering the stock and he has the following estimates:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41497;image)

However, his projections were made before most announced acquisitions, so I need to try to make my own 2008 projection for revenue and EPS given the current public information and fundamental trends.

So let me consider 2006 as the starting point:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41498;image)

2006 revenue was $10 M and the # of shares outstanding was 34,220,000. Net Income was $2.56 M, so net profit margin was 25.6%. The balance sheet had $7.46 M in current assets.

Q1 2007 results, still without any new acquisition, were as following:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41502;image)

Then we've had, in April 10, 2007, UTVG acquired Shenzhen Speedy Dragon, for about $4 M, in cash and shares. New shares coming from this acquisition were 714,285.

«SSD is engaged in the business of air freight forwarding. The company is a nationwide cargo logistics company providing commercial, point-to-point parcel and container transportation
services. It also operates as an international and domestic freight forwarding agency for Chinese civil aviation companies and provides railway and express delivery services.

SSD has a fleet of more than 200 franchised vehicles and manages warehouses totaling 40,000 square meters (approximately 430,556 square feet), which it uses to stage, transfer, and store packages in transit. The annual volume of the company's air cargo transportation accounted for approximately 30% of the total air cargo market in Shenzhen, China.»

From reading SEC files I see that SSD had no operations in 2006. However, in the Q2 2007 earnings report I get this:

«Universal Travel reported record revenue of $7.02 million for the second quarter, an increase of approximately 657% from $928,000 for the comparable quarter in fiscal year 2006. The increase in revenue is attributable to the acquisition of Speedy Dragon and an increase in the customer base of the pre- existing business from 1.5 million members to approximately 1.7 million members at the end of the quarter. For the quarter, Yu Zhi Lu reported $4 million in revenue, or approximately 57% of overall sales for the company. Speedy Dragon contributed the other $3.02 million in sales, 43% of the company's revenue. During the first quarter YZL reported $4.3 million in revenue, or approximately 61% of overall sales for the company and Speedy Dragon contributed the other $2.68 million, or 39% of the company's revenue.»

So, Speedy Dragon revenue growth from Q1 2007 to Q2 2007 was 12.7%. This gives me about 50% in annualized terms (more, but lets keep it this way, this is a rough estimate). This tells me Speedy Dragon revenue will be about $13 M in 2007 and I figure, about $20 M in 2008.

UTVG's revenue by itself (or stand alone Yu Zhi Lu) , were $4.3 M in Q1 2007 and $4 M in Q2 2007, so revenue declined about 7% sequentially. I'm going to estimate that Yu Zhi Lu revenues will stay flat around $4 M a quarter in 2007 and 2008.

So, considering just Yu Zhi Lu and Speedy Dragon, I see $36 M in 2008 revenue.

Moving on to the next acquisition:

«LOS ANGELES and SHENZHEN, China, April 23 -- Universal Travel Group (OTC
Bulletin Board: UTVG - News), a leading air travel service provider in Southern
China, announced today its intention to acquire Shanghai Lanbao Travel Service
Co., Ltd.»

«The company reported US $4.5 million in revenue and US $380,000 in net income for
2006.»

«The company's centralized Internet and mobile phone booking systems are open to
more than 200,000 hotels, 5,000 booking centers and more than 8,000 travel
agencies and tourist companies throughout China, providing them with real-time
data transfer and information.

By the end of 2008 the company expects to become one of the top three providers
in the hotel booking industry in China. The company's goal is to become a global
provider of hotel, aviation and tourism information by 2012.»

In September 19 I get this in a press release:

«Shanghai Lanbao, had unaudited revenues of $1.3 million and a net income of $770,707 for the first six months of 2007.»

Very fat net profit margin here, but small revenue number. I would say Shanghai Lanbao will have 2008 revenue of about $3.5 M.

UTVG's total 2008 revenue estimate rises to $39.5 M. Strangely I can't find a price for this acquisition, let's say the share count rises 1 million to 36 million.

Next acquisition:

«LOS ANGELES and SHENZHEN, China, Aug. 6 /PRNewswire-FirstCall/ -- Universal Travel Group (OTC Bulletin Board: UTVG), a leading air travel and air cargo transportation agency in Southern China, announced today that it has closed the acquisition of Xi'an Golden Net Travel Serve Service Co., Ltd. The price for the acquisition was $1,800,000, of which $1,542,000 was paid in cash. The remaining $258,000 was satisfied by the issuance of 151,765 shares of newly issued Universal Travel Common Stock.

Xi'an Golden Net Travel Serve Service Co., Ltd. was established in 2001. The company focuses on the domestic tourism market and provides air tickets, train tickets and other services. The company had revenue of $5,500,000 and net income of $490,000 for 2006, and expects an 80% increase in revenue and net income for 2007.»

I see about $15 M revenue coming from here in 2008, after about $10 M in 2007. Total 2008 revenue estimate stands at $54.5 M, share count is 36.2 million.

Next:

• Universal Travel Signs Agreement to Acquire Foshan Overseas International Travel Service Co. Ltd. (http://biz.yahoo.com/prnews/070921/nef037.html?.v=17)
PR Newswire (Fri, Sep 21)

I see $20 M more in revenues coming from this acquisition in 2008 and 1,122,986 new shares.

Total 2008 revenue estimate rises to $74.5 M and the share count to 37.5 million.

Another:

«LOS ANGELES and SHENZHEN, China, Oct. 17 /PRNewswire-FirstCall/ -- Universal Travel Group (OTC Bulletin Board: UTVG), which operates through its wholly owned subsidiary, Shenzhen Yu Zhi Lu Aviation Service Company Ltd. (YZL), a leading travel and cargo transportation agency in Southern China, announced today that it has entered into an agreement with the shareholders of Tianjin Golden Dragon International Travel Service Co., the largest travel agency in the city of Tianjin, China, whereby Universal Travel Group would acquire, in the aggregate, 90% of the outstanding capital stock of Tianjin Golden Dragon. The purchase price for this majority stake will be $7,889,000, of which $3,600,000 will be paid in cash and $4,289,000 will be satisfied by the issuance of 1,053,800 shares of Universal Travel stock.»

«The company reported unaudited sales revenue of $16.17 million and net income of $1.13 million in FY'06.»

I guess $20 M more in revenue and about 1.1 million more in shares and this gives me 2008 revenue of $94.5 M and 38.6 million shares.

Now, it is hard to know the net profit margin of all these businesses combined. I know I have 25% in my valuation model, but I'm going to lower this to 20%. And this way I get $18.9 M in net income in 2008, or $0.49 EPS.

With the stock trading at $5.6, the forward EPS multiple appears to be 11.4. Given investors appetite for Chinese stocks at this moment and this company's growth, I would say the earnings multiple should be at least 25, which would translate into a $12.28 stock in late 2008, not counting with more acquisitions.

I'll keep holding UTVG.OB for the long term.

being that this is pink sheet...do you think the accounting numbers are accurate for the company?

I thought pink sheets aren't as accountable as those listed on the exchanges...

Quote from: kpunarc on October 31, 2007, 09:17:22 AM
being that this is pink sheet...do you think the accounting numbers are accurate for the company?

I thought pink sheets aren't as accountable as those listed on the exchanges...

It is OTCBB, not PK.

Every time I buy a new stock, it goes down over the short term. This "indicator" is so reliable they should use it in short term technical analysis ;D

Maybe UTVG.OB will even go down to close the gap at $4.58. But investors selling at that point should know they're selling a company trading below 10 times earnings, while it grows EPS by 100% plus a year.

I see UTVG.OB at $12 or more in 12 months time and nothing will shake me out of this conviction. At least nothing coming from the technical side.

I'll keep holding UTVG.OB for the long term.

UTVG update:
1)
Seeking Alpha:
Universal Travel Group: Benefitting From Chinese Expansion
posted on: November 01, 2007 | about stocks: UTVG.OB   

The size of China's travel market is relatively small compared to that of the United States—$134 billion and $1.3 trillion, respectively. Even so, China's swelling middle class and an unprecedented rise in disposable income have created one of the fastest growing tourism sectors in the world. In fact, the country is expected to eclipse Germany and become the third largest travel market by 2011, according to e-Marketer. And the World Travel and Tourism Council predicts that by 2010, China will receive more than 64 million tourists annually. The numbers and outlook justify the bullish sentiment among industry analysts, who forecast companies in the sector will grow 40% to 45% through 2008.

One player keyed into the China travel boom is Universal Travel Group (UTVG.OB), a small cap that provides travel services that include airline tickets, hotel and restaurant reservations, packaged tours and air cargo services. Based in Shenzhen, the nation's transportation hub and one of the world's fastest growing cities, Universal Travel Group serves domestic and international business and leisure customers traveling to, from and within mainland China, as well as the hot tourist markets of Hong Kong, Macao and Taiwan. Universal Travel has eight company owned reservation office locations, 103 franchised locations and a high-volume call center facility (which has reported a 30% jump in phone traffic each month since the end of last year).

The Company has forged lucrative partnerships with Chinese domestic and world-class international carriers, including British Airways, Air France, Cathay Pacific, Iberia, Virgin Atlantic, Turkish Airlines, Swissair and others. Through its November 2006 alliance with TravelSky, a leading provider of IT solutions for China's air travel and tourism industries, the company has secured access to more than 3,000 domestic and international hotel booking services. A wave of acquisitions, including the recent purchases of Tianjin Golden Dragon International Travel and Foshan Overseas International Travel Service Co. Ltd., providers of domestic and international packaged tours, will provide a windfall of customers and increase cross-selling opportunities for the company.

Of course with the 2008 Olympics coming to China will also benefit the expansion of travel needs. Another interesting aspect is that it has coverage from at least one legitimate US-based equity research company: Maxim Group.When I say legitimate, I mean that these guys are not "for-hire" research company where you pay a certain amount to the "stock promoter", they do a mass-mailing and then parties never speak to each other again.
Now, more on the financials and prospects for Universal Travel Group: UTVG reported a strong quarter in August 2007, in which they beat the street estimates by 25% resulting in .05 eps for the quarter. The growth story is just starting as UTVG expects to report earnings of .24 for 2007 which entails 200% earnings from 2006.

For 2008 analysts are expecting UTVG to report .39eps giving them a low forward 08? PE of just 8.56. We should expect the stock price to continue north to catch up with its future valuation as time passes. Theoretically for UTVG to be fairly valued in its industry we should expect price to proceed skyward near $14/share as we head into 2008. This is calculated by multiplying the expected annual 2008 eps of .39 x the industry average PE of 36x earnings which gives us an estimated share price of $14.04.

Or if you calculate the 2008 share price target by giving UTVG the same forward PE as CTRP (which is 53), you get a price target of $20.67 (.39 eps X 53 p/e). So one can use a "median" price target between the two and you come up with $17.36 stock price. The estimated above targets would give stockholders a possible 220% to 400% return from today's stock levels. Another future catalyst for a rise in the stock is that (unconfirmed) Universal Travel Group is now in the application process to move from the OTCBB to an AMEX listing. This of course will give the stock more liquidity and exposure to institutional interest. For those who always like to examine a stock from a technical side, UTVG is building on a bullish breakout.

The stock has been experiencing increasing daily trading volume during the last four months and the stock is trading above the 10, 20, 30, 50 and 200-day moving averages. The Point and Figure chart (P&F) is showing a short-term price objective of $11.

UTVG currently has a total of 34.9 million outstanding. The float is only about 12 million shares.Although the stock has risen since July 2007 from $2 to now around $5.50, this company is still under the radar of many investors and has a lot of growth left to achieve the calculated $17.36 price target.

With the great expansion of China happening in front of our eyes, it should provide the opportunity for Universal Travel Group's to achieve their goal to become one of China's leading travel services provider in the aviation, cargo, hotel booking and tour packaging segments.

Maxim just recently raised their target from US $5 to $7 for UTVG:

Thanks for this research piece La-Onda :)

La-Onda also sent me interesting information over the e-mail, I'm sure he won't mind if I reproduce it here:

«Hi David,
I have asked a friend about UTVG, please check his answer:

Hi again,
UTVG. Be VERY careful here...I "know" them. Very crooked management. Couple yrs ago, they had dismissed board for fraud, they were delisted in the past, and had a few times huge pump/dump action...Stock was going up, and down like jo-jo, from 50 cents to 3-4 dollars..I am not sure if there is now any real change...
XX.

Unfortunately he didn't provide any link etc.
Could you please check the UTVG management at one of your next updates?
thanks in advance
Oliver»

Unfortunately I'm very short on time today (man, IMMR's conference call lasted 2 hours or so - and my kids are at home today, always pushing me around ...) but I'm going to investigate this deeply over the next few updates.

I read most of the 2nd quarter 10-Q filed with the SEC and understood UTVG was recently formed by a reverse merger:

«In June 2006, the Company shifted its business to the travel service industry in
China through the acquisition of Full Power Enterprises Global Limited ("FPEG")
a holding corporation formed under the laws of the British Virgin Island which
owned all of the capital stock of Shenzhen Yu Zhi Lu Aviation Service Company
Limited ("YZL"). The acquisition of FPEG was treated as an acquisition by the
accounting acquiree (YZL) accounted for as a recapitalization and as a reverse
merger by the legal acquirer for accounting purposes so the financial statements
included herein reflect the historical financial results of YZL.»

The only "history" we have in the 10-Q is the following:

«Universal Travel Group, Inc. was incorporated on January 28, 2004 under the laws
of the State of Nevada. Full Power Enterprise Global Limited - BVI was
incorporated under the laws of the British Virginia Islands. Shenzhen Yuzhilu
Aviation Service Co., Ltd was incorporated on March 9, 1998 under the laws of
the Peoples Republic of China (PRC). Shenzhen Speedy Dragon Enterprises Limited
was incorporated in August of 2002 under the laws of the Peoples Republic of
China (PRC). Full Power Enterprise Global Limited owns 100% of the Shenzhen
Yuzhilu Aviation Service Co., Ltd. Collectively the four corporations are
referred to herein as the Company.»

The company's Chairman  and CEO is a Chinese woman:

«Universal Travel Group Chairwoman and CEO Ms. Jiangping Jiang said, "Universal Travel had a successful second quarter this year. We are pleased with the operational results for the company, particularly with the sequential quarterly reduction of costs, despite the acquisition of Speedy Dragon on April 10, 2007. Gross profit for the quarter was $2.62 million, which yielded a gross margin of 37.3%, up sequentially from the 32.4% we reported for the first quarter of this year. Net margin for the quarter was 23.5%.»

I say that at first sight the company's business is new and legit. I'll have to dig a lot deeper, deeper than just reading SEC filings, to know about management's or owner's past. And I'll do that over the upcoming updates.

For now I'll keep holding UTVG.OB for the long term. Thanks La-Onda :)

La-Onda sent me another e-mail, apparently his source confused ticker symbols:

«Sorry David, "wrong alarm"

quotation:
Hi Oliver,
I had a look at my old "notes", and could not find UTVG....Could be mistaken identity.....There is a company with similar ticker, travelling business, incorporated in Vancouver, that was clear pump/dump, plus all kind of problems with management, cooking the books, late filing, delisted, and so on....That company was "discovered" ( not sure if it was posted on our board ) by Chris, our "bad boy"....
Sorry, probably I am wrong, it must be something else than UTVG. When you did mention it to me, I had very quick. superficial look, and it pops in my mind as bad company, so I sent you a "warning"....Bottom line, it is not UTVG

cheers from SGP
Oliver»

Yep, UTVG is a new company, it doesn't have an obscure past.

We'll get 3rd quarter earnings this week (http://biz.yahoo.com/bw/071023/20071023005266.html?.v=1) so that will be a good opportunity to know more about UTVG.OB and its growth prospects.

According to my valuation model and given the current fundamental trends (http://www.3stocksonfire.org/fundamental.model.php?ticker=UTVG.OB&portfolio=main), UTVG's value is much higher than the current share price.

I'll keep holding UTVG.OB for the long term.

Because of a technical issue on David's internet connection he was not able to publish this update.

The instructions for this position is: HOLD

UTVG.OB will release 3rd quarter earnings this Friday after the close:

• Universal Travel Group Announces Q3 FY '07 Earnings and Conference Call (http://biz.yahoo.com/bw/071023/20071023005266.html?.v=1)
Business Wire (Tue, Oct 23)

However, the conference call will be held just on Monday morning.

I guess management is doing this to gather as many people to the conference call as possible.

The one analyst covering the company is calling for the following numbers:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41700;image)

$0.08 EPS on $10.5 M revenue. I'm not going to predict this quarter's numbers because I see they will change a lot in the future, because the company announced several new acquisitions after September 30th, 2007.

For 2008 I'm expecting $0.49 EPS and I'll keep holding UTVG.OB for the long term on that basis.

Q3 earnings will be out today after the close (I guess it will be after the close, but there wasn't any indication on the exact timing of the release) and I'll hold through earnings, even though I already had a bad experience with ETLT.OB, which just reported poor 3rd quarter earnings.

I believe UTVG.OB is very different. It is a fast growing and profitable operation in a more innovative business segment. We'll see what we'll get.

I'll keep holding UTVG.OB.

Great quarter - $20.4mm revenue; $0.09 diluted EPS.

http://biz.yahoo.com/prnews/071109/nef070.html?.v=11

Nice pick David.  Applaud.

The only downside of this stock that I see is Hawk Associates, which was responsible for the CHID pump and dump.

Quote from: buddjas1 on November 09, 2007, 04:48:35 PM
Great quarter - $20.4mm revenue; $0.09 diluted EPS.

http://biz.yahoo.com/prnews/071109/nef070.html?.v=11

Nice pick David.  Applaud.

The only downside of this stock that I see is Hawk Associates, which was responsible for the CHID pump and dump.

Yeah, well, Hawk Associates covers many stocks.

• Universal Travel Group Q3 FY'07 Revenue $20.4M; Net Income $3.1M or $0.09 Diluted EPS (http://biz.yahoo.com/prnews/071109/nef070.html?.v=11)
PR Newswire (Fri, Nov 9)

Hawk's estimates were totally out of the map, especially on the revenue side, which came in double of what they expected:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=41804;image)

Did I tell you UTVG.OB is the fastest growing company I've ever seen? Take a look at this:

«Universal Travel reported record revenue of $20.4 million for the third quarter, an increase of approximately 1,252% from $1.5 million for the comparable quarter in fiscal year 2006 and 190% sequentially from the second quarter of 2007.»

Growing 190% a quarter :o Of course, this is due to acquisitions ... companies UTVG.OB has been buying for 7 times earnings or even less.

With $0.09 EPS in the 3rd quarter of 2007 and this type of growth (EPS grew 80% sequentially from Q2 2007, when the company reported $0.05 EPS), I naturally expect UTVG.OB to earn at least $0.5 EPS in full year 2008. This should make the stock at least double from current levels over the next 12 months.

I still have to study some more of this report and listen to today's conference call (it will happen  while the market is open), but I already know that I'll keep holding UTVG.OB.

UTVG's 3rd quarter results were great, but management blew it all at the conference call. Let me explain:

Someone asked why, with $20 M in revenue vs the $10 M expected EPS was just $0.09 vs the $0.08 expected by Hawk Associates?

Management didn't understand the question and it replied: "the 3rd quarter is the strongest from a seasonal standpoint. Next quarter we'll probably have less revenue".

But, on a prior response, they said the 3rd quarter profit margin was negatively impacted by the acquisition costs.

Well, the lesson I get from this is that I should have waited to buy UTVG.OB on a pullback to the 50 days SMA ... by the way, management said it is actively working towards moving from the OTCBB to a national exchange, but they say it takes time, UTVG.OB is just one year old so it doesn't have a lot of financial history.

I understand UTVG.OB fell 16% yesterday and it was awful. But I remain confident that the company will make $0.5 EPS next year and therefore it should be a $10 stock.

I'll keep holding UTVG.OB for the long term.

David, you just mentioned "buying on a pullback". This is what you'd been trying to avoid all along. I am curious as to how you'd propose to do that, based for instance, on the UTVG case, analyzing its particular chart for the day of when you purchased it and not knowing the present state of the chart. You said it was hard before to get the pullback, what makes you change your mind now?
Thanks.
Berloga

Quote from: berloga on November 13, 2007, 12:19:10 PM
David, you just mentioned "buying on a pullback". This is what you'd been trying to avoid all along. I am curious as to how you'd propose to do that, based for instance, on the UTVG case, analyzing its particular chart for the day of when you purchased it and not knowing the present state of the chart. You said it was hard before to get the pullback, what makes you change your mind now?
Thanks.
Berloga

Hi Berloga, what I'm starting to think is that I should take more time before buying a stock. I should study it for several days or even weeks and only then buy it ... it's just that I take so much effort after buying which after all isn't nearly as useful as the effort before buying.

The "buy trigger" could then come from a slide to a support area or a fundamental catalyst.

It isn't right to take two hours to buy a stock and then spend 1/2 an hour everyday from then on to justify that buy. I should take 10 hours to study a stock before buying and then just update the stocks with meaningful changes or information.

I'm working on this.

I generally like the idea of investing in tourism in China ... I mean, the base is so low it can only grow, and given the population numbers, it will probably be a huge expansion.

UTVG.OB seems to be a great company, growing phenomenally. In fact, it is the fastest growing company I've ever seen.

But, as realcoolhead says, it is a Chinese + OTCBB combination, and that makes me a 32% loser at this point.

I'm going to hold and study UTVG.OB for some more time, hopefully for the long term. 

Hi realcoolhead, when you have some time, can you please check if the following website is for real or not and what you think of it?

http://www.cnutg.com/

Thanks :)

David, it is for real. However there are too many players in the space:

www. ctrip.com
www.96115.com
www.qunar.com
www.elong.com
www.aoyou.com
......

The first three are most popular. When I went back to China in 04 and this year, I used Ctrip. I never heard of www.cnutg.com.

So it all comes down to marketing and how much percent of pie UTVG can grab.

Quote from: David Randolph on November 15, 2007, 09:00:43 AM
Hi realcoolhead, when you have some time, can you please check if the following website is for real or not and what you think of it?

http://www.cnutg.com/

Thanks :)

Doesn't it make more sense to go with the leader? Best in Group, CTRP? It does to me.

Quote from: BigSully1 on November 15, 2007, 02:54:27 PM
Doesn't it make more sense to go with the leader? Best in Group, CTRP? It does to me.

It's all a matter of price. CTRP is a $3.8 B market cap company and trades at 21 times fiscal 2008 earnings. UTVG is a $0.13 B market cap company and trades at 7 times next year's earnings.

So, no, it doesn't make sense. Not to me.

The thing is: the bigger one, the more customer, the more marketing influence, the better deal customer can get, then the more customer coming, the bigger gets bigger ...

Back in the days of 98/99, there are lots of competitions to eBay: uBid, onSale ... where are they now?

Quote from: David Randolph on November 15, 2007, 03:07:01 PM

Quote from: BigSully1 on November 15, 2007, 02:54:27 PM
Doesn't it make more sense to go with the leader? Best in Group, CTRP? It does to me.

It's all a matter of price. CTRP is a $3.8 B market cap company and trades at 21 times fiscal 2008 earnings. UTVG is a $0.13 B market cap company and trades at 7 times next year's earnings.

So, no, it doesn't make sense. Not to me.

QuoteThe thing is: the bigger one, the more customer, the more marketing influence, the better deal customer can get, then the more customer coming, the bigger gets bigger ...

Back in the days of 98/99, there are lots of competitions to eBay: uBid, onSale ... where are they now?

First of all let me say thank you for your contribution to this thread realcoolhead, on a stock you don't have an interest.

That's a solid argument in favor of large caps. But I think EBAY's case is different from UTVG's. In EBAY's industry it was a matter of the winner takes all ... moreover the competitors you're talking about weren't profitable and when the stock market funds dried, the companies died. UTVG is profitable (at least if one believes the financial statements, which is a long shot as we know).

A good question also is: Where is EBAY now?

True. I didn't mean to buy big-cap. And eBay's buisiness is very unique too.

I guess I just "hate" .OB stocks.  ::)

On another note, I think you may want to expand market-cap a little bit: between $1-$5 billion there are still many high growth companies, like GIGM, TBSI in the portfolio now. I think they are more or less "proven" business so there is less risk, yet still with 5-10 bagger possibility, see where RIMM, GRMN were a year or so ago...

Quote from: David Randolph on November 15, 2007, 04:09:11 PM

First of all let me say thank you for your contribution to this thread realcoolhead, on a stock you don't have an interest.

That's a solid argument in favor of large caps. But I think EBAY's case is different from UTVG's. In EBAY's industry it was a matter of the winner takes all ... moreover the competitors you're talking about weren't profitable and when the stock market funds dried, the companies died. UTVG is profitable (at least if one believes the financial statements, which is a long shot as we know).

A good question also is: Where is EBAY now?

QuoteTrue. I didn't mean to buy big-cap. And eBay's buisiness is very unique too.

I guess I just "hate" .OB stocks. ::)

I'm starting to share that feeling too realcoolhead. Check the new "Watch List (http://www.3stocksonfire.org/trading/index.php?board=40.0)" board, no OTCBB or PK allowed. I'm going to take them out of my radar for good.

QuoteOn another note, I think you may want to expand market-cap a little bit: between $1-$5 billion there are still many high growth companies, like GIGM, TBSI in the portfolio now. I think they are more or less "proven" business so there is less risk, yet still with 5-10 bagger possibility, see where RIMM, GRMN were a year or so ago...

You've read my mind, I've been thinking about it ... it seems it is easier for a mid-cap to achieve a "fair" multiple than for a small or micro cap. Or else it is just that at this particular moment small caps are out of favor ... for example, in a "normal" market CIMT would have gone up 50% due to yesterday's earnings news. In this type of market it went up just 3.6%. But I'm not worried because over the long term value always gets recognition. And I remain a long term bull in the US stock market.

fyi; nice seeking alpha summarization:

The Fast Ascent of Universal Travel Group
posted on: November 16, 2007 | about stocks: UTVG.OB   

A year ago, Universal Travel Group (UTVG.OB) was a small travel company is southern China, taking in $1.5m in revenues for Q3 2006. Its main asset was this company called Yu Zhi Lu ("YZL") which provided hotel reservations, packaged tours, and air delivering out of Shenzhen. Since then, much has happened. It has gone on an aggressive acquisition strategy, gobbling up companies to diversify its service offering as well as geographical reach.

In April 2007, it acquired Shenzhen Speedy Dragon, an international and domestic freight forwarding firm. In August 2007, it bought Xi'an Golden Net Travel Service Company, a travel services outfit with operations in western China. Also in August, it acquired Shanghai Lanbao Travel, a centralized real-time booking system providing hotel bookings, air ticket and tourism information via the internet and mobile phone. Shanghai Lanbao owns and manages the award-winning China Booking Association website, which receives about 200,000 visitors daily. Finally, in October, it snapped up Foshan Overseas International Travel as well as Tianjin Golden Dragon Travel, both leading travel services companies in their respective cities.

What made this fast growth possible was that all the acquisitions were engineered via a combination of equity and non-interest bearing promissory notes, with no cash at all, and all the targets ended up as fully-owned subsidiaries of YZL (except for Tianjin, which YZL owns 90%). This would only have been possible with the company's liquid shares, which became OTC traded via a reverse acquisition in mid 2006.

The real question here is how the companies are integrated into the overall group operations and if synergies are realized. I suspect its most important national (as opposed to regional or city-wide) platform going forward is the CBA Hotel website, which could position the company to compete with Ctrip and eLong. And with the Beijing Olympics coming up, on top of China's fast growing tourism rate, this is a great sector to be in right now.

With five major acquisitions in the space of just over 6 months, it is no wonder that the company chalked up record financial results for Q3, released earlier this week. Some highlights are:

    * Record revenue of $20.4 million, an increase of approximately 1,252% from Q3 2006 and 190% sequentially from Q2; and
    * Net income of $3.1 million, or $0.09 earnings per share, up approx. 219% from Q3 2006 and 86% from Q2 2007.

The company is expecting net income for FY2007 of $8.2 m-$8.5 m, or EPS of $0.23-$0.24, an increase of over 220% from 2006. EPS for 2008 was projected by Maxim Group (research dated 10/23/07) to be $0.39.

With its current share price of $3.70, this works out to a P/E of 15.7 (for 2007) and 9.5 (for 2008). For a company that is growing so fast, this is really one of the cheapest stocks on the market. Compare these figures to the 2007 P/E of Ctrip (CTRP) (81.6x) and eLong (LONG) (>100x) and you will see what an amazing buying opportunity this is.

Disclosure: Author has a long position in UTVG.OB

Thanks for that analysis la-onda :)

I fully agree with the author, but the market, at least over the short term, doesn't.

UTVG.OB made $0.09 EPS in Q3 2007 so with the acquisitions it recently made I see no less than $0.5 EPS in 2008. And yet the stock closed yesterday at $3.84, down 2.8%. It should close 2008 at $10, if everything goes as expected.

I'm a bit more optimistic in UTVG.OB remaining for a long time in the Main (when compared to CHME.OB) because management said it is actively trying to list on the AMEX or Nasdaq, that should be a great improvement for the stock in terms of investor's confidence.

I'll keep holding UTVG.OB.

UTVG is following the same trend as CHID, Hawk Associate's last pump and dump.  I will never touch another one of Hawk's stocks again.  Hawk made CHID look like a great company with growing earnings, solid acquisitions, and the possibility of AMEX listing.  Now CHID is at 15 cents, no earnings, and the acquisitions were a fraud. 

thanks for the good news...we need it...

No offense; I own UTVG too.

China just ordered like 110 jets from airbus, gotta figure they are expecting some Chinese people to be doing some traveling lol, gotta be good for this stock longer term.

Nice doji today, Im thinking of getting in....

Chinese stocks went from loved to hatred over the last couple of weeks and I believe that's the main explanation to why UTVG.OB is down so much. Also management said the past quarter was the strongest from a seasonal standpoint.

It's hard to face the fact that I'm losing 46% in this stock, and this in just about a couple of weeks. I don't know if it serves of any consolation, but the people who bought at the April highs were also losing 56% one month later, and yet they were winning 60% six months later.

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=42120;image)

So, will I be winning 60% six months from now?

I don't know, but given this stock's volatile history and financial information, it's possible.

I'll keep holding UTVG.OB for the long term.

I've been studying UTVG's business and various subsidiaries at the company's website (http://www.chutg.com/).

I also note that the company earned 9 cents per share in Q3 2007, which annualized gives me $0.36 EPS. But, these results still didn't count with the company's latest two acquisitions, which were made in Q4:

• Universal Travel Group Signs Agreement to Acquire 90% of Tianjin Golden Dragon International Travel Service Company (http://biz.yahoo.com/prnews/071017/new140.html?.v=5)
PR Newswire (Wed, Oct 17)

• Universal Travel Group Closes Acquisition of Foshan Overseas International Travel Service Co. Ltd. (http://biz.yahoo.com/prnews/071029/nem070.html?.v=24)
PR Newswire (Mon, Oct 29)

Because both these companies are profitable (according to the company's information) I would expect them to add up to the 4th quarter earnings of UTVG.OB. Say UTVG.OB will earn $0.12 EPS in Q4 2007 and that would mean $0.48 annualized.

A company growing EPS this fast should be awarded at least a p/e of 15, so UTVG.OB should be trading at $7.2, say, in Q1 2008. I believe this isn't just possible but likely and I'll continue holding UTVG.OB for the long term.

http://www.businesswire.com/portal/site/home/index.jsp?epi-content=NEWS_VIEW_POPUP_TYPE&newsId=20071203005730&ndmHsc=v2*A1196686800000*B1196720803000*DgroupByDate*J1*N1000837&newsLang=en&beanID=202776713&viewID=news_view_popup

Universal Travel Group To Restate Previously Issued Q3 '07 Financial Statements

"Revenues for Shanghai Lanbao in the quarter ended September 30, 2007 as restated were $916,467 compared to the $8,453,949 previously reported for the period. Restated revenues of Universal Travel Group for the period were $12,813,942 compared to the $20,351,424 previously reported. Significantly, gross profit and net income are not affected by the change in reporting methodology and remain $4,505,579 and $3,066,475 for the third quarter of 2007."

They were only wrong by about 90%.  Now we know the reason for the retrace.  I hate being the last to know.

additionally:   ::)
As a result of the restatement, management is adjusting its fiscal 2007 guidance, which now reflects the recent closing of both the Foshan and Tianjin acquisitions in the fourth quarter. Fiscal 2007 revenue is expected to come in between $44 million and $45 million, an increase of 340% to 350% from $10.01 million reported in fiscal 2006. This guidance is up from the previously issued range of $35 million to $36 million reported in August 2007 for FY'07. Net income for fiscal 2007 is now expected to be in the range of $8.5 million to $8.8 million, or $0.23 to $0.24 earnings per share, an increase of 233% to 245% from $2.55 million reported in fiscal year 2006. This is an increase from the range of $8.2 million and $8.5 million previously announced for FY'07 in August 2007.

Universal Travel Group Chairwoman and CEO, Jiangping Jiang, stated, "We remain committed to growing our company for the long-term and I continue to be encouraged by the numerous opportunities we see in the near future as well as the performance of our subsidiaries. The restatement will not in any way impact our ability to continue serving our customers and the Chinese travel market successfully."

Universal Travel Group plans to restate its third quarter financial statements and file them with the SEC today. The nature of the accounting adjustment and the effect on the financial statements and earnings per share for the relevant period will be discussed in the Amendment.

The company also announced that as of today, the current CFO, Xin Zhang will be re-assigned to another position in the general staff of the finance department.

Until the company files the restated financial statements with the SEC, investors and other users of the company's SEC filings should not rely on the company's third quarter 2007 financial statements or any communications relating to such periods.

QuoteThey were only wrong by about 90%.  Now we know the reason for the retrace.  I hate being the last to know.

I don't think it matters. What's the meaning of revenues? Just EPS matters and that was unchanged at $0.09 in Q3 2007. Revenue declined but profit margins rose. Furthermore they increased guidance for the full year.

I don't think this news should have any impact on UTVG's share price.

I remember that when UTVG issued its first press release about Shangai Lanbao acquisition (http://biz.yahoo.com/prnews/070919/new026.html?.v=23) that this company had a very high net profit margin:

«Shanghai Lanbao, had unaudited revenues of $1.3 million and a net income of $770,707 for the first six months of 2007.»

Then when they reported Q3 Shanghai Lanbao appeared as a low margin business:

«In Q3 FY'07, Xi'an Golden Net and Shanghai Lanbao reported $4.5 million and $8.5 million in revenue respectively, or approximately 22% and 42%, respectively, of overall company sales.»

Now they came back to the original accounting method. I actually prefer the business this way ... better to have a high margin than high revenue numbers, the market likes it better that way.

Anyway, UTVG may go down today due to the headline, but I believe nothing has changed in the company's investment story.

You may not be concerned, but there are two huge problems here.  (1) We cannot trust the accounting; and (2) There was a pre-public release of the information.  I had little trust in this story before because of Hawk Associates and the PR was the last straw.   

Quote(2) There was a pre-public release of the information.

You think the previous fall was because this information was coming out and there was a leak ... I think it was because at the conference call management said "Q3 is our seasonally strongest quarter" and the general market decline and distrust of Chinese stocks, especially smaller ones.

QuoteI had little trust in this story before because of Hawk Associates and the PR was the last straw.

Yep, I see what you mean. I also dislike Hawk's "research" in general, but I wouldn't dismiss a stock just because it is covered by them. But it's a red flag.

Quote(1) We cannot trust the accounting;

I agree that the press release out today doesn't help building investors' confidence in the company's accounting practices. But I still prefer to trust the financial statements than the chart.

Did you sell? If you did, I understand your reasons ... I'll keep holding.

David, I have to say that I am amazed by your stubbornness.

Let's think this way, you only want 15 stocks right? I bet there are better companies that fit your bill. Even if UTVG is a good one eventually, is it worth taking so much uncertainty?

Quote from: David Randolph on December 03, 2007, 10:11:14 AM
I agree that the press release out today doesn't help building investors' confidence in the company's accounting practices. But I still prefer to trust the financial statements than the chart.

Did you sell? If you did, I understand your reasons ... I'll keep holding.

QuoteDavid, I have to say that I am amazed by your stubbornness.

hehe, I call it "strong hands".

QuoteEven if UTVG is a good one eventually, is it worth taking so much uncertainty?

Yes, UTVG is the fastest growing company I ever saw. If the fundamentals given by the financial statements are true I could see it rising 10 fold or more over the next few years. In my opinion it is worth the risk, but I understand and respect your concerns.

Though I dont like .OBs but at the moment I think anything NON-US would be better. Lets give UTVG try with a small position size then usual. I am in.

I agree that UTVG may be a fast growing company, but who knows what "slight correction" the management can bring forward a couple of months from now!? Perhaps there will be a 90% correction to the income? I think this company is dodgy. The business idea is clear but the source of growth is foggy. Yes, there are 1.5bln of chinese lads and lasses out there, but do they want to travel? Also, perhaps there are 10's if not 100's of travel agencies in China to meet the demand. Chinese are good cooks (my favorite, but not when it comes to books).

At the same time, I am sure there are companies that have a clear business strategy, well defined market, demand and robustness in financial statements. I'd rather bet on a horse, than an ostrich, albeit both run fast.

We've been focusing on the following press release:

• Universal Travel Group To Restate Previously Issued Q3 '07 Financial Statements (http://biz.yahoo.com/bw/071203/20071203005730.html?.v=1)
Business Wire (Mon 9:15am)

But there was also another one out:

• Universal Travel Group Acquires Majority Ownership of Tianjin Golden Dragon (http://biz.yahoo.com/bw/071203/20071203005679.html?.v=1)
Business Wire (Mon 8:48am)

UTVG isn't reacting all that bad to the "restating" news. It wouldn't surprise me if we closed positive on the day (not that I would read much into it).

Quote from: David Randolph on December 03, 2007, 11:17:23 AM
We've been focusing on the following press release:

• Universal Travel Group To Restate Previously Issued Q3 '07 Financial Statements (http://biz.yahoo.com/bw/071203/20071203005730.html?.v=1)
Business Wire (Mon 9:15am)

But there was also another one out:

• Universal Travel Group Acquires Majority Ownership of Tianjin Golden Dragon (http://biz.yahoo.com/bw/071203/20071203005679.html?.v=1)
Business Wire (Mon 8:48am)

UTVG isn't reacting all that bad to the "restating" news. It wouldn't surprise me if we closed positive on the day (not that I would read much into it).

I have a somewhat different take than some on today's "restatement" I am with David on this. My knee jerk reaction to seeing the news was that I should close my position immediately, but I decided to read and think first. (thanks to David's influence on my methodology). 
My conclusion was that, while this might be a factor short term, there is no change in fundamentals. 

Here is my reasoning:
1. Restatements are almost always a red flag, but-

2. "it will restate its previously issued third quarter financial statements to report the revenues of the company's subsidiary, Shanghai Lanbao"  This change was not the result of any errors or ommisions, but a choice ( a good one I think) made by management to recognize revenue from  a newly aquuired subsidiary in a way that better portrays their growth.

3. "Significantly, gross profit and net income are not affected by the change in reporting methodology and remain $4,505,579 and $3,066,475 for the third quarter of 2007." This really takes the sting out of the restatement. At this time, there is nothing to suggest to me that they are cooking the books.

4. "As a result of the change, Universal Travel's gross margin for the third quarter of 2007 is now 35% compared to the 22% previously reported. Similarly, since net income for the third quarter remains as reported, net margin increases to 24% compared to the previously reported 15%."  - Aquasitions almost always create some accounting difficulties. The restatement indicates to me that management is alert and willing to listen to its accounting firm, because the advise to restate surreally came from someone with a sophisticated, broad based accounting background.

5.  "As a result of the restatement, management is adjusting its fiscal 2007 guidance, which now reflects the recent closing of both the Foshan and Tianjin acquisitions in the fourth quarter. Fiscal 2007 revenue is expected to come in between $44 million and $45 million, an increase of 340% to 350% from $10.01 million reported in fiscal 2006. " - One of the problems any small company faces is that of getting noticed in the markets. 340% revenue growth is very good news and likely to be noticed.

All in all, UTVG continues to look like a young, rapidly growing company in a growing sector.

Cooked books can occur in any industry, in any country, or in any size company. I don't see any particular evidence yet of anyone in the UTVG's kitchen 

Some concerns to watch :
The CFO was reassigned. This could mean that he had strong objections to this restatement on ethical grounds. Or, it may mean he is an incompetent boob that was removed because he never saw this accounting choice until the outside accounting firm suggested it to the Board. take your pick.
Long term:
The company is undergoing rapid growth going into the Olympics. How will they do after they are over?
Right now the industry is in its infancy, but some consolidation is already occurring. Is UTVG going to end up being a little fish or a big fish? Currently, I do not know enough about travel in China to have any notion about this, but they have already acquired two companies.

Revenues fall by $7.5 million, but the income remains unchanged?  That makes no sense--profit margin of 0% on that revenue???  Fishy to me, unless someone can explain it away.

Quote from: buddjas1 on December 03, 2007, 09:29:22 AM
http://www.businesswire.com/portal/site/home/index.jsp?epi-content=NEWS_VIEW_POPUP_TYPE&newsId=20071203005730&ndmHsc=v2*A1196686800000*B1196720803000*DgroupByDate*J1*N1000837&newsLang=en&beanID=202776713&viewID=news_view_popup

Universal Travel Group To Restate Previously Issued Q3 '07 Financial Statements

"Revenues for Shanghai Lanbao in the quarter ended September 30, 2007 as restated were $916,467 compared to the $8,453,949 previously reported for the period. Restated revenues of Universal Travel Group for the period were $12,813,942 compared to the $20,351,424 previously reported. Significantly, gross profit and net income are not affected by the change in reporting methodology and remain $4,505,579 and $3,066,475 for the third quarter of 2007."

They were only wrong by about 90%.  Now we know the reason for the retrace.  I hate being the last to know.

Yeah, that is wierd that they change that much and yet dont even change the other figures at all.  I dont get it.

I didnt pull the trigger to buy yet and now am a bit more unsure.  I just moved to LA, looks like I live about 100 blocks away from their office on the 10000 block of Wilshire Blvd.  If it wasnt such a long drive (that could take like an hour one way) I would go check out their offices lol. 

may be you can go there during week end
;)

QuoteI just moved to LA, looks like I live about 100 blocks away from their office on the 10000 block of Wilshire Blvd.  If it wasnt such a long drive (that could take like an hour one way) I would go check out their offices lol.

You would go there, find an empty space and probably conclude the business is a fraud ;D

From the latest earnings release:

«"Furthermore, with the rapid expansion of our company we have relocated our U.S. headquarters from Los Angeles to New York City and we look forward to forging a close relationship with our investor base there."

The company's new address is 1330 Avenue of the Americas, 21st floor, New York, NY 10019. The company has also changed its telephone number, which is now (646) 200-6314.»

Quote from: buddjas1 on December 03, 2007, 03:21:40 PM
Revenues fall by $7.5 million, but the income remains unchanged?  That makes no sense--profit margin of 0% on that revenue???  Fishy to me, unless someone can explain it away.

I love that expression, "fishy". Ok, let's check out what management said on the subject:

«Universal Travel Group (OTCBB:UTVG), a fast growing travel services provider in China, announced today that it will restate its previously issued third quarter financial statements to report the revenues of the company's subsidiary, Shanghai Lanbao, on a commission based revenue recognition method as opposed to the transaction-based method originally used in preparing the third quarter financials. The decision to restate the revenues on a commission based as opposed to a revenue based methodology was approved by the company's board of directors based on discussion with senior management, outside counsel and the company's current public accounting firm.

Revenues for Shanghai Lanbao in the quarter ended September 30, 2007 as restated were $916,467 compared to the $8,453,949 previously reported for the period.»

The issue is with Shangai Lanbao only. Let's study just a bit more about this subsidiary:

Shanghai Lanbao Travel Service Co., Ltd. (http://www.chutg.com/ONEWS-lb.asp)

Only realcoolhead could say something about the subsidiary's website, since it is in Chinese: http://www.cba-hotel.com/ (but I guess he's got other stuff to do, since he doesn't like this pick in the first place, so let's skip it).

Shangai Lanbao is an hotel booking service. It earns a commission for its services. The hotels get more demand and travelers make more informed choices. Initially UTVG booked Shangai Lanbao's revenues using a "transaction-based method". This means probably consumers pay in http://www.cba-hotel.com/ and then Lanbao transfers the money to the hotels, retaining its commission. Initially UTVG booked all the money passing through as revenue. Now it opted to book just its commission part as revenue, using a "commission based revenue recognition method". I think this is a better way to reflect the company's operations. 

This is why obviously gross and net income weren't affected. Just profit margins grew, since revenues recognized naturally fell from $8,453,949 to $916,467.

I'm not all that surprised by this change because in prior press releases the company always used the commission based revenue recognition method:

• Universal Travel Group Newly-Acquired Subsidiary Shanghai Lanbao Reports $1.3M Revenue for the First Six Months of FY '07 (http://biz.yahoo.com/prnews/070919/new026.html?.v=23)
PR Newswire (Wed, Sep 19)

Just one more note on yesterday's press release:

«Fiscal 2007 revenue is expected to come in between $44 million and $45 million, an increase of 340% to 350% from $10.01 million reported in fiscal 2006. This guidance is up from the previously issued range of $35 million to $36 million reported in August 2007 for FY'07. Net income for fiscal 2007 is now expected to be in the range of $8.5 million to $8.8 million, or $0.23 to $0.24 earnings per share, an increase of 233% to 245% from $2.55 million reported in fiscal year 2006. This is an increase from the range of $8.2 million and $8.5 million previously announced for FY'07 in August 2007.»

UTVG's trailing earnings multiple is 14.7 while it is growing them by about 240% from the year ago levels. I continue to see $0.5 EPS and at least $7.5 price per share in 2008. Much more over the long term if everything goes right, I'm a big fan of the tourism sector in China.

I understand realcoolhead's and other's concerns, I mean, should we trust a Chinese and OTCBB company in the first place? Maybe not, but until I get complete evidence that the company is a fraud or is cooking books I'll be a believer. The potential upside if the story is real is 1,000% or more, the potential loss is 100% (currently on 4.8% of total capital, of course).

I don't think we should put stocks in bags with etiquettes. Each stock is unique and has its own story. UTVG.OB doesn't have anything to do with ETLT.OB, for example (I was wrong on that one - not because it was a fraud, but because fundamentals deteriorated a lot - there wasn't any growth to begin with). UTVG.OB is a strong growth story, in fact, it is the fastest growing company I've ever studied.

I'll keep holding UTVG.OB for the long term. 

David: standing ovation for the perfect analysis on commission based vs. revenue based!
great insight!

Thanks for the heads up lol, that would have been quite a wasted trip had I decided to go!

--------------------
You would go there, find an empty space and probably conclude the business is a fraud

From the latest earnings release:

«"Furthermore, with the rapid expansion of our company we have relocated our U.S. headquarters from Los Angeles to New York City and we look forward to forging a close relationship with our investor base there."

The company's new address is 1330 Avenue of the Americas, 21st floor, New York, NY 10019. The company has also changed its telephone number, which is now (646) 200-6314.»
------------------------

Quote from: terainvestment on December 04, 2007, 08:23:51 AM
David: standing ovation for the perfect analysis on commission based vs. revenue based!
great insight!

Thanks terainvestment, you're very nice :)

QuoteThanks for the heads up lol, that would have been quite a wasted trip had I decided to go!

Well, you can always make a trip to New York ;D

Nice volume for UTVG yesterday. I guess investors are seeing that the restatement wasn't a negative news.

Just checking out the 4th quarter:

Quote«Fiscal 2007 revenue is expected to come in between $44 million and $45 million, an increase of 340% to 350% from $10.01 million reported in fiscal 2006. This guidance is up from the previously issued range of $35 million to $36 million reported in August 2007 for FY'07. Net income for fiscal 2007 is now expected to be in the range of $8.5 million to $8.8 million, or $0.23 to $0.24 earnings per share, an increase of 233% to 245% from $2.55 million reported in fiscal year 2006. This is an increase from the range of $8.2 million and $8.5 million previously announced for FY'07 in August 2007.»

They say revenue for the full year will be about $44.5 M. In the first 9 months of the year revenue was $26.8 M, so we're looking at about $17.7 M in Q4, up from $12.8 M in Q3 (this is essentially due to two acquisitions).

As for EPS, they gave guidance of $0.235. In the first 9 months of the year it was $0.0188+$0.047+$0.086 = $0.152, so we'll get something like 8 or 9 cents EPS, or about the same as in Q3, which is seasonally the strongest, don't forget that.

I see that it hasn't been any significant dilution over the quarters, at least not shown in the financial statements.

I'll continue holding UTVG.OB for the long term.

UTVG.OB rose 1.8% yesterday and it stands basically at the same price it was before the restatement news. I believe the market is interpreting the news the same way I did, that is, nothing changed.

I think UTVG.OB is undervalued at this point and I'll continue holding the stock.

Universal Travel Group Appoints New DirectorLast update: 12/10/2007 8:48:08 AM

James Treacy Joins UTVG's Board NEW YORK & SHENZHEN, China, Dec 10, 2007 (BUSINESS WIRE) -- Universal Travel Group (UTVG), a fast growing travel services provider in China specializing in packaged tours, air ticketing, hotel reservation and air cargo transportation, announced today the appointment of James Treacy as an independent board of director for UTVG. Treacy brings more than 20 years of experience with public companies. In 1994, he joined TMP Worldwide, now Monster Worldwide, as chief executive officer of the company's Recruitment Advertising Division. Treacy played an integral role in the acquisition of Monster.com in 1995 and the creation of the corporate cross-selling strategy known as "Feeding the Monster." In 1998, Monster appointed Treacy as executive vice president, COO and to its board of directors. He became company president and COO in November 2001, serving in those roles until his resignation in 2002. During his tenure, Monster became a member of the S&P 500, the NASDAQ 100 and the Fortune e-50. Prior to Monster, Treacy was a senior vice president with WPP, USA. He was also with The Ogilvy Group and before that was with Texaco, Inc. Treacy served on the board of publicly-listed eBookers Public Limited Company, which was sold to Cendant (now part of Travelport), in 2005. From March 2006 until March 2007, he served as a director on the board of Dice Holdings, Inc. as it prepared for its June 2007 IPO. Currently, Treacy serves on the President's Council of Valley Hospital and is an angel investor in several early stage Internet companies. He works in a private business as well as in an investor consultancy capacity. Chairman and Chief Executive Officer Jiangping Jiang said, "We are pleased to welcome Jim to the board and feel that his industry knowledge and keen understanding of the Internet as a marketing tool will help Universal Travel to reach new levels of growth and bring greater return to our shareholders."

Thanks for posting the news Aussie :)

• Universal Travel Group Appoints New Director (http://biz.yahoo.com/bw/071210/20071210005591.html?.v=1)
Business Wire (Mon 8:48am)

As Tokyopua once said, "nice pedigree" ;D

UTVG is bringing in people to increase its credibility and hopefully that will lead to improved levels of trust and a higher valuation for the company.

UTVG.OB is a Chinese tourism company. One of the things people do when they have some more money is travel. In macroeconomic terms I believe investing in tourism in China is a good option.

In microeconomic terms, I believe the company is real and its business definitely is not selling shares (like many others outthere). It is profitable and growing fast.

The 50% plus drawdown tells me nothing more than the April - May drawdown did. That is, I believe UTVG.OB will be between $8 and $10 in 6 - 12 months time.

UTVG.OB is one of my riskiest plays, and I'm 44% in the red holding this one.

But, as I wrote in my latest update, I believe we're in a similar situation to the April - June period, when UTVG.OB also fell 50% plus from top to bottom, even though fundamentals kept improving.

From the June bottom to the October high, UTVG rose 257.5%. If the same thing happens now, in about five months UTVG will be at $9.83.

I have this expectation not just because of this stock's historical patterns, but because fundamentals are supportive of my view. I see $0.49 EPS in 2008 and UTVG, probably one of the fastest growing companies in the market, should be awarded at least a 20 times earnings multiple.

I'll keep holding UTVG.OB for the long term.

Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

Quote from: tokyopua on December 20, 2007, 03:40:58 PM
Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

You show a lot of patience before buying and a great ability for timing Tokyopua. I hope you're right on this one too. :)

The SMA you're talking about is the 200 days SMA, not the 50. As you say it stands at $2.82 and ever since it was possible to calculate it, UTVG.OB never closed below that line. I hope we don't get a first now.

As always the biggest worry when it comes to OTCBB stocks is dilution. The company can be lying or trying to entice buyers so it can unload shares to them. But, insiders own 34.5% of UTVG's shares and, at least on paper, the company is profitable and has enough cash to fund operations. It has nothing to do with an ONT, for example, which is not OTCBB but was pumped and dumped anyway. And that was obvious for anyone studying the financial statements.

I can't believe I'm losing 47% on this stock ... if I have to take the loss lower than this it will be the Main's largest loss ever. Perhaps that would make me learn not to touch OTCBB stocks ever again.

Anyway, as it is now, I see the current situation as a "normal" 50% drawdown that should be bought, not sold.

I'll continue holding UTVG.OB.

Quote from: tokyopua on December 20, 2007, 03:40:58 PM
Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

You did it again Tokyo, nice 7.7% jump on Monday :)

There was a small gap left open between $3.12 and $3.18, but gaps aren't always closed ... It looks like the stock is forming a double bottom pattern, which would only be confirmed with a close above $3.93.

In Q3 2007 UTVG.OB earned 9 cents per share and given its guidance for the full year I expect 8 cents per share in Q4 2007 (also because Q3 is seasonally the strongest quarter). I guess the base for UTVG.OB is now something like $0.34 EPS for a full 12 month period. So, my 2008 EPS estimate of $0.49 means 44% growth from this base. I believe this is highly achievable, given the historical growth rates of the companies UTVG.OB has been acquiring.

With $0.49 EPS in full year 2008 I see UTVG.OB trading at about $10 late in the year, which would represent about a 200% gain from Monday's close.

I'll keep holding UTVG.OB for the long term.

Quote from: David Randolph on December 26, 2007, 06:07:20 AM

Quote from: tokyopua on December 20, 2007, 03:40:58 PM
Jumped in here finally at 2.93, might have gotten in earlier but the overall market was giving me pause.  Anyway, hope the 50 SMA at 2.82 will provide support.  The arguments David has made are compelling, and I think travel to and from China is going to boom during the Olympics anyway, so I feel good about UTVG here.

You did it again Tokyo, nice 7.7% jump on Monday :)

Thanks David, it has been a good buy in the first few days, that is always nice.  Thanks for catching my mistake on calling the 200 SMA the 50 SMA.  The stock price might still go down to the 200SMA, but since it did not last time it got close, and just looking at the chart I felt like I might not get another chance since the chart showed a horizontal support and the 200 SMA nearby.  Anyway, its nice when sometimes the technicals line up to give a good buy on an undervalued stock, its not always the case though.

In the meantime, looks like some news was out:

----------------------------
Universal Travel Group Filed 8-K/A on Recently Acquired Foshan Overseas

Dec 26, 2007 09:10:01 (ET)


NEW YORK CITY & SHENZHEN, China, Dec 26, 2007 (BUSINESS WIRE) -- Universal Travel Group (UTVG, Trade ), a fast growing travel services provider in China specializing in packaged tours, air ticketing, hotel reservation and air cargo transportation, today announced the company has filed an 8-K/A with the U.S. Securities and Exchange Commission. The filing includes the financial statements of Foshan Overseas International for the years ended December 31, 2006 and December 31, 2005 and the periods ended September 30, 2007 and September 30, 2006. The filing also includes pro-forma financial information for the years ended December 31, 2006 and 2005 and the periods ended September 30, 2007 and 2006.

-------------------------------------------

But it didnt say what the filing contained...

Mystery? author, but interesting anyway because 3SoF has 2 of the holdings talked about and I hold Fushi and have been writing some and trying to get it moved out of penny stock board. Is Giovanni di Maggio a 3SoF member?

Four Chinese Stock Picks: It Ain't Over Yet
posted on: December 27, 2007 | about stocks: FSIN / HRBN / SDTH / UTVG.OB     Print Email
China stocks are overbought; a dangerous bubble is forming; sooner or later this market will crash..

That's what we hear again and again. So is there no fairly or undervalued stock left in China? Should we stop buying and start selling? I don't think so.

What we should do is what we have always done when looking for value stocks:

Look at the story, check the fundamentals, try to understand what will happen in the near future.


There is huge growth potential in China's national economy but there is also something beyond the mainland boom: China is going global. Dalian based Fushi International Inc. (FSIN), China's biggest maker of copper clad wires used in a variety of telecommunication, automotive, utility and other industrial products, acquired their former U.S competitor Copperweld Bimetallics LLC in October. Just one month later they announced intent to invest $3.2 million in new machinery for their Copperweld facility in Fayetteville, Tennessee.

Notwithstanding the significant growth of its share price from $5 to $23 this stock is fundamentally not overbought. With ttm net earnings of $ 25.614 million and 25.17M O/S, the ttm EPS is $1.02 and the actual P/E is about 22.6, not high if you consider many Chinese tech stocks trading at 40 P/E. But more importantly, this company has shown a healthy growth each quarter and boasts a very attractive PEG ratio of 0.72 and a 2008 forward P/E of just 14.60.


Harbin Electric (HRBN), China's biggest and market dominating producer of linear motors, a specialty ranging from micro motors used in cars and medium sized motors used in power saving oil pumps up to maglev drives, has R&D agreements with Chinese and UK universities. The company had revenues of $23.64M in 2005, 40.42M in 2006 and 48.13M during the past 4 quarters with a net profit margin of 33.4%. With ttm EPS of $1.11 the stock's P/E is actually around 23 and its future appears bright.

Dutton Associates expects 2008 revenues of $118 million, rising to $220 million in 2009, with EPS of $1.78 and $3.16 respectively. Thus forward P/E for 2008 is just about 14.6 and for 2009 is about 8.2. A lot of room for further growth.


Another runner is ShengdaTech Inc. (SDTH), a leading producer of nano precipitated calcium carbonate [NPCC] and other chemical specialties. NPCC is used worldwide as a filler for tires, paints and other industrial products and the company has several patents for their method to produce these ultra fine particles. For the first time in 2006 the company reported revenues of $72.6M.

According to Yahoo the 2007 EPS is expected at $0.49 and the estimate for 2008 is $0.64, yielding a P/E of about 27 now and a forward P/E of 20. But chances are high that we will see a stronger earnings growth.

The Yahoo estimate is based on an EPS growth of 30% YoY (0.64/0.49), but for the past two quarters SDTH has shown an average YoY EPS growth of more than 50%. The company increased production capacity significantly during the first half of 2007 which makes a higher top line growth very probable. At the same time productivity (operating and net profit margin) increased continuously QoQ, so the bottom line should grow even faster. The operating margin increased from 22% in Q2/06 to 31% in Q3/2007 while the net profit margin increased from 22% to 29%. These numbers indicate that the Yahoo estimate may be overly conservative.

As Chinese become wealthier they want to travel more. This is the market where Universal Travel Group (UTVG.OB) is prospering through acquisitions and growth of its core business. The company started with revenues of about $10M in 2006 and shows impressive growth of revenue and net earnings. For Q3/2007 UTVG posted revenues of $12.8M, more than for the entire FY 2006 and 82% more than in Q2. Less than half of the revenue is due to the two acquisitions made in Q3, also the core business grew about 23% QoQ. The acquisitions have been immediately accretive and have cost investors extremely little in terms of dilution: O/S increased only 2.5% between Q2 and Q3 while the acquired companies contributed about 42% to the Q3 revenues. This is a sign of very smart, efficient and shareholder-friendly management. The stock dropped recently from its high of $5.72 down to below $3 thus offering a nice chance to get in relatively cheap. Even at $3.50 this stock is an attractive buy with a ttm P/E of 20.6 and a forward P/E (2008) of only 8.3. The strong growth expectation is also reflected in the low PEG ratio of 0.48. While the first three stocks appear to be more or less correctly valued for the time being with healthy upward potential, I expect UTVG to show a stronger pps increase during the next 6 months. Certainly the travel business will be strong around and during the Chinese Olympics so the previous all time high of $5.72 should be overtaken not later than March 2008 when the FY 2007 numbers will reveal ongoing strong growth of top and bottom line.

Disclosure: Author has a long position in some of the above-mentioned

nice year end price action to push the Portfolio performance above 28.91%  ;D  >:D

Quote from: la-onda on December 28, 2007, 10:23:12 PM
nice year end price action to push the Portfolio performance above 28.91%  ;D  >:D

You are right about that La-onda! 

I have to admit that the action today felt almost like fate trying to help David reach his goal of 30%, I mean ASTI and SDTH just ROCKED today!  Especially ASTI taking off like a race horse on a gallon of steroids starting around 3 PM, its like it woke up and said "wait, David needs to make 30%!"  ;D  I see ASTI is up 3.36% after hours, SDTH was up 1.12% after hours, so that probably makes the performance closer to 29.5% and hey, Im cool with rounding to 30!  ;)

Congratulations David on reaching your goal, and Happy New Year! 

QuoteIn the meantime, looks like some news was out:

• Universal Travel Group Filed 8-K/A on Recently Acquired Foshan Overseas (http://biz.yahoo.com/bw/071226/20071226005081.html?.v=1)
Business Wire (Wed, Dec 26)

QuoteBut it didnt say what the filing contained...

Here's the 8-K for Foshan Overseas International Travel Service Co. Ltd. (http://www.sec.gov/Archives/edgar/data/1336644/000119380507003284/e603023_8ka-utg.txt)

Foshan was acquired for $6.5 M. In the Foshan acquisition press release (http://biz.yahoo.com/prnews/071029/nem070.html?.v=24), UTVG disclosed the following:

«For the first nine months of fiscal 2007, Foshan reported unaudited sales revenues of approximately $10.6 million with a net income of approximately $970,000.»

The actual numbers constant in the financial statements were slightly different: sales were $10.34 million and net income was $953,011. Not meaningful differences though.

QuoteMystery? author, but interesting anyway because 3SoF has 2 of the holdings talked about and I hold Fushi and have been writing some and trying to get it moved out of penny stock board. Is Giovanni di Maggio a 3SoF member?

I don't think so BigSully1, but I agree with his views, especially on UTVG.OB.

Quote from: tokyopua on December 29, 2007, 04:18:26 AM

Quote from: la-onda on December 28, 2007, 10:23:12 PM
nice year end price action to push the Portfolio performance above 28.91%  ;D  >:D

You are right about that La-onda! 

I have to admit that the action today felt almost like fate trying to help David reach his goal of 30%, I mean ASTI and SDTH just ROCKED today!  Especially ASTI taking off like a race horse on a gallon of steroids starting around 3 PM, its like it woke up and said "wait, David needs to make 30%!"  ;D  I see ASTI is up 3.36% after hours, SDTH was up 1.12% after hours, so that probably makes the performance closer to 29.5% and hey, Im cool with rounding to 30!  ;)

Congratulations David on reaching your goal, and Happy New Year! 

hehe, there's still one session to go and 30% is within reach, I have my fingers crossed :D

Thanks La-onda and Tokyopua, Happy New Year!

(I'll continue holding UTVG.OB for the long term).

Heh, forgot there was one more day lol.  Well, looks like the final performance is 28%, and that is still very good!  ;D

UTVG is looking good too, I have been studying it a bit more and it seems like their logistics operations are similar to what UPS does.  Of course, there is more room for growth in that area in China, in fact UPS has been working hard to expand there.  Would be awesome if UTVG turned into the UPS of China over the years.  Unlikely, but its fun to hope!  Anyway, point is they arent just a travel company, and there is a lot of potential in their various acquisitions.

QuoteUTVG is looking good too, I have been studying it a bit more and it seems like their logistics operations are similar to what UPS does.  Of course, there is more room for growth in that area in China, in fact UPS has been working hard to expand there.  Would be awesome if UTVG turned into the UPS of China over the years.  Unlikely, but its fun to hope!  Anyway, point is they arent just a travel company, and there is a lot of potential in their various acquisitions.

You're talking about Speedy Dragon, right? Here's some more information about that subsidiary at  UTVG's website (http://www.chutg.com/ONEWS-xsl.asp?id=123).

Technically UTVG.OB came off to close the gap at $3.12. I expect the trading range between $2.75 and $3.93 to ultimately be broken out on the upside, because I see UTVG.OB earning $0.49 per share in 2008 and it should trade at least at a multiple of 15 times earnings.

I'll keep holding UTVG.OB for the long term.

Good bounce from the 200 days SMA. We're in a battle between the 200 days SMA support and the 50 days SMA resistance. I expect the longer term moving average to win.

QuoteGood bounce from the 200 days SMA. We're in a battle between the 200 days SMA support and the 50 days SMA resistance. I expect the longer term moving average to win.

Still holding just above the 200 days SMA ... the only reason why the stock doesn't rally right away is the general market weakness, in my view. I'm still confident on the long term fundamentals.

reminds me of chid.

Yup, reminds me of CHID too.  Another Hawk Associates pump and dump.  Mad at myself for buying this one.

Quote from: soxguy on January 22, 2008, 03:36:15 PM
reminds me of chid.

The only similarity I see is that they're both Chinese and OTCBB stocks. Do you see more similarities? Thanks :)

Quote from: buddjas1 on January 22, 2008, 09:11:35 PM
Yup, reminds me of CHID too.  Another Hawk Associates pump and dump.  Mad at myself for buying this one.

Ah, ok, buddjas1 has another: both are Hawk Associates (http://www.hawkassociates.com/default.aspx) clients (CHID.OB doesn't appear as a client anymore, though). If you're mad for buying, why don't you sell buddjas1? Because you're losing? Well, the stock doesn't even know who you are or at what price you bought. The way it will go has nothing to do with your buying price, so if you want to be objective and open to know where it will go, you need to free yourself up for all possibilities, inclusively the possibility of taking a loss, no?

Anyway, I respect your strategy.

Other than these similarities, CHID.OB and UTVG.OB have nothing to do with one another. The first did caps for batteries, the second operates tourism websites. The first saw its business deteriorate rapidly due to competition. The second has been expanding at a torrid pace and will reach $44.5 M in revenue in 2007 (CHID's highest full year revenue was 2006 with $12 M):

«Fiscal 2007 revenue is expected to come in between $44 million and $45 million, an increase of 340% to 350% from $10.01 million reported in fiscal 2006. This guidance is up from the previously issued range of $35 million to $36 million reported in August 2007 for FY'07. Net income for fiscal 2007 is now expected to be in the range of $8.5 million to $8.8 million, or $0.23 to $0.24 earnings per share, an increase of 233% to 245% from $2.55 million reported in fiscal year 2006. This is an increase from the range of $8.2 million and $8.5 million previously announced for FY'07 in August 2007.»

It appears to me that UTVG.OB trades at 11.3 times 2007 EPS, while net income grew 200% plus from last year. Anyway, it isn't the only stock trading way out of line with fundamentals ...

I have some accounting worries on UTVG.OB, but they're not enough to throw me out of board. I continue to be a believer, despite the, let me see ... 53% loss ??? (look who's judging you buddjas1!!!)

We have to move back above $2.75, UTVG.OB is trading at about 5.5 times my 2008 EPS estimate of $0.49.

Unless you think tourism in China will be affected by a US recession ... I don't see why UTVG.OB won't keep growing rapidly. I never thought stocks could get this cheap.

Watch List Profilesutvg
Universal Travel Group: Hit the road, Jack

Crystal D. Vogt  |  Jan 24, 2008 5:22pm EST  |  User Rating N/A

Universal Travel Group (OTCBB: UTVG)
New York, N.Y.
http://www.chutg.com/

52-week low / high: $0.51 / $5.72
Shares Outstanding: 35.7 million
Market Capitalization: 96.7 million

Gone are the days when going on vacation meant the obligatory trip to visit your obnoxious in-laws in Hoboken. For the adventurous spirits traveling to, from, or in China, Universal Travel Group (OTCBB: UTVG) is the new kid on the tourism-industry block.

The small cap serves domestic and international business and leisure jetsetters by providing an array of travel services that include airline tickets, hotel and restaurant reservations, packaged tours and air cargo services. While Universal Travel has eight company-owned reservation office locations, 103 franchised locations and a call center facility, it is headquartered in New York City, after recently relocating from Los Angeles, Calif.

Through its November 2006 alliance with TravelSky, a leading provider of IT solutions for China's air travel and tourism industries, Universal Travel has secured access to more than 3,000 domestic and international hotel booking services. Couple that with the fact that the company has partnerships with British Airways, Virgin Atlantic, Air France, Swiss International Air Lines (formerly Swissair), Iberia (Spain's national airline), Cathay Pacific and others, and travel-savvy traders are left with destination: invest.

For the third quarter ended Sept. 30, 2007, Universal Travel reported record revenue of $20.4 million for the third quarter, an increase of approximately 1,252% from $1.5 million for the comparable quarter in fiscal year 2006 and 190% sequentially from the second quarter of 2007. Net income for the quarter was $3.1 million, or $0.09 earnings per share, up about 219% from $962,633 in Q3 FY06.

For those uncertain about the long term, the China travel boom is deep rooted. Of all the reasons for the travel bull market, the forthcoming 2008 Beijing Olympics and 2010 World Expo in Shanghai are two high-profile events that will surely add a spark to the domestic and international travel business in the Middle Kingdom.

While the air travel market in China has seen exponential growth, increasing by three million air travelers per year since 1980, according to Martin Craigs, president of the industry lobby group Aerospace Forum Asia, by 2025, China's current 187 million flyers will swell to a mind-boggling 780 million. (Between now and 2010, China's online travel business is expected to surge at least 70% annually.)

Now may be the time to pack your bags and invest in Universal Travel. The outcome could provide a nice respite from hearing about your mother-in-law's ever-recurring bunions

Getting some notice today because of this perhaps?

QuoteGetting some notice today because of this perhaps?

Maybe that was it soxguy, that article is a nice summary of UTVG's investment story.

Let me copy/past the following paragraphs:

«The small cap serves domestic and international business and leisure jetsetters by providing an array of travel services that include airline tickets, hotel and restaurant reservations, packaged tours and air cargo services. While Universal Travel has eight company-owned reservation office locations, 103 franchised locations and a call center facility, it is headquartered in New York City, after recently relocating from Los Angeles, Calif.

Through its November 2006 alliance with TravelSky, a leading provider of IT solutions for China's air travel and tourism industries, Universal Travel has secured access to more than 3,000 domestic and international hotel booking services. Couple that with the fact that the company has partnerships with British Airways, Virgin Atlantic, Air France, Swiss International Air Lines (formerly Swissair), Iberia (Spain's national airline), Cathay Pacific and others, and travel-savvy traders are left with destination: invest.

For those uncertain about the long term, the China travel boom is deep rooted. Of all the reasons for the travel bull market, the forthcoming 2008 Beijing Olympics and 2010 World Expo in Shanghai are two high-profile events that will surely add a spark to the domestic and international travel business in the Middle Kingdom.

While the air travel market in China has seen exponential growth, increasing by three million air travelers per year since 1980, according to Martin Craigs, president of the industry lobby group Aerospace Forum Asia, by 2025, China's current 187 million flyers will swell to a mind-boggling 780 million. (Between now and 2010, China's online travel business is expected to surge at least 70% annually.)»

This is very interesting information and some things are new to me, like the company having 103 franchised locations. Also that estimate of 70% CAGR expected for China's online travel business. So thanks a lot and applaud soxguy :)

I've extrapolated UTVG's various businesses growth rates and net profit margins from 2007 into 2008 and got a $0.49 EPS estimate, up from $0.23 - $0.24 EPS in 2007. This would represent a 108% jump in EPS and yet ... the trailing p/e multiple is 12.2. And if you use my estimate and consider the forward p/e multiple, then it is just 5.9.

These metrics probably make UTVG not just one of the fastest growing companies in the World, but also one of the cheapest ::)

The future will certainly be interesting, because something has to give: there's something wrong with the company or else its stock price will have to rise several fold to value UTVG correctly.

For now we're back above $2.75 and I'll keep the faith!

I don't have the link here but I've read somewhere that the ultra-bear Jim Rogers is investing in China (probably this isn't new to you), particularly in the Chinese tourism sector.

Indeed, if there's a sector that is completely uncorrelated with the US economy and consumption is tourism in China, which depends on local demand. Since the Chinese save between 40 to 50% of their income, they have the cash and the desire to travel more.

The only problem is that UTVG is an OTCBB traded stock, with all the issues and tricks that may carry. But so far I haven't seen anything to complain.

The stock had a big correction but it has been holding better than the general market lately. Maybe investors looking for bargains and uncorrelated assets are finding UTVG attractive.

I just love it and will keep holding the stock for the long term.

The market doesn't like this.
       

Press Release Source: Universal Travel Group


Universal Travel Group Announces $3.5 Million Financing; Unwinding of Tianjin Golden Dragon Acquisition and Revision of 2007 Guidance
Thursday February 7, 11:49 am ET


NEW YORK & SHENZHEN, China--(BUSINESS WIRE)--Universal Travel Group (OTCBB:UTVG - News), a fast growing travel services provider in China specializing in packaged tours, air ticketing, hotel reservation and air cargo transportation, today announced it has signed an agreement for $3.5 million in financing from three Chinese financial institutions in exchange for 1,301,481 shares of Universal Travel common stock at a price of $2.70 per share. The proceeds will be used exclusively to reduce debt from past acquisitions. The funds are being paid in three installments. The first installment of $600,000 was paid upon execution of the agreement. The second installment of $1.4 million is to be paid no later than February 28, 2008 and the balance, $1.5 million, is to be paid no later than ten days after the filing of the company's 2007 annual report. The company is under no obligation to register the shares on behalf of the purchasers.
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The company also announced that it is in the process of unwinding the previously announced acquisition of 90% of the outstanding capital stock of Tianjin Golden Dragon. Universal Travel Group said information has come to its attention since the acquisition was announced that indicates the value of Tianjin Golden Dragon is significantly below the original purchase price of $7,889,000. Universal Travel and Tianjin Golden Dragon have agreed to unwind the acquisition. As a result of this development, management is marginally lowering its previously issued fiscal 2007 financial guidance. Revenue is now expected to come in between $41 million and $42 million, a year-over-year increase of 310% to 320% from $10.01 million reported in fiscal 2006. Net income is now expected to be in the range of $8.3 million to $8.5 million, or $0.22 to $0.23 earnings per share, an increase of 225% to 233% from $2.55 million reported in fiscal year 2006. The company plans to issue its fiscal 2007 operating results by the end of March.

Universal Travel Group's Chairwoman and CEO Jiangping Jiang said, "While we are disappointed that the acquisition of Tianjin Golden Dragon ultimately did not work out, it is incumbent upon us on behalf of our shareholders to evaluate acquisition opportunities that not only best fit our needs as an evolving travel services provider, but appropriately reflect a reasonable and fair purchase price based on the target company's financial standing and outlook. Upon further due diligence, we determined that the operations of Tianjin Golden Dragon did not meet our parameters and the acquisition of the company was not in the best interest of shareholders. We will continue to judiciously evaluate acquisition candidates in an effort to expand our market share across strategic geographic locations within China.

Jiang continued, "For fiscal 2008, our focus will primarily be on packaged tours and e-commerce as a way to accelerate the growth of our air ticketing and hotel reservation businesses, while enhancing overall industry credibility and brand recognition. As we have noted repeatedly in the past, we continue to view this summer's Beijing Olympics as a strong catalyst for Universal Travel Group's performance in the intermediate-term and through the end of the year."

QuoteThe market doesn't like this.

Yes, down 8.3% as I write :P

The news isn't positive, it is negative, but not significant for UTVG's long term investment story.

I actually prefer that they're being honest with shareholders and disclosing these bad news (they could sell the shares and show the increase in the # shares outstanding just in the 10-Q). I think it adds to their credibility.

But I'll make a more complete analysis after the close, not a reason to sell UTVG.OB here.

Remind anyone of CHID and the Sono acquisition? 

Need to go down to below $1 to match up CHID. I think that the best thing is to capitalize on explosiveness of such Chinese stocks, not hold them and hope. CIMT is a different story. I believe Israeli businesses are more mature and honest in overall.

QuoteI think that the best thing is to capitalize on explosiveness of such Chinese stocks, not hold them and hope.

I'm not hoping. I base my holding decision on the fundamentals of the company.

Moreover, if we think of companies instead of stocks, each one is unique.

QuoteCIMT is a different story. I believe Israeli businesses are more mature and honest in overall.

I agree.

Now concerning yesterday's news:

• Universal Travel Group Announces $3.5 Million Financing; Unwinding of Tianjin Golden Dragon Acquisition and Revision of 2007 Guidance (http://biz.yahoo.com/bw/080207/20080207006047.html?.v=1)
Business Wire (Thu 11:49am)

This press release can be divided in three parts:

1) The $3.5 M financing

«... it has signed an agreement for $3.5 million in financing from three Chinese financial institutions in exchange for 1,301,481 shares of Universal Travel common stock at a price of $2.70 per share. The proceeds will be used exclusively to reduce debt from past acquisitions. The funds are being paid in three installments. The first installment of $600,000 was paid upon execution of the agreement. The second installment of $1.4 million is to be paid no later than February 28, 2008 and the balance, $1.5 million, is to be paid no later than ten days after the filing of the company's 2007 annual report.»

As I see it, the three banks bought 1,301,481 shares at $2.7 each, totaling a $3.5 M investment. I'm sure the banks analysis was more profound than the one yesterday's sellers below that price did, which was probably none.

The 1,301,481 new shares represent 3.65% dilution, which is nothing special.

2) The Unwinding of Tianjin Golden Dragon Acquisition

«The company also announced that it is in the process of unwinding the previously announced acquisition of 90% of the outstanding capital stock of Tianjin Golden Dragon. Universal Travel Group said information has come to its attention since the acquisition was announced that indicates the value of Tianjin Golden Dragon is significantly below the original purchase price of $7,889,000. Universal Travel and Tianjin Golden Dragon have agreed to unwind the acquisition.»

Here's the initial announcement of that acquisition in December 3, 2007:

• Universal Travel Group Acquires Majority Ownership of Tianjin Golden Dragon (http://biz.yahoo.com/bw/071203/20071203005679.html?.v=1)
Business Wire (Mon, Dec 3)

Tianjin Golden Dragon is just one of four companies UTVG acquired in the packaged tours segment:

«Universal Travel Group's Chairwoman and CEO Jiangping Jiang said, "The majority holding with Tianjin Golden Dragon cements our commitment to the packaged tour market in China, which was established with our acquisitions of Xi'an Golden Net, Shanghai Lanbao and Foshan Overseas International earlier this year. We are ensuring our company's competitive edge as we continue to integrate all six subsidiaries. We expect that the packaged tours segment will drive the growth of UTVG's air ticketing and hotel reservation segments in the future."»

Unwinding this acquisition will save UTVG $4,289,000 in cash and the issuance of 1,053,800 new shares, almost completely unwinding the dilutive effect of the announced financing.

3) The revision of the 2007 guidance

«As a result of this development, management is marginally lowering its previously issued fiscal 2007 financial guidance. Revenue is now expected to come in between $41 million and $42 million, a year-over-year increase of 310% to 320% from $10.01 million reported in fiscal 2006. Net income is now expected to be in the range of $8.3 million to $8.5 million, or $0.22 to $0.23 earnings per share, an increase of 225% to 233% from $2.55 million reported in fiscal year 2006. The company plans to issue its fiscal 2007 operating results by the end of March.»

The prior guidance was:

«Fiscal 2007 revenue is expected to come in between $44 million and $45 million, an increase of 340% to 350% from $10.01 million reported in fiscal 2006. This guidance is up from the previously issued range of $35 million to $36 million reported in August 2007 for FY'07. Net income for fiscal 2007 is now expected to be in the range of $8.5 million to $8.8 million, or $0.23 to $0.24 earnings per share, an increase of 233% to 245% from $2.55 million reported in fiscal year 2006. This is an increase from the range of $8.2 million and $8.5 million previously announced for FY'07 in August 2007.»

So, the revenue guidance declined $3 M and EPS is now expected to be $0.225 instead of $0.235. One penny less of EPS translated into a $0.43 decline in the share price.

I continue to see UTVG trading at 11.4 times earnings while it grows them by ... a lot!

Due to the unwinding of the Tianjin Golden Dragon Acquisition I'll shave $0.04 EPS of my 2008 estimate, cutting it to $0.45. According to my estimate UTVG is trading at 5.7 times forward earnings and I find this very attractive.

On this basis I'll continue holding UTVG.OB for the long term.

The February 7 sell off didn't get any follow through, as I expected.

I wonder if UTVG will provide 2008 guidance when they release 2007 full year results. If they do and their expectations match mine, that would surely put UTVG.OB on fire, since I'm expecting EPS to double in 2008 versus 2007, to about $0.45.

UTVG trades at 6.3 times my 2008 EPS estimate. I forecast 100% growth, driven by acquisitions and the 2008 Beijing Olympics. So there's absolutely no doubt that there's no way I could sell UTVG here. It would be illogical, I would be insane.

I'll just hold.

Obviously something is really wrong here and everyone knows but us.

Hawk Associates.

According to people posting at investorvillage, the stock was sold by CHFI.  One person commented:
"The pps of UTVG was $.60 when CHFI received 1,200,000 shares for surety guarantee services July 12 2006."

This was also posted:

http://sec.edgar-online.com/2006/11/14/0001188112-06-003451/Section8.asp

Note F - Marketable Securities



As of September 30, 2006, the Company's marketable securities consisted of
shares the Company has received as payment for providing surety guarantee
services to SMEs including 2,956,795 shares of China 3C Group ("CHCG"),
1,200,000 shares of Universal Travel Group ("UTVG"), and 480,000 shares of Home
System Group ("HSYT").


The 2,956,795 shares of CHCG represent approximately a 6% interest in the
current issued and outstanding common shares of CHCG. The CHCG shares were
received as payment for surety guarantee services provided for CHCG's December
21, 2005 merger transaction with Capital Future Development Limited. The closing
price of the CHCG shares was $0.10 per share on December 21, 2005. As of
September 30, 2006, the closing price of shares of CHCG common stock was $1.83
per share. Since the CHCG shares are reasonably expected to qualify for sale
within one year, the securities are not considered restricted for the purposes
of SFAS No. 115, and, accordingly, quoted market prices have been used to
determine fair value.


The 1,200,000 shares of UTVG represent approximately a 6% interest in the
current issued and outstanding common shares of UTVG. The UTVG shares were
received as payment for surety guarantee services provided for UTVG's July 12,
2006 merger transaction with Full Power Enterprise Global Limited. The closing
price of the UTVG shares was $0.60 per share on July 12, 2006. As of September
30, 2006 the closing price of shares of UTVG common stock was $0.83 per share.
Since the UTVG shares are reasonably expected to qualify for sale within one
year, the securities are not considered restricted for the purposes of SFAS No.
115, and, accordingly, quoted market prices have been used to determine fair
value.


The 480,000 shares of HSYT represent approximately a 6% interest in the current
issued and outstanding common shares of HSYT. The HSYT shares were received as
payment for surety guarantee services provided for HSYT's August 4, 2006 merger
transaction with Oceanic International (Hong Kong) Limited. The closing price of
the HSYT shares was $1.00 per share on August 4, 2006. As of September 30, 2006
the closing price of shares of HSYT common stock was $0.51 per share. Since the
HSYT shares are reasonably expected to qualify for sale within one year, the
securities are not considered restricted for the purposes of SFAS No. 115, and,
accordingly, quoted market prices have been used to determine fair value.


A summary of the above marketable securities is as follows:


September 30, 2006
Cost: CHCG $ 295,680
HSYT $ 480,000
UTVG $ 720,000
Add: Unrealized Gain $ 5,156,055
Fair Market Value $ 6,651,735

Quote from: soxguy on March 03, 2008, 02:51:48 PM
Obviously something is really wrong here and everyone knows but us.

It's not that obvious. Pick AOBO.OB for example (later AOB):

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=43909;image)

But there was nothing wrong, the market was just inefficient ...

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=43910;image)

... and investors following the chart, believing others knew something they didn't, just missed a 10 fold advance in a couple of years.

This is just one example and it doesn't prove anything, but it goes to show that your assumption that something is fundamentally wrong with UTVG.OB because of the market action isn't that obvious because, many times, investors don't know what they're doing and are just motivated by fear and greed.

As I see it, UTVG.OB may even go down to $1-$1.5, but it will still be worth $10 in 12 months time. My expectation comes from the $0.22-$0.23 per share the company will earn in 2007 and I expect this to double in 2008, because acquisitions will contribute to a full year and they should keep growing strongly as they have been doing, also because of the 2008 Beijing Olympics.

I don't pay any attention to the chart and I'll hold UTVG.OB for the long term. 

I have the habit of comparing companies. When a big one like Sprint goes into a prolonged tailspin,management is blamed. Now UTVG goes into a decline, it's due to  the market not recognizing value. I guess it's comparing apples to oranges,but i'm frustrated nevertheless. Let's hope(there's that word again) that things work out.

QuoteWhen a big one like Sprint goes into a prolonged tailspin,management is blamed. Now UTVG goes into a decline, it's due to  the market not recognizing value.

I think you agree with me when saying there are a lot more and profound pricing inefficiencies in micro caps than in large caps.

For example, you have just one firm providing coverage for UTVG.OB (by the way, nice $0.42 EPS expected for 2008 (http://finance.yahoo.com/q/ae?s=UTVG.OB) - UTVG.OB closed at 5 times that estimate) and with S you probably have millions of shareholders and 27 analysts covering the company (http://finance.yahoo.com/q/ae?s=s).

QuoteI guess it's comparing apples to oranges,but i'm frustrated nevertheless.

Me too, I didn't sleep last night, thinking "What shall I do? What shall I say?"

QuoteLet's hope(there's that word again) that things work out.

There are problems and let me share them with you right away:

1 - UTVG is perhaps growing too fast and management may not have the appropriate skills to integrate all those acquisitions;
2 - Their accountants are weak. They start accounting the acquisitions from the beginning of quarters, instead of the exact date of the acquisitions, as most companies do and GAAP rules mandate;
3 - I think the number of shares outstanding on a fully diluted basis is perhaps 10-20% higher than the reported numbers. This is because I'm not seeing them counting some shares to be issued due to acquisitions;
4 - It is possible that there will be further dilution because the company has just $2.7 M in cash.

So, as these problems maybe will be disclosed, we have higher than normal headline risk with this company (and the Main has been suffering from this).

But, even with all this, I still see UTVG.OB making $0.40 - $0.50 EPS in 2008 and probably something like $0.7 - $0.8 in 2009. The stock is way too cheap.

QuoteI have the habit of comparing companies.

Yes, let's compare apples to apples then. Take a look at UTVG's big brother, CTRP:

«Ctrip.com International, Ltd. (CTRP) and its subsidiaries provide travel related services including hotel reservation, air-ticketing, packaged-tour services, as well as Internet advertising and other related services.»

Awesome chart by the way:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=43954;image)

This company, which does basically the same thing as UTVG, is a $3.8 B market cap company. It's price to sales ratio is 23, while UTVG's is 2. CTRP's p/e is 70, UTVG's is 9.6.

So far I would have done a lot better to just go with the leader and forget valuation.

We'll see what the the long term brings, but I'll continue holding UTVG.OB, because I maintain what I wrote yesterday:

QuoteAs I see it, UTVG.OB may even go down to $1-$1.5, but it will still be worth $10 in 12 months time.

UTVG are obviously concerned about the stock price decline as well. Just missing  2008 guidance really......

Universal Travel Group Management Reiterates 2007 GuidanceLast update: 3/5/2008 8:00:12 AMNEW YORK & SHENZHEN, China, Mar 05, 2008 (BUSINESS WIRE) -- Universal Travel Group (UTVG), a fast growing travel services provider in China specializing in packaged tours, air ticketing, hotel reservation and air cargo transportation, said today that it is comfortable with the company's 2007 guidance issued on February 7, 2008. Revenue is expected to come in between $41 million and $42 million, a year-over-year increase of 310% to 320% from $10.01 million reported in fiscal 2006. Net income is expected to be in the range of $8.3 million to $8.5 million, or $0.22 to $0.23 earnings per share, an increase of 225% to 233% from $2.55 million reported in fiscal year 2006. Universal Travel Group's Chairwoman and CEO, Jiangping Jiang, said, "We are pleased with Universal Travel's operations and the company is continuing to perform within our expectations. We plan to issue fiscal 2007 operating results by the end of March 2008."

QuoteUTVG are obviously concerned about the stock price decline as well.

Indeed Aussie, they just reiterated 2007 guidance:

Universal Travel Group Management Reiterates 2007 Guidance (http://biz.yahoo.com/bw/080305/20080305005593.html?.v=1)
Business Wire(Wed 8:00am)

QuoteJust missing  2008 guidance really......

Sorry, I don't understand, what do you mean?

Thanks :)

Quote from: David Randolph on March 05, 2008, 08:28:36 AM

QuoteJust missing  2008 guidance really......

Sorry, I don't understand, what do you mean?

My point was just that reiterating already public domain information is not really going to make any material difference to the stock price. That will require new information or guidance.

QuoteMy point was just that reiterating already public domain information is not really going to make any material difference to the stock price. That will require new information or guidance.

Thanks for the explanation AussieTrader :)

You were right, reiterating the previously announced 2007 guidance didn't make any difference in the share price, at least not until now.

I wonder if they'll provide 2008 guidance when they report the 2007 full year results in a couple of weeks?

I'm still not giving up on UTVG.OB. Here the micro-economic case (I mean, the specific company's fundamentals and valuation) and the macro-economic case (Chinese tourism sector and the 2008 Beijing Olympics) are still aligned and pointing North.

CTRP is one of the very few bullish stocks outthere and UTVG is in the same sector and growing a lot faster, I don't understand, at least not now, why this stock isn't moving up. I recognize some internal controls weaknesses, but that shouldn't be enough for investors to totally disregard this company's growth potential and value it at less than 10 times 2007 and about 6 times 2008 estimated EPS.

I still feel UTVG.OB is down due to a market inefficiency, which should be corrected when more information (like the 2008 guidance or the 2007 10-Q SEC form) becomes available.

I'll keep holding UTVG.OB.

After experiencing what's happening with UTVG.OB, a stock trading at 7.8 times trailing earnings and 4 times 2008 estimated EPS, one needs to raise serious doubts about the validity of the p/e ratio as a good indicator of a stock's future price.

I mean, everybody holding this stock knows it is very cheap, but they sell it anyway. The trend is a more powerful motivation to act or not to act than value, at least over the short and medium term.

Obviously I'm very disappointed about all this and feel somewhat lost, not knowing what to think or believe. It is also obvious that you don't pay to have this kind of advice or self doubt.

I don't know which lesson will I get from UTVG.OB, there can be several:

1 - Fundamentals are important just for a three year investment perspective and stocks can always get much cheaper before the value comes up;
2 - Fundamental value can prevent a stock from sliding much more, but that doesn't happen with micro-cap stocks or OTCBB traded stocks, because value players don't pay attention to them;
3 - If the fundamentals say "buy" and yet the chart (or the market) says "sell", then the market is right, not my personal assessment of the fundamentals.

This 3rd one seems to be the easy way out, but if one recalls the internet bubble, when stocks without any value kept going up a lot just before they blew up to zero. Then, even though it took a couple of years, fundamentalists were right and technicians ... well, they could be right too if they followed the trend, but only the good ones do that, the others keep looking for "oversold conditions".

Enough about UTVG.OB and theories. I'll keep holding the stock just to see and feel where was my mistake.

Hi David.

I don't think that the share price is a result of the company's performance or outlook but solely reflects the company's lack of credibility in the investment community. As a Chinese company they have to be more holy than the Pope to earn the trust of an investment community that on a daily basis is being bombarded with messages about Chinese companies reaping off US investors. UTVG has unfortunately made itself very vulnerable for this kind of mistrust by:

• Announcing a deal that later falls a part
• Restate earnings
• Revise guidance
• Making unexpected financing deals

It will take time for them to win the trust of the market and therefore time before the stock price will reflect the fundamentals of the company. And this will only happen if they actually deliver on the promises.

If you are convinced that the company is running a good and healthy business (and I haven't seen any information indicating the opposite) then I would certainly keep holding the stock. The fundamentals seems stellar.

Just my 2 Euro cents  :)

Quote from: Michael on March 11, 2008, 09:16:41 AM
Hi David.

I don't think that the share price is a result of the company's performance or outlook but solely reflects the company's lack of credibility in the investment community. As a Chinese company they have to be more holy than the Pope to earn the trust of an investment community that on a daily basis is being bombarded with messages about Chinese companies reaping off US investors. UTVG has unfortunately made itself very vulnerable for this kind of mistrust by:

• Announcing a deal that later falls a part
• Restate earnings
• Revise guidance
• Making unexpected financing deals

It will take time for them to win the trust of the market and therefore time before the stock price will reflect the fundamentals of the company. And this will only happen if they actually deliver on the promises.

If you are convinced that the company is running a good and healthy business (and I haven't seen any information indicating the opposite) then I would certainly keep holding the stock. The fundamentals seems stellar.

Just my 2 Euro cents  :)

Great post Michael, thanks :)

I was very naive on this one (well, not just this one), because I was so focused on the very long term that I opted to ignore evidence of the bearish case for this stock.

There was a moment, at the 3rd quarter results conference call, when I should have turned very suspicious about this company, but I didn't thought it was all that relevant ... this is because I didn't value "confidence" or "reliability" as high as I should.

When asked, management said they were counting revenues and earnings of their newly acquired companies from the beginning of the quarters, not the exact date of the acquisitions as GAAP mandates and all other companies do.

This means they'll probably have to restate results again. Anyone paying attention to this detail knows this is coming ...

Anyway, I wad stupid not to pay attention to it and now I'm losing 73.5% (what???) on this stock. I guess it's all priced in already.

This is embarrassing :-[

I'll hold UTVG. 

UTVG: Q4 EPS 11c; Rev $9.95M Beats 9c Est
Monday , March 31, 2008 12:28ET

QUARTER RESULTS
Universal Travel Group (UTVG) reported Q4 results ended December 2007. Q4 Revenues were $9.95M; MISSING revenue consensus by -35.39%. Q4 EPS was 11c; BEATING earnings consensus by +22.22%.

Q4 RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE
----------  ------------  ------------  ----------  ------------  ----------
Revenues:         $9.95M           N/A              N/A       $15.40M     -35.39%
----------  ------------  ------------  ----------  ------------  ----------
EPS:                 11c                 N/A                N/A            9c                +22.22%
----------  ------------  ------------  ----------  ------------  ----------


YEAR-END RESULTS
Co. also reported Year-End results ended December 2007. FY Revenues were $44.29M; +342.46% vs yr-ago; BEATING revenue consensus by +4.95%. FY EPS was 26c; +271.43% vs yr-ago; BEATING earnings consensus by +4.00%.

FY RESULTS      Reported      Year-Ago     Y/Y Chg      Estimate    SURPRISE
----------  ------------  ------------  ----------  ------------  ----------
Revenues:        $44.29M       $10.01M    +342.46%       $42.20M      +4.95%
----------  ------------  ------------  ----------  ------------  ----------
EPS:                 26c            7c                  +271.43%           25c      +4.00%


......
Revenues for the year ended December 31, 2007 ("fiscal 2007") were $44,294,853 compared to $10,013,788 for the year ended December 31, 2006 ("fiscal 2006"), an increase of approximately 342%. This increase is attributable to the Company's organic growth as well as its expansion into air cargo transportation, packaged tours services and hotel booking services, through the acquisitions of SSD, XGN, SLB and FOI.

Gross Profit for fiscal 2007 was $14,775,841 compared to $5,419,412 for fiscal 2006, an increase of approximately 173%. The increase in gross profit reflects the Company's aggressive growth strategy as exemplified by continued growth in its traditional customer base and the acquisitions of SSD, XGN , SLB and FOI.

Gross profit margin for fiscal 2007 was 33% compared to 54% in fiscal 2006. This decrease is primarily due to the fact that the accounting treatment for the operations of SSD, XGN and SLB and other new operations undertaken by the Company require the deduction of cost of service to derive gross profit as opposed to the businesses the Company was engaged in during the fiscal year 2006 which recorded commissions earned on airline bookings and whose cost of service was minimal as compared to the commissions earned.

Selling, general and administrative expenses for fiscal 2007 totaled $3,229,526 compared to $1,353,434 in fiscal 2006. S, G & A was approximately 7% of revenues in fiscal 2007 as compared to 14% for fiscal 2006. The increase in S,G & A reflects the acquisitions of SSD, XGN , SLB and FOI, and the decrease in S,G & A as a percentage of revenues reflects the fact that certain expenses did not grow proportionate with the increase in the Company's revenues.

Stock based compensation reflects shares issued to certain consultants who, among other things, assisted the Company in its efforts to become publicly traded in the United States. The Company anticipates that it will not rely as much on such consultants in the future and that the amount of stock based compensation will decrease. The Company anticipates that it will look to its directors, counsel and other third parties to provide the services previously rendered by these consultants and that the fees payable to its directors and counsel will increase to reflect the added services rendered.

Interest expense for fiscal 2007 totaled $80,847 compared to $2,754 for fiscal 2006. The significant increase in interest expense reflects the fact that the Company financed a portion of the cost of its acquisitions with cash borrowed from commercial banks.

Net income was $8,695,894 or 20% of Revenues for fiscal 2007, compared to $2,558,478 or 26% of Revenues for fiscal 2006. The increase in net income reflects the continued growth in the Company's business and the acquisitions of SSD, XGN, SLB and FOI. The decrease in net income as a percentage of Revenues reflects the fact that the businesses acquired generally had lower margins than the Company's historical operations.

Thanks for posting UTVG's results la-onda :)

• Universal Travel Group Announces 2007 Annual Financial Results (http://biz.yahoo.com/bw/080401/20080331006801.html?.v=1)
Business Wire (Tue 2:13am)

$0.26 EPS in 2007 was higher than the company's guidance. UTVG closed yesterday at $1.57/$0.26 = 6 times earnings, while EPS grew from $0.08 in 2006 to $0.26 in 2007.

The market cap is ($8,695,894/$0.26)*($1.57) = $52.5 M.

I hoped UTVG would provide 2008 guidance, but they didn't. Maybe just at the conference call.

We know there are accounting issues with this company which weren't fully disclosed. But that will probably have implications only for the past (I guess that somewhere down the road they'll have to restate earnings - mostly due to timing issues).

I maintain that UTVG will earn something like $0.4 and $0.5 per share in 2008 (also considering the Beijing Olympics boost). This should put the stock in the $7 - $10 level under normal market conditions.

We'll see what the future brings ... I'll continue holding UTVG.OB, despite the huge loss the Main has on this holding.

Volume has increased since the earnings release, but price still didn't move.

I found a post with some highlights from the conference call:

CC highlights (http://investorshub.advfn.com/boards/read_msg.asp?message_id=28088994)

CTRP should really acquire UTVG.OB. It would be cheap for them ... anyway, I hope not, since probably the price would be a lot less than I paid.

UTVG: Volume Spike; 44% > 20-adsv, Stock -8.13%
Thursday , April 03, 2008 14:05ET

This is the 1st VOLUME alert for UTVG in the past 7 calendar days.

Trading for Universal Travel Group (OTCBB: UTVG) has been heavier than usual in today's session. By 14:05 ET, the stock had already traded 284,130 shares via 155 trades. The cumulative volume is 44.27% above its 20-day average of 196,940. Normally the stock experiences around 116 individual trades per session.

So far, today's volume surge has caused a net decline in UTVG's stock price. At the time of this alert, the stock was trading at $1.470, down $-0.130 (-8.13%).

One year ago, the Company's shares closed at $1.670. The price has declined more than 11 percent since then.

Over the last 10 trading session UTVG has traded in a range between $1.500 and $1.700 and is currently trading 74.30% below its 52-week high of $5.720 set on October 31,2007 and 1.38% above its 52-week low of $1.450 from March 11,2008.

In the previous 3 sessions, UTVG trading has displayed a mixed trend. Closing results have been as follows:

April 02, 2008 --- closed at $1.600 down $0.070 (-4.19%) on 327,900 shares
April 01, 2008 --- closed at $1.670 up $0.100 (+6.37%) on 390,300 shares
March 31, 2008 --- closed at $1.570 up $0.060 (+3.97%) on 380,300 shares

???

I try not to let stocks get me down, but there is a certain element of sadness to looking at this chart, specially cause I bought more after the CC lol. ??? ::)

Quote from: tokyopua on April 04, 2008, 03:09:51 AM
I try not to let stocks get me down, but there is a certain element of sadness to looking at this chart, specially cause I bought more after the CC lol. ??? ::)

Indeed, UTVG.OB is hard to swallow. I've lost any hope I had left ... I'm losing 75% on this one now and have just 2.4% of capital invested.

Instead of selling to preserve the 2.4% of capital, I'll keep the stock in the Main Portfolio. This holding will be used to remind myself that, regardless of the "fundamentals", everything is possible in the stock market.

UTVG grew EPS 225% in 2007 versus 2006 and it is expected to almost double EPS in 2008. Yet it trades at, let me see ... 5.4 times 2007 EPS of $0.26.

We know there are some accounting irregularities in the company's statements, but not all that material in my view. Ok, instead of $0.26 EPS, probably if everything was made exactly by the US rules, it would then be $0.20 ... and $0.40 in 2008.

The market says this story will end in the Pink Sheets or with UTVG delisted due to fraud or something like that ... at least the valuation says that will be the case, or else how come UTVG would be this cheap? It is also possible, even though less likely, that the market is just inefficient in pricing UTVG ... or else people just know there will be bad news somewhere down the line and just dump the stock until the truth is revealed.

UTVG should come out immediately and restate earnings again.

I was so stupid not to pay enough attention to material weaknesses in financial reporting.

I won't repeat this mistake in the future.

The lesson learned is: if there are accounting deficiencies investors will always put a severe discount in the valuation of the company, they won't believe the numbers. I'll avoid any stock where investors suspect there are accounting irregularities.

realcoolhead was right since the beginning about the OTCBB + Chinese combination, hats off to him.

 :-\ :-X

> The market says this story will end in the Pink Sheets or with UTVG delisted due to fraud or something like that ... at least the valuation says that will be the case, or else how come UTVG would be this cheap? It is also possible, even though less likely, that the market is just inefficient in pricing UTVG ... or else people just know there will be bad news somewhere down the line and just dump the stock until the truth is revealed.

You are really just guessing.  For all you know, there could just be one or two big share holders who really need the money now - and it could have nothing to with the company.  And that selling pressure may have led others to decide to sell as they saw the price falling, so it builds itself.  I think this is just a likely as anything you've guessed.  If you have some reason to think I'm wrong, then please tell me as I have a good deal of money in this stock.

I am no expert but purely from a very short term technical view it looks very bullish.  :-\

I found this explanation and I hope it helps someone although I personally am not sure.

"If a price touches or penetrates the upper Bollinger Band and the RSI is above 70 (possibly approaching 80) the trend may reverse and decline. On the other hand, if a price touches or penetrates the lower Bollinger Band and the RSI is below 30 (possibly approaching 20) it indicates the trend may reverse and move upward."
In "Technical Analysis Explained", Martin J. Pring suggests that you can determine whether a price reversal is imminent by observing how price behaves following the initial Bollinger band crossing. He states: "If the price makes several failed attempts to cross or touch a band, but in doing so traces out a classic reversal price formation, you can expect a price trend reversal.".

In "The Master Swing Trader", Alan S. Farley suggests that a move that leads to a price bar extending over 50% beyond the Bollinger band is over-extended and encountering resistance and thus overdue for a reversal. This is the interpretation that Recognia implements.

Sure. I don't think anyone would argue the reversal. but what about questioning how long will it take before the reversal and when it does..will it come back to any decent short-term bullish number before it continues on it's downward spiral...

In a years time we could all be looking back on this as one of those little  low end blips like in the charts David has posted for other stocks like ANGN, so given most of the capital is already lost anyway it makes sense to wait and see if the original hypothesis was correct.

As for not buying BB stocks again, I think maybe that makes sense for investing, but for trading I have to argue that a lot of the 3SOF capital now being invested was gained from well timed BB stock trades.  So, for the technimental Portfolio, I hope we will still trade those, as they can be very high profit trades.

 >:D
Universal Travel Group Announces Revenue and Earnings Guidance for 2008
Monday , April 21, 2008 10:02ET

SHENZHEN, China, Apr 21, 2008 (BUSINESS WIRE) -- Universal Travel Group Inc. (OTCBB: UTVG) ("Universal Travel Group" or the "Company"), a fast growing comprehensive travel services provider in China specializing in online and customer representative services to the travel service industry offering packaged tours, air ticketing, hotel reservation and air cargo transportation, today announced its 2008 full year earnings guidance.

After careful evaluation of the impact of the severe snowstorms that affected China during the first quarter of 2008 and taking into consideration the positive impact of the Beijing Olympics on air travel and lodging, the Company expects annual Revenue to be between $69 million and $73 million, a year-over-year increase of 55.8% to 64.8% from $44.3 million in 2007. Net income for 2008 is expected to be in the range of $12 million to $14 million, not including stock based compensation for 2008, an increase of 27.7% to 48.9% from $9.4 million in 2007 not including stock based compensation for 2007.

Good news at last!

38,110,517 shares

assuming 950k in stock based compensation reduction (avg. of last two years)

13 million net income guidace; adjusted for stock based comp = about 12 million net income

12/38 = $0.31 EPS * 5 PE (OTCBB China gets about 5) = $1.55.

That's about EPS of $0.08 per quarter.  Where is the growth?  What happens after the Olympics?

Momentum is back in this baby!  Not sure if I will keep it as a long term investment, but glad at least I didnt sell at the absolute bottom like I did with CHME lol. 

Break the trend line and it could get interesting.

UTVG: Jumps +8.70%; Vol +92%; Last 90 Min of Trading
Monday , April 21, 2008 16:21ET

During the last 90 minutes of today's session, shares of Universal Travel Group (OTCBB: UTVG) demonstrated a strong UPWARD close relative to its 13:30 ET statistics. "Strong Closers" are determined by proprietary Knobias calculations performed during the last segment of each trading day.

sym: UTVG      @13:30 ET        @CLOSE      % CHANGE
----------   -----------   -----------  ------------
PRICE              $1.61         $1.75        +8.70%
VOLUME           226,041       432,898       +91.51%
#TRADES              129           227       +75.97%
DAY-HI             $1.72         $1.77       LATE-HI
DAY-LO             $1.48         $1.48           N/A

TODAY'S RAiDAR HEADLINES for UTVG:

04/21/2008 09:02 Universal Travel Group Announces Revenue and Earnings Guidance for 2008 - bw

UTVG could go up to the resistance around $2.50

QuoteYou are really just guessing.  For all you know, there could just be one or two big share holders who really need the money now - and it could have nothing to with the company.  And that selling pressure may have led others to decide to sell as they saw the price falling, so it builds itself.  I think this is just a likely as anything you've guessed.  If you have some reason to think I'm wrong, then please tell me as I have a good deal of money in this stock.

Yes, this can be the truth Jim, I hope so. But it's also true that they counted the contribution of acquisitions from the start of each quarter, instead of the exact date of the acquisitions like all other publicly traded companies do.

Anyway, this is about the past, since 2008 results won't be affected by this. Everything should come out clean in 2008 and maybe nobody will care about the past anyway (I hope so).

Quote12/38 = $0.31 EPS * 5 PE (OTCBB China gets about 5) = $1.55.

"OTCBB China gets 5" ... regardless of the company, the growth rate or other fundamentals? Perhaps that's true, but I find it odd.

As you know the company provided 2008 guidance yesterday:

Universal Travel Group Announces Revenue and Earnings Guidance for 2008 (http://biz.yahoo.com/bw/080421/20080421005823.html?.v=1)
Business Wire (Mon 10:03am)

Midpoint of the 2008 guidance implies 38.8% growth in net income. Unfortunately management didn't guide on EPS, which would bring more confidence there wouldn't be significant dilution. This way nobody knows to what EPS number will this net income translate to.

The stock reacted with a 19% jump. Of course, traders see a $56 M market cap providing guidance of $13 M net income and jump in the band wagon.

I don't understand the market ... did anyone think there wouldn't be growth in 2008? Why did UTVG.OB came down so much, to a p/e of less than 5?

I'll just keep holding UTVG.OB and send the newsletter.

Quote from: David Randolph on April 22, 2008, 09:23:24 AM
"OTCBB China gets 5" ... regardless of the company, the growth rate or other fundamentals? Perhaps that's true, but I find it odd.

The stock reacted with a 19% jump. Of course, traders see a $56 M market cap providing guidance of $13 M net income and jump in the band wagon.

I don't understand the market ... did anyone think there wouldn't be growth in 2008? Why did UTVG.OB came down so much, to a p/e of less than 5?

1)  Ok, so there is no detriment to being a China BB stock?  Fine, give it a PE of 20, something many Nasdaq stocks cannot acheive, even with growth.  That way you can justify buying at $4 or whatever you did.  The fact is that China BB translates into great risk.  That's why the PE of 5.  Remember CHID, ETLT, etc.?

2)  The guidance was not a net income of $13 million.  It was approximately $13 million minus stock based compensation, which has averaged about $1 million, the last two years.  So real net income will be about $12 million.

This is my last post on any of your stock picks.  Please remove my "premium" status.  Good luck.

QuoteThis is my last post on any of your stock picks.  Please remove my "premium" status.  Good luck.

What a day ... goodbye buddjas1.

Today sucked for UTVG, but if China market being up 9% doesnt make UTVG run then I dont know what will.

I am not one of the "investors" that want to invest at any time, I understand that sometimes the best thing to do is stay in cash or in the sideline...but David, you should really do something for the Main Portfolio...it is down 25% and continue to be down, no sign of waking up.

You along with AussieTrader are a good Team, so all the best in taking some long term investments.

ciao,

Tera

Guess I gotta be happy with a hammer in UTVG, maybe the trend goes up from here. 

good question terainvestment. An other thing is why not increase in the techportfolio the holdings from 5 picks to 10 picks? I mean except nvtl it started pretty well. And I like the strategy. Hold the losses small and cut it immediately, while let profit run. What you guys think with a increase of the holdings in that portfolio? What do you think about it David?

greetings
blue

QuoteI am not one of the "investors" that want to invest at any time, I understand that sometimes the best thing to do is stay in cash or in the sideline...but David, you should really do something for the Main Portfolio...it is down 25% and continue to be down, no sign of waking up.

What I've done lately, things like selling SYX, MALL and TBSI, for example, not only didn't help, they made things worse. Whenever I see the opportunity I'll do something, but taking actions just because the portfolio is down probably won't work.

QuoteYou along with AussieTrader are a good Team, so all the best in taking some long term investments.

Thanks Tera.

Quote from: tokyopua on April 24, 2008, 07:47:13 PM
Guess I gotta be happy with a hammer in UTVG, maybe the trend goes up from here. 

Volume was good enough:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=45138;image)

Quote from: bluesea on April 25, 2008, 02:31:50 AM
good question terainvestment. An other thing is why not increase in the techportfolio the holdings from 5 picks to 10 picks? I mean except nvtl it started pretty well. And I like the strategy. Hold the losses small and cut it immediately, while let profit run. What you guys think with a increase of the holdings in that portfolio? What do you think about it David?

greetings
blue

I've been thinking about it and I believe it's a good idea. But I want to give more time to the strategy ... I want to learn some more about it before increasing the number of potential trades. But that's in the agenda, thanks for the suggestion bluesea :)

Investing legend Jim Rogers bullish on China again and tourism and agriculture in particular:

http://www.bloomberg.com/apps/news?pid=20601012&sid=aB4sNJlA4AHo&refer=commodities

Maybe this portends well for UTVG, certainly hope so. 

FXI looks like an inverse head and shoulder breakout to the upside to me, so also bullish for China from a technical perspective. 

Nice day.  Lets take out 1.80 and get this baby running above the 50sma next!

QuoteInvesting legend Jim Rogers bullish on China again and tourism and agriculture in particular:

http://www.bloomberg.com/apps/news?pid=20601012&sid=aB4sNJlA4AHo&refer=commodities

Maybe this portends well for UTVG, certainly hope so.

Yes, stocks like CTRP, because they're large and credible, have been benefiting from the growth in tourism in China.

UTVG.OB has its own problems, valued at just 4.7 times 2008 net income (according to management's guidance of $12 M). CTRP is valued at 40 times estimated EPS for 2008, or about 8 times more than UTVG.

It seems the stock is putting on a bottom ... I'll keep holding, I think the opportunity to cut a loss would have to be taken much higher, now it is too late, I'll just keep holding the 2.8% of the Main in UTVG.

QuoteIt seems the stock is putting on a bottom ...

Hi Tokyo, UTVG.OB closed just a bit above the 50 days SMA, which didn't happen for about 6 months.

I found an analysis made by a professional analyst, he was quite upbeat on the stock at $3.35 (attached below).

This analysis will be useful for us to compare his quarterly estimates with actual results.

Quote from: David Randolph on May 01, 2008, 06:12:51 AM

QuoteIt seems the stock is putting on a bottom ...

Hi Tokyo, UTVG.OB closed just a bit above the 50 days SMA, which didn't happen for about 6 months.

I found an analysis made by a professional analyst, he was quite upbeat on the stock at $3.35 (attached below).

This analysis will be useful for us to compare his quarterly estimates with actual results.

I just got home from seeing IronMan (which totally rocks BTW) so I will look at the report later, thanks for attaching it though.

For now I can say that this pattern looks a bit like a truncated Big W pattern and if it acts like that to $3 at least short term.  $2.21 and I break even, would be quite nice to turn this into a profit again!

QuoteFor now I can say that this pattern looks a bit like a truncated Big W pattern and if it acts like that to $3 at least short term.  $2.21 and I break even, would be quite nice to turn this into a profit again!

Yeah, that would be great. The Main's entry price is "a bit" higher, $5.65 ::)

While I could understand other low p/e stocks falling (because the "e" could turn negative), on UTVG that was very unlikely because if there's something growing fast in the World right now is tourism and movement of people in China.

The explanation could be accounting and internal control weaknesses, mostly derived from the several acquisitions the company made.

Hopefully, going forward and without acquisitions (just organic growth), the picture will get clearer and UTVG.OB can be valued according to its fundamental trends, which would be several fold more than what it is now.

Anyway, nice 12.5% jump yesterday, I'll keep holding, we'll see what the future brings.

 >:D >:D
just nice

Quote from: David Randolph on May 02, 2008, 07:10:23 AM

QuoteFor now I can say that this pattern looks a bit like a truncated Big W pattern and if it acts like that to $3 at least short term.  $2.21 and I break even, would be quite nice to turn this into a profit again!

Yeah, that would be great. The Main's entry price is "a bit" higher, $5.65 ::)

While I could understand other low p/e stocks falling (because the "e" could turn negative), on UTVG that was very unlikely because if there's something growing fast in the World right now is tourism and movement of people in China.

The explanation could be accounting and internal control weaknesses, mostly derived from the several acquisitions the company made.

Hopefully, going forward and without acquisitions (just organic growth), the picture will get clearer and UTVG.OB can be valued according to its fundamental trends, which would be several fold more than what it is now.

Anyway, nice 12.5% jump yesterday, I'll keep holding, we'll see what the future brings.

It does seem that whatever the name of the pattern, UTVG wants to make a mirror image of the left side of the cup shape it is making, seems it is going back up pretty much the same way it came down from $3.0.  That is why I felt short term it hits $3.00, could get there even by Friday next week though 2.9 enters the first congestion zone so maybe it just gets to $2.9. 

However, after that it still would likely have legs to get back to the main entry price at least by the olympics.  Of course, we just have to wait and see, for now its just a relief to all holding to see it not go down any further lol, it sure had a lot of fakeouts in that direction.

David, I have a question about charting that has never really been answered fully for me, I was wondering what your take is on drawing trend lines on logarithmic plots vs. normal plots.

The reason I ask is that if I chart UTVG on a normal chart, then we broke above a 6 month descending trendline on 4/29, in fact UTVG gapped up that day and left a nice rising window.  But if I chart on a log chart, then it looks like it wasnt until yesterday 5/2 that we broke above the descending trend line.

Whats your take?

Another couple of weeks of a 14% advance per day and we're back in business!!  :) >:D

Unbelievable...now I am only down 49.4% on this one. ;D :o

Hopefully it keeps runnin'

QuoteIt does seem that whatever the name of the pattern, UTVG wants to make a mirror image of the left side of the cup shape it is making, seems it is going back up pretty much the same way it came down from $3.0.  That is why I felt short term it hits $3.00, could get there even by Friday next week though 2.9 enters the first congestion zone so maybe it just gets to $2.9.

Well, yesterday's high was pretty close at $2.86. Did you take profits or you're still holding?

QuoteHowever, after that it still would likely have legs to get back to the main entry price at least by the olympics.  Of course, we just have to wait and see, for now its just a relief to all holding to see it not go down any further lol, it sure had a lot of fakeouts in that direction.

Indeed, it was impressive. Even though the 2008 guidance said, at the time, that UTVG.OB was trading at 4.7 times earnings while growing them by about 38%, there was still a lot of doubts about which direction the stock would take ... the reaction to the information wasn't immediate. I wonder what people who sold at $1.12 less than a month ago are thinking?

I've been seeing low p/e stocks (some of them I've sold, like SYX and MALL :'(), coming back pretty aggressively. Maybe the strategy of buying cheap stocks wasn't all that bad ... and I just had weak hands ???

QuoteDavid, I have a question about charting that has never really been answered fully for me, I was wondering what your take is on drawing trend lines on logarithmic plots vs. normal plots.

Well, there's not a definitive answer at least I don't have one. When making technical analysis I like to keep it simple. This is why I use simple moving averages instead of exponential moving averages and normal scale charts instead of semi-log charts.

However, it is true that after a big decline, if one uses normal scale, all descending trendlines will eventually be broken to the upside, so that isn't a valid bullish technical signal. Semi-log scale is more appropriate in those cases.

QuoteThe reason I ask is that if I chart UTVG on a normal chart, then we broke above a 6 month descending trendline on 4/29, in fact UTVG gapped up that day and left a nice rising window.  But if I chart on a log chart, then it looks like it wasnt until yesterday 5/2 that we broke above the descending trend line.

Let's put up UTVG's charts using both scales:

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=45436;image)

I think I'm not getting your line exactly, are you sure you're drawing on a normal scale chart?

(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=45437;image)

Hmm, it appears to me that UTVG's bullish move is more than just a rebound in a bearish trend ... the stock is above most descending trendlines in both scales, normal and semi-log.

In terms of fundamental value, if we were considering a "normal" stock (why not? Accounting irregularities are almost negligible and a thing of the past, due to many acquisitions), I say UTVG should be valued at least at 20 times earnings, given its growth rate and the appeal of its sector (support to the tourism and travel industry in China). That would mean a $240 M market cap and a share price of approximately $6.30.

I'm amazed by CTRP's move. That giant (when compared to UTVG), just keeps on pushing higher in new all time high territory. This tells me people love the sector. If UTVG.OB regains some credibility (perhaps all it was needed was a stock price moving up - no words would restore more credibility than that) maybe people will love it too and value it more appropriately.

I've waited a long time and already had a huge 75% drawdown holding this stock. So now I'm not willing to sell at current prices, even if there can be some more pain down the road. I believe this company is worth at least $6.3 a share with the current fundamental information.

It's funny, buddjas1 left this place because he was annoyed when I disagreed about the statement "Chinese+OTCBB gets a p/e of 5. That's it". I wonder what he's thinking now that UTVG.OB is trading at 8.4 times earnings. I guess there's no point in feeling angry with each other here, everybody is free to express his views, which will be proven right or wrong (or both, if given time), by the market. I don't have an ego anymore (how could I?) so ... I'll just keep going and holding UTVG.OB for the long term.

   

 

     



Maybe this has something to do with utvg's comeback.


Buyers Snap Up Beijing Olympics Tickets
By LORETTA CHAO
May 6, 2008; Page D6

BEIJING -- Chinese authorities struggled to meet high demand for tickets to the Beijing Games as a third round of domestic sales began Monday.

People lined up overnight at Bank of China branches around the country for a chance to buy some of the 1.38 million tickets available in the latest round of sales, and many others tried buying tickets directly through their computers starting at 9 a.m. Some reported having difficulties navigating the Web site and completing their purchases, but China's state-run Xinhua news agency said 60,000 tickets were sold online and through the bank within the first few hours.

BEIJING 2008


Read complete coverage of the Olympics and China's efforts to prepare for the Games, and track the torch's route.Ticket prices ranged from 30 yuan to 1,000 yuan ($4.29 to $143.10), according to the Beijing 2008 Web site.

The ticket-sale Web site was still running by the end of the workday Monday, unlike the second round of sales, when the ticketing system crashed under heavy demand almost immediately after sales started. That incident prompted the Beijing Organizing Committee for the Games of the XXIX Olympiad to change the sales process during that round to a lottery system and to replace its head of ticketing.

During the latest round, hundreds of people waited for hours for a chance to buy a maximum of six tickets each, or three tickets for two matches. Some showed up at the bank branches as early as 10 p.m. Sunday. Notices posted at Bank of China branches at the end of the business day said tickets to track and field matches, beach volleyball matches, volleyball matches and basketball matches were sold out.


Associated Press 
A customer receives his Beijing 2008 Olympics tickets at the Bank of China headquarters in Beijing during the third round of domestic sales.
Though the system didn't appear to have crashed, demand still made the process slow and cumbersome, according to ticket buyers. "It was really a struggle," said Wang Wei, who was able to get three tickets for track and field events via the Internet from Beijing. "I tried almost a whole day in order to get these three tickets [starting] from 9 a.m....and only got them" at 4:45 p.m., he said.

Organizers said a total of 6.8 million tickets would be available across the 37 competition venues, Xinhua reported. The official ticketing Web site of the Beijing Olympic Committee indicated there will be a fourth and final round of sales for China residents in July.

The rush for tickets stands in stark contrast to the Athens Games, when many of the stands were left empty.

Many have anticipated the Beijing Olympics will be the most watched Olympics in history despite controversies over some of China's policies. The Olympics torch relay has attracted demonstrations around the world targeting China's handling of violent antigovernment protests that erupted in Tibet in March, and its relations with the Sudanese government.

Despite the negative publicity and tightened visa requirements, hotels and travel agents say they have yet to receive any cancellations from travelers; some even have waiting lists so long they say they have no worries about filling their rooms in August.

Separately, Beijing on Monday announced a revision of rules to tighten security around Tiananmen Square, an area that has historically attracted political demonstrations. The new rules ban guns, explosives, knives and "other items that affect social order and public security" from the square and allow searches of people and vehicles in the surrounding area.

--Sue Feng, Jason Leow and Kersten Zhang contributed to this article.

Write to Loretta Chao at [email protected]

David,

Thank you very much for the extremely detailed reply on my question regarding the scales.  You did get both the lines I was drawing, they were the ones labeled 3 on each chart.  So actually it was the normal scale that appears to have given the reversal signal earlier if I read that right.  But it made me wonder how other types of trend lines can be impacted, like when chosing support lines, etc....

Anyway, I didnt take profits just yet, I might tomorrow though.  Still, I think if UTVG does consolidate here, the most recent window should act as support and build for the next run.   After all, the Olympics are still many months away ;-)

Thanks for your comments and information soxguy and tokyopua.

The following press release was out today from UTVG.OB:

• Universal Travel Group Announces Termination of Financing Agreement (http://biz.yahoo.com/bw/080507/20080507006620.html?.v=1)
Business Wire (Wed 11:21pm)

Let's also put here the initial information on this subject:

«On February 4, 2008, Universal Travel Group received a commitment for $3.5 million in financing from three Chinese financial institutions in exchange for 1,301,481 shares of Universal Travel common stock, a price of $2.70 per share. The proceeds will be used exclusively to reduce debt from past acquisitions. The funds are to be paid in three installments: $600,000 was paid upon execution of the Agreement, $1,400,000 is to be paid no later than February 28, 2008 and the balance of $1,514,000 is to be paid no later than ten days after the filing of the Company's Annual report. A form of the Agreement between the Company and the investors is attached hereto as Exhibit 99.1.»

I guess it is clear what happened here ... the banks gave UTVG.OB $600,000 in exchange for 222,200 shares and immediately got deep under water on their investment. With the shares trading in the $1.5 area the banks weren't in the mood for paying $2.7 for them, providing an additional $2.9 M in funding to UTVG.OB.

The company has been earning about $3 M a quarter (at least on paper), apparently there won't be any liquidity problem coming from this.

Technically, the $2.34-$2.39 gap was closed yesterday. The stock looks free to resume its bullish trend.

I'll continue holding UTVG.OB.

UTVG.OB closing at the high of the day, recovering from a steep early decline, with people selling on the bad news.

My bet is banks will feel sorry for not wanting UTVG's shares at $2.90.

Someday UTVG will be able to move to the AMEX and then it will be a whole new different ball game. At least this is my long term expectation.

David, is that a cup and handle on UTVG?

                              Maybe this is helping today.
Priceline surges on strong earnings, outlook
Travel site has doubled in market value as customers search for bargains
By Rex Crum, MarketWatch
Last update: 11:59 a.m. EDT May 9, 2008

SAN FRANCISCO (MarketWatch) -- Priceline.com Inc. shares climbed as much as 16% to reach an eight-year high on Friday after the online travel site reported a first-quarter profit fueled by
PCLN 142.60, +18.82, +15.2%) climbed $19.92 share to $143.70 in morning trading. The stock has more than doubled since this time last year and is now at its highest level since late 2000.
Chart of PCLN
The move came after the company said late Thursday that it earned $18.2 million, or 37 cents a share, on revenue of $403.2 million. During the same period a year ago, Priceline lost $16.3 million, or 44 cents a share, on $301.4 million in revenue.
Excluding one-time items, Priceline would have earned 76 cents a share to beat the estimates of analysts surveyed by Thomson Financial, who forecast a profit of 60 cents a share on $377.2 million in revenue.
The company, best-known for its name-your-own price option for flights, has benefited from consumers searching for low-price flights at a time when many airlines are hampered by rising fuel costs.
Priceline said both its domestic and international businesses grew during the quarter. Domestic bookings rose 51% from a year ago, while international bookings doubled from the same period last year.
"The U.S. business was the big upside surprise this quarter," Marianne Wolk of Susquehanna Financial Group said in a research note.
Wolk said that Priceline had earlier estimated its U.S. bookings would rise 35% from a year ago and that "the main driver of growth appears to be air ticketing growth" due to the company's no-booking fee promotion that has been in place since June 2007.
For its second quarter, Priceline said it expect to report earnings of $1.25 to $1.40 a share before items, and full-year earnings of between $5.25 and $5.65 a share. Wall Street analysts had previously estimated Priceline would earn $1.29 a share for its second quarter and $5.11 a share for its entire fiscal year.
"Priceline is proving out as the most defensive 'Net stock," Citigroup analyst Mark Mahaney said in a research note. Mahaney raised his full-year earnings estimates on Priceline to $5.59 a share and lifted his target price on the company's stock to $161 a share. End of Story
Rex Crum is a reporter for MarketWatch in San Francisco.

UTVG: Q1 EPS 4c vs 2c EPS +95% Y/Y
Wednesday, May 14, 2008 17:28ET

QUARTER RESULTS
Universal Travel Group (UTVG) reported Q1 results ended March 2008. Q1 Revenues were $10.08M; +44.83% vs yr-ago. Q1 EPS was 4c; +95.00% vs yr-ago.

more details:
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=5670176

nice chart, congrats for all UTVG shareholders

I'm not a fundamental expert here but when I compare these results with some previous Qtr's, I think they suck!  ::)
Let's hope I'm wrong!  :)

Quote from: Se7en on May 15, 2008, 04:19:07 AM
I'm not a fundamental expert here but when I compare these results with some previous Qtr's, I think they suck!  ::)
Let's hope I'm wrong!  :)

Hey Se7en, UTVG business model has it's earnings back end loaded. By that I mean the majority of it's business happens in the latter quarters of the year. In Q4 2007 they had I think $17M revenue on $44M total for the year (38% of their annual rev in the final quarter).

The Q1 results need to be viewed in that context.

Yep Aussie, I read that there's a lot of seasonality in their business.
Technically the chart looks fine, I hope to see some bullish continuation.

Quote from: Se7en on May 09, 2008, 07:34:21 AM
David, is that a cup and handle on UTVG?

Hi Se7en,

Yes, UTVG is developing a «Cup with Handle» pattern, which is a Bullish continuation pattern. The «handle» zone should be nothing more than a consolidation, which in this case given the stock volatility and the recent upside breakout could be extended a bit more to the downside, lets say around $2.10/$2.00.
Despite today's ugly candle, the overall chart pattern for UTVG looks good. Probably the stock just needs to consolidate the recent gains from the last few weeks, but I would say that this up trend will have a continuation soon.

Quote from: AussieTrader on May 15, 2008, 05:46:52 AM

Quote from: Se7en on May 15, 2008, 04:19:07 AM
I'm not a fundamental expert here but when I compare these results with some previous Qtr's, I think they suck!  ::)
Let's hope I'm wrong!  :)

Hey Se7en, UTVG business model has it's earnings back end loaded. By that I mean the majority of it's business happens in the latter quarters of the year. In Q4 2007 they had I think $17M revenue on $44M total for the year (38% of their annual rev in the final quarter).

The Q1 results need to be viewed in that context.

Hi Aussie,

From a quick look on the results and seasonality I agree with you.

Trading Plan:
HOLD UTVG.OB

Regards,

I sold half the night before earnings, though had no idea earnings were coming  ::)

Anyway, nice bullish hammer today, might add some back.

Quote from: tokyopua on May 16, 2008, 09:07:21 PM
I sold half the night before earnings, though had no idea earnings were coming  ::)

Anyway, nice bullish hammer today, might add some back.

Hi toky ;)

Did you had it?

Update:

A consolidation move like expected:

Quote from: Ramsburg on May 15, 2008, 11:46:10 PM
(...)should be nothing more than a consolidation, which in this case given the stock volatility and the recent upside breakout could be extended a bit more to the downside, lets say around $2.10/$2.00. (...) Despite today's ugly candle, the overall chart pattern for UTVG looks good.(...)

The stock made a low of $2.05 last Friday, between the 2 values I was waiting for, this means a test on the breakout level and a simultaneous test to it's EMA-50 (which worked perfectly as a resistance during the downtrend, and should now work as a support during the uptrend).
Volume was low, and the stock will probably range inside this zone before new developments (2.10/2.75)...

Trading Plan:
HOLD UTVG.OB

Update:

A Form 8-K was out:

Quote29-May-2008
Change in Directors or Principal Officers
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Effective May 23, 2008, the Board of Directors of Universal Travel Group (the "Company") appointed Messrs. Jiduan Yuan, Lizong Wang and Liquan Wang as independent directors of the Company, each to serve until his successor is duly elected and qualified.
Mr. Jiduan Yuan is a postgraduate, senior economist and an expert in China Civil Aviation. From 1965 to 1992 Mr. Yuan worked in the Guangzhou Civil Aviation Management Bureau, holding the positions of Transportation Service Director and Vice Chief Economist. From 1992 to 1999 he worked in the South Center Aviation Management Bureau, where his positions included Enterprise Management Director, Communist Committeeman and Vice President.

Mr. Lizong Wang is an experienced strategic consultant with over 10 years of experience as an independent director for numerous companies, whose expertise encompasses leadership and advisory services to business and political organizations. Currently, he serves as an independent director of the Rui De Feng Agrochemical Company, Ltd. and 3NOD Co., Ltd., the first KOSDAQ Chinese company. Since 2001, he has also been serving as Secretary General of Guangdong High Tech Industry Chamber of Commerce, Deputy Secretary General of Guangdong Private Enterprise Cultural Association, and Deputy Secretary General of Shenzhen Tax Administration. In these positions, his responsibilities include providing information, financial consulting, fundraising techniques, and investment services to more than 6,000 members.

Mr. Liquan Wang has an MBA, is a Certified Public Accountant and Senior Partner of Shenzhen Hongxin CPA. Mr. Wang is an expert in General Financial Administration and building of complete and cost effective internal control systems. He has extensive executive experience in corporate strategy, budgeting and tax administration. From August 1994 to January 1999 he served as an accountant and vice head of the financial department at Liaoning Industrial Manufacture Projecting Co., Ltd. (Shanghai Stock Exchange: 600758). From February 1999 to April 2004 he served as financial manager of Shenzhen Guisu Enterprise Development Co., Ltd. (Shanghai Stock Exchange: 600722). From May 2004 to date Mr. Wang has been a Partner of Shenzhen Hongxin CPA.

On May 28, 2008, James R Treacy resigned as a Director of the Company in order to devote time to personal matters. Mr. Treacy's resignation is effective as of May 28, 2008. 

From a technical perspective, no developments yet, UTVG continues to consolidate the recent breakout reacting positively on the 50-EMA. The $2.05 / $2.08 zone is the current short term support. Due to the stock potential volatility I will not set an automatic stop yet, but mainly I just want to see UTVG continuing to trade consistently above its 50-EMA (in order to validate this inversion scenario).

Trading Plan:
HOLD UTVG.OB

UTVG: Reaffirms Guidance for 2008
Tuesday , June 03, 2008 08:37ET

Universal Travel Group Inc. (UTVG) reaffirmed its 2008 full year revenue and earnings guidance. The Company has carefully assessed the impact of the devastating earthquake in Sichuan Province on May 12, 2008 on its business and continues to expect Revenue between US$69 million and US$73million and Net Income between US$12 million and US14 million for the year 2008, not including stock based compensation.

Update:

I can't say I'm enjoying the current developments on UTVG chart, but the upside inversion scenario is still In-Play at this point.

UTVG closed below the 50-EMA and below the breakout area, making a new relative low since the breakout. Near $1.95 we have the ascending support line, and at $1.80 there is the last relative high and prior resistance level which is now also a support.

We're introducing a stop level, not automatic, but based on a close below $1.80, so the new trading plan is:

Trading Plan:
HOLD UTVG.OB, Sell if it is set to close below $1.80

UTVG.OB stopped @ $1.70