The world is upside down. Back in the bubble days CHINA would go up thousands of percentage points just because of its name: chinadotcom Corp. Now it almost seems the stock has the plague. Just look at what this FOOL says:
«Mistake No. 3: Buying the hype
China is growing wildly and presents incredible opportunities. Satellite radio is the next mass communications medium. XM Satellite Radio (Nasdaq: XMSR) is a big player. The BlackBerry handheld is incredibly popular, and Research In Motion (RIMM) is one of the most innovative companies in the world. The Internet revolution will seem like a blip compared to what's going to happen with nanotechnology.
All that's true. But that doesn't mean you can simply buy Chinadotcom (Nasdaq: CHINA) because it has "China" and "dotcom" in its name and expect to make a fortune. Mighty Amazon.com (Nasdaq: AMZN) remains one of the most successful at cashing in on the Internet revolution. Yet investors who bought at the highs lost more than half their money.»
Let me try to explain my point of view. CHINA is down 96% from its peak and its name is still associated with hype and craziness of bullish investors. Investors have already payed for their mistakes of the bubble days (oh they sure did), there's no point in talking about the past all the time ... ChinadotCom is a name for a company like any. Except this one presents a great buying opportunity 8)
Taking a look at technicals on a semi-log chart:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=600;image)
Big volume, big breakout. It even had already made a successful retest of the broken trendline:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=601;image)
The stock was coming down because of a negative expectation for its earnings:
«Shares of CDC (CHINA:Nasdaq - commentary - research) were among technology's losers Thursday, falling 11.8% after the company posted a big drop in first-quarter earnings.
The company, formerly known as Chinadotcom, posted pro forma earnings of $1.2 million, or 1 cent a share, on sales of $56.2 million. One analyst had been looking for earnings of 3 cents a share on sales of $54 million, according to Thomson First Call. A year ago, the company reported pro forma earnings of $6 million, or 6 cents a share, on sales of $35.5 million. Shares traded down 34 cents to $2.55.»
Sales are growing rapidly and I believe that's far more important than earnings for an internet company. Like I said in the title of this post, I'm buying CHINA at tomorrow's open.
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people are starting to talk about you a lot:
http://finance.messages.yahoo.com/bbs?.mm=FN&action=m&board=21750634&tid=china&sid=21750634&mid=109009
congrats on your excellent work !
Here is the chart on CHINA from last week as it jumped over the 2.60 break point and to the 50-day and trend line at 2.84. Stock may go to 200-day EMA at about $4 as momo stocks have been hot and running above the bands. Still though pay attention to ones as they get so extended with RSI above 70 on 9-period and candle getting above the top Bollinger band.
http://tinyurl.com/az56h
The action on CHINA has been fantastic and I know Metro bought this one before it made it's move so hats off to him. Look at the weekly chart and you can instantly see the huge vol increase and the potential upside. For me, target 1 just under $5, target 2 just under $6. Vol follow through will be key.
So Aussietrader, is it your feeling that CHINA will open higher today....?? That's the general consensus on the Yahoo message board, but, of course, there are a few naysayers who think it will plummet due to last week's rise.... Appreciate your comment NOT only about today's action, but also about 3-6 month out... THANK YOU VERY MUCH...!!!
Well 2619!!, I don't know if it will open higher or lower to be honest, I don't really care too much at that micro level, however I do think it will go higher. I am more concerned with how it behaves relative to its current chart pattern. Fact is, it has huge momentum, it has 'limited' resistance on a relative vol basis above and the 200ema is a nice magnet above it, these all tell me it is more likely to go higher than lower overall. Flip side to all that is it is way overextended and people will start to take profits at some point.
I don't have a crystal ball, just a couple of charts.
Bonne chance.
Mike
Price and volume movement in the past 4 days bode exceptionally well. More then one third of the entire market cap thru the market with two big up days on huge vol and two profit taking down days on quarter the up day vol.
Looks good and I cannot predict support and resistance under such conditions....no one can....all I can say is when you take away the longer term founding holders who dont trade then someone else has bought into this story BIG time
Should go north no probs
1 up with big volume, 1 down with low volume. 1 up with big volume, 1 down with low volume. 1 up with big volume? I guess so, we'll see.
What a strange candlestick pattern on CHINA. The stock opened sharply higher and then came down to fill the gap. This is not the same pattern on IIJI, which was a meeting lines pattern because yesterday's candle wasn't white, but red. But the same psychology applies - gap up and correction to fill the gap. The close of the gap provided support for the short term, so bulls seem to be in control of the stock.
Can you suggest if this is a good entry point 3.37
CHINA is consolidating the bullish move before another leg up. Any price is a good entry price now I believe.
I am in at 3.27
Hope it goes up.
CHINA is having a strange behavior. As a rule one shouldn't like this three black crows candlestick pattern (3 consecutive days with the close much below the open).
I'll tell you what CHINA needs to push higher again: it needs to open lower. The public should be selling the open for pros to buy it.
Beside that I wouldn't like to see CHINA closing below the $3.23 level, I would stop my position if that happens (that's the close on the first big white candle, as a bull I don't want to see prices penetrating that candle again).
This stock is trading under its book value (3.92) and with 230 million cash, its sitting on pretty big pile. Seems to be good stock at current price. Rest depends on the market where it throws [up or down].
CHINA tried to push higher on Friday but it seems it wasn't ready yet. Still consolidating the bullish move it had. I have little doubt the next leg for this stock will be up, we have a recent ascending trend confirmed by volume. Anytime a big white candle should develop.
Again, not so sure today as I was yesterday. General market was pretty weak today, altough it rose a bit. But at least CHINA is not falling, I can't conclude anything from the chart, I need some kind of bearish confirmation to take action and sell. Nothing conclusive on CHINA, yet.
Should we still hold china?
Actually I'm going to give CHINA some room to work out. You see, the stock made, without a doubt, a powerful trend reversal, from bearish to bullish. Now the stock is making a normal pullback from such a strong advance. Maybe it will retest the descending trendline which today will be at $3.08 ... but I think the stock will hold at the 50% Fibonacci retracement level which is $3.08/$3.09 (hold on close, I don't rely on intraday moves).
After this correction is made CHINA should advance to new highs above $3.79. But I don't want to see CHINA closing below $3.08 ...
I still don't know if CHINA will close above or below $3.08. The situation is too close to call at this time so I'll keep the stock and wait for a more definitive day.
I still think CHINA just made a retest to the broken descending trendline. Perhaps yesterday was the last day of a considerable correction. We'll see, but I'm keeping the stock a bit longer.
I was right in giving a little more room to CHINA, the stock today had a perfect technical and bullish behavior. Opened lower at support and then rebounded all day to close near the highs. We've had a millimetrical retest to the descending trendline (previous resistance, now support), and now CHINA is ready to resume its uptrend and zoom to new highs.
It seems CHINA wasn't ready to bull yet. Give it a little more room to build up pressure for another leg up. I sure wouldn't like to see the stock closing below the 61.8% retracement level.
CHINA needs more time for consolidation. I'm going to give it. Keeping the stock.
CHINA went up yesterday on higher volume. Nice market action. I don't know if CHINA will suffer from the coming short term sell off in the general market but I guess not.
CHINA is still consolidated. We got some minor news after the close: Liverpool Football Club and China.com Inc. Announce Exclusive Partnership (http://www.marketwatch.com/tools/quotes/newsarticle.asp?siteid=mktw&sid=1985226&guid=%7B28C2053A%2D6C8B%2D4B22%2D9C30%2DE13D0F89B474%7D&symb=)
$3.08 is an important level for CHINA, I wouldn't want to see it close below that level again. I'm a bit afraid that CHINA won't be able to held this support and advance as the general market is due for a pullback, I believe.
But there was no new technical information from today's session, I will continue to hold CHINA.
It's over for CHINA. The stock closed decisively below the 50% retracement with a red marubozu. Without a doubt the stock is bearish now. Besides, the correction in the general market probably just began, and CHINA was one the weak spots.
I have nothing else to do than to sell this stock at tomorrow's open.
CHINA sold @ $2.94
David, did you send out email recs today. This is two days now I have not seen any???
I am back into china again
Quote from: David Randolph on June 12, 2005, 10:35:31 AM
CHINA tried to push higher on Friday but it seems it wasn't ready yet. Still consolidating the bullish move it had. I have little doubt the next leg for this stock will be up, we have a recent ascending trend confirmed by volume. Anytime a big white candle should develop.
Hi David,
I'm back on the board. Just want to kno wif this is about time to buy again this CHINA.Now it breaks the 3.00 barrier and seems to be ready for fire!
Cheers!
Still in Taipei
Looks like the newly introduced IPO BIDU.com helped the CHINA DOT COM resist above 3.00 level. Well probably this will be the kick for this year for CDC.
About China:
It is better to wait for its earning report. If it reports a profit, the stock will fly.
But from a TA's point of view, it is a STRONG BUY.
The stock has been trading higher lows since its bottom at $2.50:
Lows are: $2.50, $2.75, $2.94, $3.07.
The company has a lot of cash, basically break-even and not a lot of downside risk from $3.00.
I have bought it few times recently but exited last week waiting for ER.
Hi,
Based on the insider transaction, the margin price of selling their Direct Sale is around the price CHINA is been demonstrating.
(From http://finance.yahoo.com/q/it?s=CHINA)
8-Jun-05 24/7 REAL MEDIA INC 160,000 Direct Planned Sale $526,400 (aprx sold at 3.29)
7-Jun-05 CHU, NICOLA 350,000 Direct Planned Sale $1,207,500 (aprx sold at 3.45)
1-Jun-05 CHAN, STEVEN Officer 30,000 Direct Planned Sale $91,497 (aprx sold at 3.05)
The price high spikes at 3.50 last Friday. Can this 3.50 be the peak or this will just be the beginning of rise?
I am a beginner when it comes to analysis, but sometimes due to my instinct , i gain some. I still need to study many many things about the ANALYTICAL WAY of doing my research. ???
Cheers from Taipei! ;)
The chart looks allright, the long term downtrend is no longer in place. I don't know, but if the Friday's rise was due to the BIDU's IPO, I don't thing that's a valid fundamental motive for CHINA to rise.
Let me give you the long and short term chart:
Hi David,
Thanks for the quotes. Earning Report for CHINA will be this 19th of August and the chart looks ok, but bit worry about the reports they gonna be realising. OPTIONS are also scheduled to due on the same date.
But possibilities of rising or drawing to south is stil unexpectable. What is the best timing to buy then?
china does it.
Most likely the run for CHINA is over.
It gapped up at $3.6 but closed at its low of $3.33.
It has a strong resistance at $3.6-$3.70
The key: earnings reported on August 19 is not so exicting.
So it seems that the investors loose their appetite in clinching this stock? So how about their earnings result from lost to positive revenue?
HONG KONG (AP) -- Software provider CDC Corp. on Friday reported a small profit for the second quarter, reversing a year-ago loss, driven by strong revenue growth.
Net income was $36,000, or nil per share, compared with a loss of $2 million, or 2 cents per share, a year earlier. Adjusted to exclude certain nonoperating costs, the company posted net income of $5.4 million, or 5 cents per share, in the latest quarter versus a profit of $2.7 million, or 3 cents per share, a year earlier.The company, formerly known as chinadotcom, said revenue jumped 44 percent to $64.6 million from $44.9 million.
Is this a very promising one? Please advise.
From Singapore
Quote from: macaddictsg01 on August 23, 2005, 07:20:30 PM
So it seems that the investors loose their appetite in clinching this stock? So how about their earnings result from lost to positive revenue?
HONG KONG (AP) -- Software provider CDC Corp. on Friday reported a small profit for the second quarter, reversing a year-ago loss, driven by strong revenue growth.
Net income was $36,000, or nil per share, compared with a loss of $2 million, or 2 cents per share, a year earlier. Adjusted to exclude certain nonoperating costs, the company posted net income of $5.4 million, or 5 cents per share, in the latest quarter versus a profit of $2.7 million, or 3 cents per share, a year earlier.The company, formerly known as chinadotcom, said revenue jumped 44 percent to $64.6 million from $44.9 million.
Is this a very promising one? Please advise.
From Singapore
My 2 cents: earnings were good but the stock wasn't technically ready to advance. Longer term I see the symmetrical triangle on the chart below breaking on the upside for CHINA.
I would definitely buy it if it comes down to support at $3.02, but probably I won't have that chance.
Good luck macaddictsg01 :)
Hi David,
Thank you for your insights.
Additionally, since I been studying with this stock for almost three years, i did always observe that foreign shares listed in NASDAQ always goes to south whenever the US dollar strengthens against asian currencies.
Does it has really something to do with the US Dollar stabilities, or just only coincidence?
Cheers & more power to 3stocksonfire.org
ANother promising hope for CHINA.com (CDC)
HK economy to grow by 6 percent this year
The latest report of Bank of China (Hong Kong) Limited (BOCHK) indicates Hong Kong economy increased by 6.5 percent in the first half of the year, higher than market expectations. Therefore, BOCHK has revised its economic growth forecast for 2005, raising it from 5 percent to 6 percent.
BOCHK says the adjustment means Hong Kong's economic growth will reach 5.5 percent in the second half of the year; its unemployment rate will hopefully decrease to 5.3 percent by yearend; and the whole-year inflation rate will be 1.2 percent.
According to BOCHK, oil price and rise of interests are the biggest factors that may affect prospect of the Hong Kong economy. Statistics of the HK SAR government show the government still maintains forecast of economic growth at 4.5 percent to 5.5 percent.
By People's Daily Online
update:
CDC Software Acquires India-based IT Outsourcing Company
Tuesday , February 21, 2006 07:50 ET
ATLANTA, Feb 21, 2006 /Xinhua-PRNewswire via COMTEX/ -- CDC Software, a wholly owned subsidiary of CDC Corporation (Nasdaq: CHINA), today announced that it has purchased the IT consulting services business of Horizon Companies, Inc., a privately held New Jersey company which principally offers outsourced information technology professional services in the United States and Canada utilizing India-based resources.
Horizon was founded in 1989 and has a 17 year track record of profitable operations servicing large and medium sized companies principally in the northeastern and central United States. Horizon currently employs over 200 IT consultants who staff several major contracts. Customers include public companies such as AT&T, Citigroup, Dendrite International, Emerson Power, Henry Schein, Lucent, Pfizer and YSI, as well as privately held companies like Inductis and Opera Solutions.
Mr. Shirish Nadkarni, chief executive officer of Horizon Companies, who together with his partner Mr. Girish Nadkarni has agreed to stay after the acquisition to manage Horizon's customer base, stated, "I am thrilled to have Horizon Companies join the CDC Software family. Our customers will certainly benefit from the wider range of experiences and depth of resources we can draw upon through CDC Software. Also, our employees with significant experience with ERP packages like SAP, Oracle and JD Edwards and CRM packages like Siebel are expected to generate strong synergies with similar products offered by Ross, Pivotal and IMI through CDC Software."
CDC Software expects the transaction to be earnings accretive beginning immediately since part of the consideration is to be paid on an earn-out basis.
"We are extremely pleased with this significant expansion of our outsourced IT consulting services capabilities. With the addition of Horizon, we now have over 500 consultants in this line of business." said Mr. Rick Marquardt, president of CDC Software. "In addition to enhancing our business services line of business, we expect to cross-train these consultants in the suite of Ross, Pivotal and IMI products offered through CDC Software. The consultants would be additional high quality resources we can draw upon to provide the most cost-effective implementations for customers in our software business, particularly in Asia and EMEA."
Dr. Rajan Vaz, managing director of CDC Software's current IT consulting services business who will take primary responsibility for integrating Horizon and realizing the synergies from the acquisition, stated, "We are improving quality for our professional services customers while also improving our operating margins. It is a win-win situation." He continued, "Given this, I expect us to continue to look to grow our outsourced information technology professional services line of business aggressively in the future. We are looking at other opportunities which, if they are right for us and can be earnings accretive, we hope to bring to fruition in the next several months."
Since CHINA made its partnership with Google (http://www.marketwatch.com/tools/quotes/newsarticle.asp?siteid=mktw&sid=1985226&guid=%7B53D740DC%2D074D%2D4D00%2DB8EE%2D4BE1920122F5%7D&symb=), the stock has been on people's radar and moving higher ever since.
But there's more to this stock than that, as you can read on the analysis published below.
I want to be in before the earnings release on tomorrow's close, because I think they can beat 3Q estimates. There's nothing new to this story to anybody that knows the stock, but I guess a lot of people on the sidelines will become aware of it after the earnings release. And it is quite a bullish story, with below average multiples and above average growth, and as you'll see below, no meaningful dilution since 2000.
I want to add CHINA to the 3 Stocks on Fire Portfolio, around $6.85, today. 6.66% of capital as always.
«1. Profile
The CDC family of companies includes CDC Software focused on enterprise software applications and services, CDC Mobile focused on mobile applications, CDC Games focused on online games, and China.com focused on portals for the greater China markets. For more information about CDC Corporation (NASDAQ: CHINA), please visit www.cdccorporation.net.
2. Technical Analysis
2.1. All History Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28131;image)
We almost can't see the current bull trend on the long term chart. As any internet related stock, CHINA had its bubble and crash. But it was one of those that survived.
2.2. Medium Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28132;image)
The medium term trend is bullish. There are resistance levels around $7.96, $12.75 and $14.90. The 200 day SMA has been a good indicator to predict CHINA.
2.3. Short Term Chart
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28133;image)
Everything on CHINA's chart is pointing north: the trendline, the moving averages, the average volume, etc.
3. Fundamental Analysis
3.1. Number of Shares Outstanding
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28134;image)
I'm surprised and pleased that the share count is almost the same now as it was back in 2000. This is almost a first for a Chinese company. The current market cap is 112.66 million*$6.835 = $770 M.
3.2. Liquidity
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28135;image)
The current ratio has been higher than what it is now, but still $95 M in working capital and $129 M in cash and marketable securities. I think the balance sheet is ok.
3.3. Revenues
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28136;image)
There's solid revenue growth since 2002. $305 M expected for the full 2006, so the revenue multiple is $770 M / $305 M = 2.52. This is about the average of the Internet Software & Services industry.
3.4. Profits
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28137;image)
Analysts expect CHINA to be very profitable in 2006 and 2007. The average estimate for 06 EPS is $0.24 and for 07 it is $0.37. This is very fast growth. If these estimates are correct, the 07 forward multiple would be 18.5, and the growth rate would be 54%.
If the 06 EPS figure proves correct (CHINA needs to make $0.16 for the remaining two quarters - they still didn't report 3Q EPS, they will tomorrow), the current earnings multiple is 28.5. The average for the industry is 40.8.
3.5. Recent News
- «As published on July 17, 2006, the company's estimates for 2006 place total revenues in the range of US$300 million to US$305 million and (1)adjusted net income in the range of US$31.6 million to US$32.8 million.»
More recently they revised this revenue guidance to $305 M - $308 M. Probably net income will be something like $33 M, or about $0.29 a share. This is more than the $0.24 analysts are estimating (perhaps due to GAAP and non GAAP numbers). The current earnings multiple would then be 23, and the industry's average is 40.8.
- «... the company expects total revenues for the fiscal year ended December 31, 2006 to be in the range of US$303 million to US$307 million, an increase of over 24 percent over 2005's revenues. The company anticipates *adjusted net income to be in a range of $32.0 million to $33.3 million, an increase of over 100% over 2005's results. This is the second time in four months that the company has upwardly revised its fiscal year outlook.»
I guess everybody already knows about the 06 numbers, so probably they were already discounted by the share price (even though the multiples are lower than the industry's average).
4. General Overview
I'm undecided on what to think about these numbers in terms of the share price. In one hand, the company already made a lot of publicity on them, on the other, visibility and predictability is usually something that drives the multiples higher.
CHINA is a company of the future, engaged in software, mobile applications, online games and internet portals. I love all these sectors. Valuation also seems attractive, with below average multiples and above average growth.
Usually the issue that kills these high growth Chinese stocks is their habit to dilute shareholder value. But I don't see that at all in CHINA, to my big surprise.
I don't know if 3Q numbers that will be released tomorrow will make the stock rally or decline, but I would see any decline as a buying opportunity. Therefore my outlook is positive on CHINA.»
Good news on CHINA, they're planning an IPO of CDC software or CDC games and getting money from that right away:
UPDATE - CDC Corp to sell $168 mln of convertible notes (http://us.rd.yahoo.com/finance/external/reuters/SIG=11vg30000/*http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh24788_2006-11-13_14-10-44_bng232083_newsml)
The stock is up 5% on the pre-market, breaking out to a new high. I know it takes a lot of courage, but I'll add CHINA to the 3 Stocks on Fire Portfolio right away.
QuoteI'm waiting .... damnit. Embarrassed
maybe we'll see that under seven price soon??? I've learned to wait and follow instructions! Evil
QuoteI think you're on the wrong thread anvilring, you're talking about CHINA, right?
I got in at $7.04 around the open ... the news came just about 10 or 15 minutes before the open (at least I only saw it then), so I couldn't alert on the newsletter, which said to buy at $6.85, which was Friday's high. But I think the news is significant enough and quite bullish (the conversion price is $10.37) and it hints an IPO of CDC games or CDC Software, which probably will have higher multiples than within CHINA.
I think CHINA is going higher. Good luck anvilring Smiley
(let me copy paste this to the CHINA thread)
[email protected] Dispite going against my principles :-\
Hope my principles loose this one and my wallet profits.
hi,
got in on the 38% fib pullback to 720.
maxi
Today's volume was the highest in 14 months for CHINA. The stock closed somewhat shy of its intraday high, but still, it sure looks like a breakaway gap on the chart.
A breakaway gap happens when a stock gaps up over a resistance level. It jumps above the resistance. This shows such a strong demand and conviction from the bulls that most of the times the stock never looks back (well, at least not in a long period).
CHINA also had a breakaway gap on August 17th, when it jumped 9% from $4.64 to $5.07. That gap was never filled, even though the stock closed near the low of the day on the breakaway gap day.
I was expecting to buy CHINA around Friday's close, but I was forced to bid higher, buying around the open at $7.04, due to this news:
CDC shares rise on $168 mln notes offering
at MarketWatch (Mon 12:24pm) (http://us.rd.yahoo.com/finance/external/cbsm/SIG=11iiumket/*http://www.marketwatch.com/News/Story/Story.aspx?guid=%7b34584E0B-29C0-412A-BA48-388C18867721%7d&siteid=yhoo&dist=yhoo)
This means CHINA plans to spin-off CDC Software or CDC Games or both. They already received proceeds from this spin-off, which they will use to make acquisitions and working capital purposes. CHINA expects to pay the loan with CDC Software or CDC Games shares.
We previously discussed that CHINA has an above average growth rate and a below average revenue and earnings multiple. Probably these multiples will expand if they're able to spin-off these subsidiaries (I don't see why not).
The sum of the parts is greater than CHINA. I read a research piece that appointed $13 - $14 a share value for the sum of the parts.
Anyway, I was going to buy the stock before this news came out. Tomorrow (I think it will be after the close), 3Q earnings will be out. I expect them to be above expectations. Either way, I'm not going to sell CHINA around current levels. I will win 50% or more or lose no more than 10%. I don't want to be shaken out of a fundamentally backed advance phase just because of a small correction.
Another fine Analysis David,(Applaud), and a good looking bull chart.
Google click to play and china...
Company also announced that its portal business unit has launched Google's (GOOG) click-to-play video in the China market via the China.com's English Channel.
Business Overview.....
BRIEF: For the six months ended 30 June 2006, CDC Corporation's revenues rose 17% to $141.5M. Net income from cont. ops. totaled $9.4M, vs. a loss of $3.7M. Revenues reflect an overall increase in sales from software, business services, mobile services & applications, internet & media and an inclusion of online games revenues. Net income also reflects improved gross margins, decreased research & development expense and reduced interest expense. http://www.cdccorporation.net
CDC Corporation Earnings Conference Call (Q3 2006)
Scheduled to start Tue, Nov 14, 2006, 5:00 pm Eastern
Link..... http://biz.yahoo.com/cc/6/75346.html
52wk Range: 3.06 - 6.98
Volume: 8,285,061
Avg Vol (3m): 1,922,610
Support @ $6.96...6.82...6.55
Resistance @ $7.25
Technicals
MACD is Bullish
Record Price High
Close Above the 13-day MA
Most Actives
Gap Up
Last Price Quote is:
10.77%above 13-day MA
19.09%above 50-day MA
RS Rating: 97
Fundamentals
Earnings Expected on Nov 14
Key Data:
Market Cap (M): $617.62
P/E Ratio: 67.67
PEG Ratio: N/A
Next Earnings: 11/22/2006
Last Analyst Rating: Equal Weight
hi,
got out 728. didn't like the 5 min candles this morning . i was looking for a pop above 746 this morning and to get out before earnings , don't want to hold over on the hope that the market likes it .
glta holding,
max
I filled a half position at 7.00, and if it fills the gap today I might add another half position. Go CHINA!
Earnings were out: CDC Corporation Reports Record Revenues of US$78.2 Million and Adjusted Net Income of $10.1 Million for Third Quarter of 2006, an Increase of 26% and 214%, Respectively, Over the Prior Year Period (http://biz.yahoo.com/bw/061114/20061114006297.html?.v=1)
These are outstanding numbers and the stock is up 8.6% after hours to $7.68.
EPS expectations were $0.06, actual numbers were $0.09, so 50% above expectations.
The company also provided 2007 guidance: revenues in the range of $401 M - $411 M and net income of $55 M - $60 M. So, if the number of shares outstanding stays basically the same (this has been the company's policy over the last 6 years), fiscal 2007 EPS guidance is $0.51. This year it will be about $0.27 - $0.28, so we're talking about almost 100% EPS growth.
If we apply the average earnings multiple of the Internet Software & Services Industry to CHINA, which is 40.86, we get a price per share in 2007 of $20.84.
CHINA stock has nowhere to go but up !
Today we had the highest volume in CHINA over the last 18 months or so, with 10.7 million shares changing hands. I already discussed the 3Q earnings report and I think there are only good things ahead for CHINA.
The last few days were quite emotional for CHINA traders and investors. Bulls clearly won the fight. Now I expect the stock to calm down and slowly but surely keep on moving higher. Of course there will be down days as we move along the path to true value, but the trend, that good old friend, is on our side.
David:
Great pick for CHINA. I noticed that they offered $168 M senior notes. do you worry about why they need so much money?
Quote from: winner919 on November 15, 2006, 09:45:21 PM
David:
Great pick for CHINA. I noticed that they offered $168 M senior notes. do you worry about why they need so much money?
Not much worry about that, the company said it will use the money for this:
"The company intends to use the proceeds from the transaction for acquisitions at both CDC Software and CDC Games, as well as game development, investment in research and development and for other general corporate purposes, including working capital to support new growth initiatives."
Another view, this time on the optimistic side, could be: «wow, somebody invested $168 M in CHINA, they probably know something we don't» or «the company's assets are very valuable».
I think this private placement isn't all that much relevant for CHINA. Moreover, the market already judged that and the verdict was: «it's bullish».
Technically the stock is making another island, just like the one we had in the beginning of the week. It sold off today, but held on yesterday's low, not closing the gap, again. The trend continues to be bullish, fundamentals are extremely attractive, I'll continue holding CHINA.
Two press releases on CHINA today:
InPlay: CDC Corp responds to inquiries regarding the co's Q3 results
Briefing.com (Fri 8:06am) (http://finance.yahoo.com/mp#china)
CDC Launches Video Service in China
AP (Fri 8:52am) (http://biz.yahoo.com/ap/061117/cdc_video.html?.v=1)
I know the stock is down a bit on the pre-market, but I feel it will breakout above $8 today. We'll see, anyway, I'll continue holding CHINA.
Quote from: rickjust on November 14, 2006, 10:18:15 AM
hi,
got out 728. didn't like the 5 min candles this morning . i was looking for a pop above 746 this morning and to get out before earnings , don't want to hold over on the hope that the market likes it .
glta holding,
max
[/quote
back in 764 >:D
maxi
some extra news for china.
CDC to Move Video Game Business Out From Web Portal Umbrella in $110 Million Restructuring
NEW YORK (AP) -- CDC Corp., a Beijing-based software company and operator of China.com, said Friday it will move its online game business out from beneath the umbrella of its Web portal business, in a restructuring move that will cost $110 million.
CDC Games Ltd. currently operates under the China.com Inc. business, of which CDC owns a 77 percent stake. CDC said it will pay China.com $110 million -- $50 million in cash and $60 million in debt -- to acquire 100 percent of the games unit. CDC Games will then become a direct business unit of CDC.
If CDC Games completes a successful listing on certain stock exchanges in the next 12 months, CDC will pay China.com an additional $25 million, the company said.
The agreement is subject to approval by China.com's board and independent shareholders.
Shares of CDC fell 17 cents, or 2.2 percent, to close at $7.53 on the Nasdaq, and dipped 3 cents after-hours.
QuoteI know the stock is down a bit on the pre-market, but I feel it will breakout above $8 today. We'll see, anyway, I'll continue holding CHINA.
Nope, my feeling was wrong.
Thanks for posting the news out after the close rickjust :)
CDC to acquire Games unit for $110 mln from China.com (http://us.rd.yahoo.com/finance/external/cbsm/SIG=11iiumket/*http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bBFE0B543-D544-4D2F-A992-2EDD4E132367%7d&siteid=yhoo&dist=yhoo)
at MarketWatch (Fri 5:10pm)
The stock was up 2% after hours on light trading. This is a good answer to those questions of some shareholders: «Why do you need the money?» They needed it to buy 100% of CDC games (they only have 77% of China.com and CDC games was 100% owned by China.com, a publicly traded company in Hong Kong), so they can make an IPO of CDC Games.
The IPO will probably be made in the following 12 months.
Although it doesn't always happen this way, I've seen this speculation theme on IIJI about a year ago or so, and the stock rose 100% in just about a month (great trade there (http://www.3stocksonfire.org/trading/index.php?topic=310.0) 8)), with people buying the rumor of the IPO, and then, of course, selling the news.
But CHINA stock doesn't need this speculation to rise, its internal numbers are sufficient.
Technically, the low of the day for the past 3 days was $7.53-$7.52, this is a bullish candlestick pattern called matching low. I expect CHINA to push higher next week and close the week above $8.
I'll continue holding CHINA without conditions.
Well, not all gaps are breakaway gaps, and CHINA went down to exactly close the latest gap that was open between $7.36 and $7.52. I've been predicting a rally on CHINA for a close above $8, and so far, nothing, just a small daily fall after another. Perhaps after closing this gap CHINA is now ready to push higher again, I think it should, given the extremely attractive fundamentals, but of course the market is always supreme.
Anyway, I maintain that I'll continue holding CHINA through tomorrow's session whatever happens.
Like old times, a Randolph Rocket! :o
Quote from: Lucas Scott on November 21, 2006, 04:14:24 PM
Like old times, a Randolph Rocket! :o
Man, it's good to see you Lucas Scott ! Thanks :)
I'll take the risk of being boring, but I've lived long enough on the stock market to get excited about a white marubozu or depressed by a red one. An investor needs to balance his emotions.
Once I read about a speculator that would be pissed off when he won and quite cheerful when he lost, as he practiced this balance idea so vividly.
Considering CHINA, I see a lesson here. And the lesson is: stocks don't go up in a straight line ! Moreover, a few days of correction don't mean anything, not in technical or fundamental terms. So everybody should stop looking at every tick and stop thinking so much ! (of course, myself included).
I'll continue holding CHINA.
Quote from: Lucas Scott on November 21, 2006, 04:14:24 PM
Like old times, a Randolph Rocket! :o
You can say that again, Lucas Scott !
The man has returned...... ;D
Quote from: tokyopua on November 14, 2006, 01:28:05 PM
I filled a half position at 7.00, and if it fills the gap today I might add another half position. Go CHINA!
Heh, wishing I had filled a whole position on this rocket. But even with a half position, CHINA saved my portfolio from being in the red today. Thanks for this pick, David!
Wow a 20% move in 1 day (congrats all who are in and David for the pick) AND Lucas Scott is back. Long time no hear buddy. I am way too excited by that ;)
Thanks for your supporting comments setravis, tokyopua and AussieTrader :)
CHINA had a perfectly normal correction after an 18% single day jump. It was a constructive session, making no damage whatsoever to the bullish technical picture.
It is much better to have a day like this, where after a long white marubozu the stock opens down and stays down, than to open with a gap up and close down. The way it happened the candlesticks favour a continuation of the short term advance phase.
I'll continue holding CHINA.
Looking to take out $9.
5.2 million shares is a very strong volume for a half session like today. Also nice white candle.
Analysts need to move their estimates up, as I thought they would on the initial analysis:
(http://www.3stocksonfire.org/trading/index.php?action=dlattach;attach=28918;image)
They're starting, but there's room to push them even higher, since according to the company's guidance fiscal 07 EPS will be something like $0.51 and current estimates are still $0.41.
I'm quite positive that CHINA will beat Q4 2006 consensus of $0.06 Earnings Per Share.
When a stock is acting right, don't rush to take profits.
hi,
sold the rest at 9 today,
everything is turning red .
maxi
Quote from: rickjust on November 27, 2006, 11:15:19 AM
hi,
sold the rest at 9 today,
everything is turning red .
maxi
You're right Maxi, the market was all red today. But I think you should use the current pullback to get back into CHINA, or you may miss the ride.
The stock fell in sympathy with the Nasdaq, but didn't make any technical damage to the short term chart. I'll continue holding CHINA without restrictions.
hi david,
could see the pullback coming this morning . will be looking for a rentry a under 9.
chart still looks good,. i think the general market will retrace for ( i don't know how long)
we'll see tomorrow. great pick as usual.
maxi
Quote from: rickjust on November 28, 2006, 12:29:49 AM
hi david,
could see the pullback coming this morning . will be looking for a rentry a under 9.
chart still looks good,. i think the general market will retrace for ( i don't know how long)
we'll see tomorrow. great pick as usual.
maxi
I also slashed and burned a number of stocks today, but did keep CHINA.
Maxi, I was impressed when you went to cash in the last correction, I think you have good instincts. Are you mostly in cash now, or are you still invested in other stocks?
hi tokyopua,
i have good instincts for a correction because i am basically a pessimist in the market. lol
less good for a bull.
yes i only have sknn which i bought today at 170. ( i have a bag of ptsc from a while back , but i am not letting it go unless A. goes to zero. or B. it goes to the moon)
sold my eght for no loss 190. lost today on coms , but i gave it a chance. sold my china and brlc.
i watched the qqqq's this morning and the ten main stocks that make up the q's and they were all red. it has been a good run up to now . i don't think it is over just yet .
my sknn buy looked good when i bought it at 170 and it hit 180 but these pennies are volitile.
like i said on my previous post , i will be watching china for a rentry.
thanks
max
This morning's news:
China.com Shareholders Approve Major Mobile Acquisition
http://biz.yahoo.com/prnews/061128/hktu008.html?.v=2
....and from Reuters:
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20061128:MTFH04438_2006-11-28_11-26-50_WNAS4290&type=comktNews&rpc=44
Nov 28 (Reuters) - China.com Inc. (8006.HK: Quote, Profile, Research), controlled by software company CDC Corp. (CHINA.O: Quote, Profile, Research), on Tuesday said its shareholders approved the acquisition of Timeheart for $15.7 million in cash and stock.
The Hong Kong-listed company said in a statement the decision was unanimous, with over 3.3 billion shares voting for the acquisition.
The acquisition of mobile service provider Timeheart by CDC Mobile Media Corp., a wholly owned unit of China.com, will add to earnings and is expected to close within the week, the statement added. (Reporting by Sayantani Ghosh in Bangalore)
hi,
back in at 850 on the support line (849) >:D
max
hi,
out at 897,. failure to hold 9 and double spike top at 920 925.
5.52% profit
maxi
Quote from: rickjust on November 28, 2006, 03:02:12 PM
hi,
out at 897,. failure to hold 9 and double spike top at 920 925.
5.52% profit
maxi
Hi Maxi, keep posting your day trades on CHINA, I want to make a test here. You day trade it and I just buy and hold, and when I sell it we'll see who has the biggest profit. Allright? This will be interesting to see if you can beat a bullish trend, by selling high and buying on retracements.
So far I have a 26.99% profit, having bought at $7.04.
You bought at $7.20, sold at $7.28 (+1.11%). Bought at $7.64 and then you said "sold the rest at $9". What was your average selling price? Let's assume it was $8.80 (+15.18%). Then you bought back at $8.5 and sold at $8.97 (+5.53%). Your total profit was 21.82%, less than my 26.99%, without taking trading costs into account (actually even I was surprised by these results, I thought you were ahead with those beautiful swings).
My point is: you can't beat it. Nobody can. If you're willing to, prove I'm wrong ;D. If you're not, no problem, keep those posts coming anyway :)
Thank you.
Coming back to CHINA, there were some news out today that 422fwhp posted: China.com Shareholders Approve Major Mobile Acquisition (http://biz.yahoo.com/prnews/061128/hktu008.html?.v=2)
It's not a big acquisition, just $15.7 M. They say the company acquired had a $3.5 M net income in 2005, so the trailing earnings multiple is 4.49. Cheap, cheap.
Still not ready to push towards $10, but look at that volume ... it won't take long to see $10 crossing on your ticker.
hi,
i have no doubt that you will beat my percentage :D. but i have to find my way in trading
and one of the things that i failed at the most is not selling when i should have.
so really i am just practicing pulling the trigger which has been the hardest for me.
i saw the pullback to my support level this morning and i jumped on . i saw the lack of commitment (albiet short term ) above 9 so i bailed. so today's trade was very satisfying for me.
also i have a very small account, (very small!) so this works for me . my trading cost is $1 per trade so commisions is not an issue for me at the moment.
i am still learning but i am feeling much better about my trading every day as i get stronger in my conviction. it is important for me to follow my own plan. as you know , even when you are wrong you have the satisfaction of knowing you were the determiner of your fate.
hope i can get back in lower . lol
maxi
Lol, I like your thinking, I like it a lot ! Let me applaud.
I also hope you can get back in lower, say ... $8.96? ;D
Quote from: David Randolph on November 28, 2006, 06:09:02 PM
Lol, I like your thinking, I like it a lot ! Let me applaud.
I also hope you can get back in lower, say ... $8.96? ;D
896!! at least that will cover my commision >:D
thanks for the applause,
maxi
There were some news yesterday, but not relevant for the stock price over the short term: China.com, Meetic to Roll Out Dating Site (http://biz.yahoo.com/ap/061129/china_com_meetic_partnership.html?.v=1)
The higher open didn't provide fuel for a bullish breakout of the $9.20 - $9.25 resistance area. Volume declined on this small day.
If you're on this one since the low $7's like I am and you watch the intraday, tell me something, don't you feel like taking profits when it goes down below $9? Or feel like "it's going to $10 today" when it comes up from below $9 to above $9?
I don't know if I can explain myself correctly, but these round numbers have this psychological effect on traders. People that buy above $9 tend to stop when it breaks below $9, as they feel "oh my, support is gone". And people that sell or short the stock below $9, when they think "now is the time for CHINA to correct 10%", quickly buy/buy to cover when it comes back up above the $9 "resistance level".
The fact is that $9 is irrelevant from a technical perspective. There's no support or resistance there on the chart, only in our mind. So the market, as always, makes its best to hurt the majority of people and is playing that game now.
Longer term, all this thinking is kind of useless. I'll continue holding CHINA.
hi,
i may get a chance to get in at the 9 day or just above.
looking for 850s to 870s. if i miss it then a strong break of the 920s will do. this one has been
volitile and can take off at any moment.
glta holding.
maxi
Hello rickjust, nice photo :)
CHINA closed above $9, and that's a first for this move. The stock is clearly in consolidation mode.
When the consolidation phase ends it will make another white marubozu to $10 or more. Volume is drying, and I guess that means there aren't much more shares for sale at current levels.
Nothing new on the fundamental or technical front, I'll continue holding CHINA (it's so much easier to let the profits run when they're bigger than 20%, isn't it? Well, it should be)
back in 887
hit the 5day again
maxi
P.S.
still looks a little weak today ( with the market) i will add if it comes to the 10ma
It's good to have you back on CHINA rickjust :)
Nothing new happened on the technical or fundamental front, I'll keep on holding CHINA.
Quote from: David Randolph on December 02, 2006, 05:18:57 PM
It's good to have you back on CHINA rickjust :)
Nothing new happened on the technical or fundamental front, I'll keep on holding CHINA.
thanks david,
we will see tomorrow . may still come back to the 10ma. it is in one of those holdiing patterns.
the market looks weak with the u.s. dollar but this stock has the ability to move up like frpt did on friday.
glta
maxi
CHINA looks like it's ready to put in a new 52 wk high maybe today. ;)
hi,
breakout starting now with china.
already trading 18mill. shares broke through some reistance at 910
rock on,
maxi
Quote from: rickjust on December 04, 2006, 01:00:56 PM
hi,
breakout starting now with china.
already trading 18mill. shares broke through some resistance at 910
rock on,
maxi
Didn't quite make it yet, but it's just a matter of time for CHINA to close above the $9.20 - $9.27 short term resistance level and push towards $10.
Today the company announced a small acquisition, as they are using the money they raised on November 15: CDC Software Expands Services Portfolio Through Acquisition of Leading Provider of IT Support and Managed Services (http://biz.yahoo.com/bw/061204/20061204005579.html?.v=1)
Business Wire (Mon 8:00am)
There's nothing else to do with CHINA but to sit down and watch it rise.
Quote from: David Randolph on November 30, 2006, 07:01:00 PM
When the consolidation phase ends it will make another white marubozu to $10 or more. Volume is drying, and I guess that means there aren't much more shares for sale at current levels.
I agree that this is what is likely to happen, specifically another marubozu as opposed to just a gradual rise over time. its a bit hard to explain, but the chart just has that "feel" to it, doesnt it? :)
hi,
yes i thought it was going to make it today but i just got home and saw it at 903.
hmmm. three spikes above 920 ( don't like spikes) macd rolling over , 10ma rolling over.
my prediction now, ( i will go out on a limb) tomorrow it will definetly drop to at least the 10ma if not lower to the 20 for a retrace and a bounce
maxi
hi,
a little more water on the fire . wonder if this will have an effect tomorrow
maxi
...at least this might explain the small drop of a few pennies:
...on Mad Money, Cramer -- who appeared distracted as he hardly answered the caller's question about CDC -- rang his cash register for both CDC and Baidu. Meaning...take profits...
His record is pretty mixed, as we all know...but it would've been alot nicer if he did just a little thoughtful analysis. Think he would've come up with a very different answer...at least for CDC.
Quote from: rickjust on December 04, 2006, 10:18:35 PM
hi,
a little more water on the fire . wonder if this will have an effect tomorrow
maxi
...at least this might explain the small drop of a few pennies:
...on Mad Money, Cramer -- who appeared distracted as he hardly answered the caller's question about CDC -- rang his cash register for both CDC and Baidu. Meaning...take profits...
His record is pretty mixed, as we all know...but it would've been alot nicer if he did just a little thoughtful analysis. Think he would've come up with a very different answer...at least for CDC.
It will likely have a small effect, but personally I have just come to realize that Cramer has an autopilot response to almost all Chinese stocks. If its Chinese he usually just makes some comment about how he doesnt like Chinese stocks in general.
I like Cramer but always take him with a grain of salt. He has been saying take profits on DIVX since around $23 I think. But when its hit a double there will be a special segment where they air his first recommendation of it. This happened recently with ATI, his stock of the year, which admittedly he did annoint as stock of the year, but mid year he kept saying sell. Then Friday they have the flashback to when he recommended it 144% lower. Even though the gap that recommendation never got filled an nobody could have made the full144%. OK, Cramer rant off, I watch his show and learn from it, I admit, lol.
i see a limited downside, possibly a test of the 10 MA at around $8.85, but the upside is pretty good with break of $9.27
any thoughts people?
Tokyopua said:
QuoteI agree that this is what is likely to happen, specifically another marubozu as opposed to just a gradual rise over time. its a bit hard to explain, but the chart just has that "feel" to it, doesnt it? :)
And rickjust said:
Quotehi,
yes i thought it was going to make it today but i just got home and saw it at 903.
hmmm. three spikes above 920 ( don't like spikes) macd rolling over , 10ma rolling over.
my prediction now, ( i will go out on a limb) tomorrow it will definetly drop to at least the 10ma if not lower to the 20 for a retrace and a bounce
maxi
Opposing views on the short term. I guess this is what makes a market ! It makes a market, but not my way to trade, as I refuse to look at the tape (or the ticker) to make trading decisions.
Cramer talked bearish on CHINA. I couldn't pay less attention to what he says ... I already subscribed to his service and I didn't like it at all. I saw a market average performance, with 14% in 5 years or so, about 100 different holdings and just trades around a core position. For example, he held, say 5,000 shares of MSFT and then he said: «buy 500 more today that it's down 1%». A few days later he would say: «sell those 500 now». But the core positions were always the same.
I also agree with Tokyopua's post describing how the media touts his recommendations. Of course they would never talk, for example, about this embarrassing article: The Winners of the New World (http://www.thestreet.com/funds/smarter/891820.html) (look at the date, the stocks, and the current price).
Anyway, it only happens to the ones who have an opinion and he sure has courage. I admire him for that and I've also been wrong, and I mean wrong, before.
Quote from: vic666 on December 05, 2006, 04:34:46 PM
i see a limited downside, possibly a test of the 10 MA at around $8.85, but the upside is pretty good with break of $9.27
any thoughts people?
Yes vic666, let's get back to CHINA. There has been some constraint in surpassing the $9.20 - $9.27 level, but if you look at the chart and the fundamentals, everything points north.
Later we need to put this into context, as I'm writing 11 pages of Reminiscences of a Stock Operator on the Members Corner, but for now let me just quote this from page 69:
«The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.»
I'll sit tight and continue holding CHINA.
"The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight"
David, thanks for the analysis, and how true is that quote you provided above!! so easy on paper, so hard on the mind...disciplien, discipline, discipline! it's all a mind game is what it is!
always learning and loving!
QuoteDavid, thanks for the analysis, and how true is that quote you provided above!! so easy on paper, so hard on the mind...disciplien, discipline, discipline! it's all a mind game is what it is!
always learning and loving!
Yes, this entire chapter 5 of Reminiscences contains priceless market wisdom. I'll write all 11 pages on the Members Corner for future reference (you can already find 3 pages there).
I disagree with your signature:
QuoteLong term investments are short-term investments that have gone wrong.
I would say: all trades start as short term trades, but good trades are long term. Don't expect to beat the market doing short term trading. Over time you'll just feed the brokerages.
How about another quote from Reminiscences? :D
«I made up my mind to be wise and play carefully, conservatively. Everybody knew that the way to do that was to take profits and buy back your stocks on reactions. And that is precisely what I did, or rather, what I tried to do; for I often took profits and waited for a reaction that never came. And I saw my stock kiting up ten points more and I sitting there with my four-point profit safe in my conservative pocket. They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market.
Where I should have made twenty thousand dollars I made two thousand. That was what my conservatism did for me.»
CHINA looks like it is making a top. It sure looks like it. Until the next white marubozu takes the stock to $10 and everybody chases it on the way up.
The chart and the fundamentals are bullish. I'll ignore the tape. I'll refuse to consider intraday developments. I'll continue holding CHINA.
Quote from: vic666 on December 05, 2006, 08:00:45 PM
"The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight"
always learning and loving!
broke above resistance today.
maxi
Do you have it or did you lose your position rick?
Big volume on this bullish breakout day (no, you won't catch me again making intraday predictions, or I would say it will close around $10 ;D)
i still have it,
and added a little at 919
max
If it wasn't for the general market weakness CHINA would probably have had a white marubozu towards $10.
But, the general market weakness existed, didn't it? So I need to consider it as a fact and don't make any excuses.
But I don't have to make any excuses. CHINA rose 3.7% today. It was a beautiful day. I have a 34% profit on the stock and I'll continue holding.
Quote from: David Randolph on December 07, 2006, 04:54:16 PM
If it wasn't for the general market weakness CHINA would probably have had a white marubozu towards $10.
But, the general market weakness existed, didn't it? So I need to consider it as a fact and don't make any excuses.
But I don't have to make any excuses. CHINA rose 3.7% today. It was a beautiful day. I have a 34% profit on the stock and I'll continue holding.
I agree that the market being weak later in the day was a factor in killing the marubozu candle.
Also, there is a 3 cent microgap from the opening today that probably held back a number of traders. I think without that little gap there would have been more upside. Of course, the bottom of that gap can just provide another potential support when/if it gets filled (my money says its close enough to get filled unless some news comes out soon).
But like you said in another post, at this rate it is more of a mental excercise to try to anticipate how and why things will happen in a certain way, given that with 34% profit there is the luxury to let the profits run :)
QuoteAlso, there is a 3 cent microgap from the opening today that probably held back a number of traders. I think without that little gap there would have been more upside. Of course, the bottom of that gap can just provide another potential support when/if it gets filled (my money says its close enough to get filled unless some news comes out soon).
Yes, there was that micro-gap ... do you mean you sold and you'll try to buy back at $9.08 if/when the gap gets filled?
I hope you're lucky enough to do it, but you know, I don't think that is a sound long term way to speculate, since you're risking losing a $3 to $5 move to save $0.20 or $0.30.
Look at the mistake I made on NWACQ.PK, what a shame :-[. Not buying because of a gap up and yesterday watching it fly another 48% (http://mdteague.com/NoPity)
I'm starting to go deeper on the notion that I should invest on the main moves and forget about the short term fluctuations.
CHINA's main move is up, fundamentals support an even higher valuation, I'll continue holding it.
Quote from: David Randolph on December 06, 2006, 05:14:17 PM
I disagree with your signature:
QuoteLong term investments are short-term investments that have gone wrong.
I would say: all trades start as short term trades, but good trades are long term. Don't expect to beat the market doing short term trading. Over time you'll just feed the brokerages.
David,
Thanks for your comments as always. About my signature first...it was a specific signature for the type of trader that I see myself as.....i.e a position/short-term trader. The gist of my trading style is to buy into a breakout, or buy into an anticipation of a breakout, out of numerous kinds of consolidation/congestion patterns. Having defined my style, it's imperative that I stick to my style in the time-frame I've given myself and the stock as well. If I do not see the anticipated move as I've expected to see, then I ought to be disciplined enough to get out in search of another stock breaking out. Holding onto the first stock hoping and waiting has only done me bad (once again, this signature is specific to my trading style). The best example I can think of is when I made a bundle on AOOR back in May, but lost more than what I made, coz' I ended up holding and hoping it would turn back up after it started pulling back. I broke my rules on my short term trading style and I paid a hefty price.
About CHINA, I think it's going higher...but I made some trades on it for 2 - 3% profits twice (trading on margin, so dollar wise, it was a decent profit). But I am expecting the trending indictors to cause a pullback on CHINA. I would be a buyer of CHINA (short term only) if it broke yesterday's high of $9.35
We have different trading style and strategies....whichever works best for our mindset and our motives and whicever gives us the "confidence" is what I believe we ought to stick to. As they say, once you have that "confidence" in your trading style, money follows you automatically. So, I think, trading well is a matter of building confidence in one's own style/strategy and sticking to it all the way.
Quote from: David Randolph on December 09, 2006, 06:23:40 AM
QuoteAlso, there is a 3 cent microgap from the opening today that probably held back a number of traders. I think without that little gap there would have been more upside. Of course, the bottom of that gap can just provide another potential support when/if it gets filled (my money says its close enough to get filled unless some news comes out soon).
Yes, there was that micro-gap ... do you mean you sold and you'll try to buy back at $9.08 if/when the gap gets filled?
I hope you're lucky enough to do it, but you know, I don't think that is a sound long term way to speculate, since you're risking losing a $3 to $5 move to save $0.20 or $0.30.
Look at the mistake I made on NWACQ.PK, what a shame :-[. Not buying because of a gap up and yesterday watching it fly another 48% (http://mdteague.com/NoPity)
I'm starting to go deeper on the notion that I should invest on the main moves and forget about the short term fluctuations.
CHINA's main move is up, fundamentals support an even higher valuation, I'll continue holding it.
No, I still have my position in CHINA, didnt sell. I agree that this one is pushing higher. At this point I dont have a large enough position to make it worth the risk that the gap doestn fill just to try and gain a few dollars. I do think CHINAs microgap will fill as it can still be consolodating around this leve before the real push higher, but again that is just an academic prediction for me (even though I said "my money says" that is actually just a figure of speech in this case.)
When I have a lot to gain though by a likely gap close I often risk selling, this has worked well for me recently. However, it hasnt worked so well when I have decided not to take a position waiting for a gap (recently examples are ATI and PCU).
I see what you mean about the main moves though. For example I recently realized that if I had held AOB though all its ups and downs over 1 year I would be up 300% on that position from where I bought it about $4 if I recall correctly. Of course, the skill is knowing which stocks can return 300% in a year to begin with!
Thanks for the description of your trading style vic666, I really appreciate it. It reflects the Trader 2 Trader environment we're creating here at 3 Stocks on Fire.
QuoteWe have different trading style and strategies....whichever works best for our mindset and our motives and whichever gives us the "confidence" is what I believe we ought to stick to. As they say, once you have that "confidence" in your trading style, money follows you automatically. So, I think, trading well is a matter of building confidence in one's own style/strategy and sticking to it all the way.
If you told me this one year ago I would promptly say: «That's it man, I agree 100%». But now, with some more bruises on my trading body, I hesitate in saying that ... I'm starting to think there are thousands of ways to lose money in the market, but just a few ways to make it. I'm starting to lose my believe in "you need a trading style that suits your personality, so, different personalities should have different trading strategies". I fear that this "different personality - different trading style" theory is a way to rationalize a behaviour that over the long run will lead to losses, not profits. Maybe I'm wrong, but I have this fear ...
For example, I think what you say here ...
QuoteAbout CHINA, I think it's going higher...but I made some trades on it for 2 - 3% profits twice (trading on margin, so dollar wise, it was a decent profit).
... is a trading behaviour that over the long term will make you lose. You shouldn't trade with margin so that a 2 - 3% move shows you a "decent" profit in dollar terms. You're trading with more money to be more right, but more money won't make you right, only trading right. Betting on 2 - 3% fluctuations isn't a right way to trade, because, what if when you're looking for a 2% profit, on margin, you get a sudden 10 or 20% move against you due to some unexpected news (or just a normal technical development)? Another thing is that your way, or anybody's way to predict 2 - 3% moves has many flaws ... it looks like it works, but it doesn't if you make it long enough.
Please, don't understand me wrong. I spent years of my life doing what you're doing, and even made little money out of it ... (probably that's why it took me so long to learn more of the game). But I made much less money than I ought to, given what I knew about the market.
So I had to adapt and learn more. I had to learn fundamental analysis to have more confidence and hold stocks longer. Because the big money is made on the big moves.
I know why you want to have that short term trading style. You're either trading for monthly wages or you want to get rich fast, making, say, at least 20% a month? What if I tell you that if you make 50% a year, in 25 years you'll be one of the richest men on the planet? You would probably say "I don't care about 25 years down the road, I care about 5 years, and with just 50% a year I still won't be rich enough in 5 years time!" And then I would answer: "yes, but if you waste 5 years several times not doing the right thing, maybe when the 25 years are gone, you look back and think: "I
could have done the right thing!"
Man, I should write an article with these thoughts (and probably I will, over the weekend). I wish you the best of luck vic666, thanks a lot for sharing your trading experience :)
QuoteI see what you mean about the main moves though. For example I recently realized that if I had held AOB though all its ups and downs over 1 year I would be up 300% on that position from where I bought it about $4 if I recall correctly. Of course, the skill is knowing which stocks can return 300% in a year to begin with!
I'm glad you're still holding CHINA tokyopua :). Yes, you need fundamental analysis to find and especially hold a stock for a 300% move, because stocks never go up in a straight line and technical analysis gives you too many false signals.
Considering CHINA, we had this news ...
China.com Chosen Exclusive Online Partner of the 6th Asian Winter Games (http://biz.yahoo.com/bw/061211/20061211005566.html?.v=1)
... that had no effect on the share price, which was up a bit. I'll continue holding CHINA.
Quote from: David Randolph on December 11, 2006, 07:05:39 PM
I know why you want to have that short term trading style. You're either trading for monthly wages or you want to get rich fast, making, say, at least 20% a month? What if I tell you that if you make 50% a year, in 25 years you'll be one of the richest men on the planet? You would probably say "I don't care about 25 years down the road, I care about 5 years, and with just 50% a year I still won't be rich enough in 5 years time!" And then I would answer: "yes, but if you waste 5 years several times not doing the right thing, maybe when the 25 years are gone, you look back and think: "I could have done the right thing!"
Man, I should write an article with these thoughts (and probably I will, over the weekend). I wish you the best of luck vic666, thanks a lot for sharing your trading experience :)
QuoteI see what you mean about the main moves though. For example I recently realized that if I had held AOB though all its ups and downs over 1 year I would be up 300% on that position from where I bought it about $4 if I recall correctly. Of course, the skill is knowing which stocks can return 300% in a year to begin with!
I'm glad you're still holding CHINA tokyopua :). Yes, you need fundamental analysis to find and especially hold a stock for a 300% move, because stocks never go up in a straight line and technical analysis gives you too many false signals.
hi,
intersesting post david ( iam still holding china)
couple of things . does this mean that 3stocks on fire is changing to 3stocks for the long term? because every stock no matter how good their fundamental story will have technical failures which will take the stock lower for a period. Look at the 3sov picks and that is obvious. so when do you sell? when is fair value ? fundamentally no one really cares about a company ,say , like china , we only care that it goes in the direction of our purchase of the stock. the company does not benifit from our puchase because they don't get the money , ( only on the ipo) after that we are just selling to eachother. it adds intrinsic value to the company but if they go bankrupt you aren't gonna see the money from your share purchase .
like tech signals which are lagging indicators fundamentals can change behind the scenes without the share holder being any the wiser i.e. enron. ( well, they were crooks from the start.)
one morning you wake up and your stock has tanked from some peice of news.
i.e. diet.
do you buy aapl at 20 dollars in 2004 and now it is at 180dollars (pre split price) or do you find those stocks that rise 100% in a few days ? the market is full of both possibilities. as for being a rich man in 25 years! what good was it to jesse livermore? he commited suicide so it was totally useless to him . it obviously didn't make him a happy man. wareren buffet ? the same. didn't even give to his kids.
but he did give most of it away to the richest man in the world , bill gates, so at least it is utilized.
which brings me to my next subject. when you are a rich man what will you do with it?
what is it for . you can't take it with you and you can't leave it behind because it is part of the gossama thread that is this world in which we play a game called life believeing that something lasting is really occuring here. of course everything points to the total illusory nature of the universe....................lol
that doesn't mean i don't wish i had held gigm aob xing aapl and the list could go on.
lol :D sorry for the ramble but it is an interesting conversation to get into if anyone is willing . sorry to be so far off the topic of china.
maxi
The post by rickjust does echo some of my recent thoughts too (well, except for the gossamer thread stuff lol). I like the new emphasis on fundamentals because that is where my game is now weak. But I wonder about the goal to make 50% per year when 3SOF managed to make about 200% in its first year! I guess that is harder when you get larger capital invested? I am also wondering about the new momentum strategies here, like T3ML and STEPS, those have been working pretty well. Its kind of hard to resist those kind of opportunities, so how to strike a nice balance. The old super fast portfolio might be good to resurrect for those (just an idea ;)).
Quote from: tokyopua on December 11, 2006, 10:48:05 PM
I am also wondering about the new momentum strategies here, like T3ML and STEPS, those have been working pretty well. Its kind of hard to resist those kind of opportunities, so how to strike a nice balance. The old super fast portfolio might be good to resurrect for those (just an idea ;)).
As you've noticed most of 3SOF big gains fitted to that T3ML strat:
3sof big gains are: AOB, HSOA, BRVO, GIGM, VPHM, IIJI, XING, NVAX, CHINA & some others...
Why not use this kind of strategy backing up with fundamental analysis, I think it is proven, I've been trying to piece these together almost two years now. ;)
Quotedoes this mean that 3stocks on fire is changing to 3stocks for the long term? because every stock no matter how good their fundamental story will have technical failures which will take the stock lower for a period. Look at the 3sov picks and that is obvious. so when do you sell? when is fair value ?
Great questions rickjust, thanks :)
No, 3 Stocks isn't about short or long term, it is about achieving the highest profit with the least risk. I look to buy stocks that look attractive, both from a technical and fundamental standpoint. And I'll look to sell those stocks both when technical and fundamental analysis say sell. The ideal selling point is when a stock is fundamentally overvalued and the medium/long term trend turns from bullish to bearish.
Quotelike tech signals which are lagging indicators fundamentals can change behind the scenes without the share holder being any the wiser i.e. enron. ( well, they were crooks from the start.)
I agree.
Quoteone morning you wake up and your stock has tanked from some peice of news.
i.e. diet.
That can always happen, whichever your approach is.
Quotedo you buy aapl at 20 dollars in 2004 and now it is at 180dollars (pre split price) or do you find those stocks that rise 100% in a few days ? the market is full of both possibilities.
I'll buy both, if I can, but they're harder to find than it seems.
Quoteas for being a rich man in 25 years! what good was it to jesse livermore? he commited suicide so it was totally useless to him . it obviously didn't make him a happy man. wareren buffet ? the same. didn't even give to his kids.
but he did give most of it away to the richest man in the world , bill gates, so at least it is utilized.
which brings me to my next subject. when you are a rich man what will you do with it?
what is it for . you can't take it with you and you can't leave it behind because it is part of the gossama thread that is this world in which we play a game called life believeing that something lasting is really occuring here. of course everything points to the total illusory nature of the universe....................lol
Lol. I want to earn a lot of dollars because that is a byproduct of what I do. The more I earn over the long term, the better I did.
I loved your post. My last remark is: by all means, I didn't meant to say fundamental analysis is all there is to the game of stock speculation. It isn't, it is just a part of it, a rather important part, as technical analysis and inner psychology.
QuoteBut I wonder about the goal to make 50% per year when 3SOF managed to make about 200% in its first year! I guess that is harder when you get larger capital invested?
Well, the more the better Tokyopua, given that the risk is controlled, because if the risk is too high, it doesn't matter how much you make in a year, you will lose it back to the markets over the long run (as happened with Livermore - although probably his final bankruptcy had more to do with the 1929 - 33 economic depression and 90% fall in the Dow Jones than poor money management).
I say 50% because one should look for reasonable profits, or else he'll risk too much and lose it all. But of course, given my money management rules, I'll work to get the highest possible return.
QuoteI am also wondering about the new momentum strategies here, like T3ML and STEPS, those have been working pretty well. Its kind of hard to resist those kind of opportunities, so how to strike a nice balance. The old super fast portfolio might be good to resurrect for those (just an idea Wink).
Thanks for the idea Tokyopua. I don't know enough about the T3ML and the STEPS strategies, for now. It would be nice if they were tested on a portfolio like the 3 Stocks on Fire Portfolio for a long period, but of course Terliso and AussieTrader probably don't have time or the will to do it, as it brings great, great stress (not to me because I'm used to it, but I remember when I started doing it in March 1999 ...). I know they're purely technical approaches, and as I've been saying, I know there's more to the game of stock speculation than technical analysis (i.e. I don't think a man can get rich trading solely using TA, but I can be wrong, good luck :))
You say it's kind of hard to resist those short term opportunities, well, nobody ever said that long term successful speculation was an easy game. It is one of the hardest endeavors a man can take.
Quote3sof big gains are: AOB, HSOA, BRVO, GIGM, VPHM, IIJI, XING, NVAX, CHINA & some others...
I just found out there's a bug on the previous trades table that I need to ask Ramsburg to fix, but as I recall it, 3 SOF made good money on those stocks, but a lot less than what it should have made, given the moves the stocks made. Where I made 60% I should have done 200 or 300%. There's a big difference there.
QuoteWhy not use this kind of strategy backing up with fundamental analysis, I think it is proven, I've been trying to piece these together almost two years now. ;)
Thanks for the suggestion Terliso, good luck on your trades :)
Well, fortunately CHINA hasn't been making great moves lately, so we can spend time on these amusing issues. The stock barely moved today, I'll continue holding it.
Quote from: David Randolph on December 12, 2006, 05:00:58 PM
I just found out there's a bug on the previous trades table that I need to ask Ramsburg to fix, but as I recall it, 3 SOF made good money on those stocks, but a lot less than what it should have made, given the moves the stocks made. Where I made 60% I should have done 200 or 300%. There's a big difference there.
Fixed ;)
(http://www.3stocksonfire.org/closed_trades.php)
Down pretty heavy for seemingly no reason. It may be a good time to add shares here under $9.
Ouch. >:(Had to sell some here. Will look to buy again later.
Yes, I made the mistake of letting a small gain turn into a huge loss.
It could drop another $1 before reaching the trend line. We'll see what tomorrow holds, but I will be selling on any weakness.
This was indeed an ugly red marubozu. I wasn't expecting it, as the stock was behaving in such a calm manner.
I read this entire thread again (especially the initial analysis), to check if my foundation for this trade was really solid. The conclusion is that CHINA isn't terribly cheap, just somewhat cheap, in comparison with its industry peers.
I see that everything that's China related took a beating today.
Anyway, the company's historical revenue and profit growth is outstanding, and I can only expect this to continue over the next few years. I hesitate between "take your 21% profit now, or you'll cry tomorrow" and "hold on to those shares for the long term, or you'll cry for ten years when you get to 50 years old" ;D (because I believe short term trading won't make me money over the long term).
Imagine CHINA indeed continues to grow revenues 25% a year and profits 40% a year for the next ten years. Revenues in 2016 would be $2.8 B and EPS would be $8.39. Apply an average earnings multiple of 16 and CHINA would be a $134 stock in ten years time.
$134 means the share price would rise about 32% a year on average between now and 2016.
This is interesting. I'm not sure I'm satisfied with 32% a year. I know Warren Buffet would be pleased, since his long term average annual profit is 24%. But I would like to make 50%, is that even possible over the long term?
You might think: "of course, that's easy, even last week I bought a stock that went up 50%". But I tell you, nobody has ever done it before, nobody in the world has ever made 50% average annual profit for a period as long as 20 years. So, maybe, it is impossible. Buffet himself made 24% and he's the most successful stock investor ever.
Why does this CHINA thread always deviates from CHINA's stock?
I guess that if 24% are enough for Buffet, 32% should be enough for me, don't you agree?
But, of course, there are risks. I'm having a hard time making up my mind, but ok, I decide not to blow it all just because of a one day red marubozu, I'll continue holding CHINA.
There are flaws on my previous analysis. If revenue growth is just 25% for the next 10 years, EPS growth could never be 40%, it would be less. Why?
Because a $8.39 EPS translates into a $945 M net income in 2016, on just $2.8 B in revenues. That would be a 34% net profit margin, and that's impossible. The current net profit margin is just 5%.
So, let's go back a little. Say revenues grow 25% a year for the next 10 years, so revenues would be $2.8 B in 2016. Now apply a 5% net income margin and get $140 M in net income. This translates into an EPS of $1.24, multiplied by a 16 earnings multiple gives me $19.88 for the share price.
This means the stock's price average annual growth would be $8.55*(x^10) = $19.88 <=> x = 8.81%.
So, according to these estimates, buying CHINA now and holding for the next 10 years will deliver an average annual profit of only 8.88%.
That's not enough, but it is quite realistic. I guess the necessity is making me push harder on fundamental analysis. I have a 21% profit on CHINA, and a 10% loss on another stock I'll probably let go.
I'll take that profit, so the trading plan is to SELL CHINA around tomorrow's open !
David...pardon me for telling this, but I sense some confusion in the "holding period" of stocks in the 3SOF portfolio...or for that matter, a general uncertainty in the time frame for holing stocks...I mean, is 3SOF changing more into a long-term investment kind of portfolio, because if that's the case, you got to understand that many members in 3SOF (I'm sure I cannot speak for everyone) trade from a shorter time frame with lesser capital to invest...
it's essential that we have a separate topic to discuss and understand better where 3SOF in general is going...and may be have some feedback. I can sense your strategy nowadays has evolved into a longer term holding one...but if that's the case, I believe it's better to outline this clearly in some fashion.
If I've misunderstood something please forgive me.
I'm very sleepy because it's almost 2 AM here, so my short answer is:
"If it's good for long term I'll hold long term. If it's good for short term I'll hold short term. If it's no good I don't want it."
See you tomorrow vic666 :)
sleep well David..you sure must be extremely busy with several things to do - trading, administering the site, replying to all of us so patiently. Man, you sure work hard! ;)
lemme tell you...You (and ur team) are doing one fantastic job! :)
Well I kept all my shares ...did you get scared tell me why the sale. Just one correction and you bailout. What is the thinking behind this..looks like bad decision.
John
Quote from: july1 on December 14, 2006, 12:08:19 PM
Well I kept all my shares ...did you get scared tell me why the sale. Just one correction and you bailout. What is the thinking behind this..looks like bad decision.
John,
I see that this is your first post, so Welcome to 3SOF.
Whether you agree or not, and you obviously don't since you've held your shares, David gave very clear reasons why he sold CHINA, if you read his last message.
We probably all have a different opinion about where to buy and sell stocks, Sometimes they go up after we sell; sometimes they go down after we sell.
CHINA has gone up since the open, which is great since you're still holding, but "what if" it had gone down?
David isn't always going to "be right," nor will any of us always "be right." And, we don't even look at it that way. Everyone has a different opinion, and we all try to play the market the best way that we can, and try to share our ideas, and help each other out.
But, everyone makes different decisions.
You don't agree with David on his selling of CHINA, and that's perfectly fine. But, please understand that he can't possibly explain his decisions to everyone's individual satisfaction.
David gave his reasons for selling, and since you've decided to continue holding CHINA, I know that David and everyone else at 3SOF wishes you good luck.
Again, welcome to 3SOF!
hi,
i also kept my shares and was contemplating buying more at the low to sort of average down but i didn't ,i had a feeling it would bounce back today because of the lower open and i gave myself a little more wiggle room on my stop loss. but it is now over 9.
even though david makes the decisions for 3sof you still have to make your own and wear the consequences . right or wrong doesn't really matter , we just speculate on the information we have available wether tech or fundamental and act on that.
in the end he didn't make a bad decision or a good one just a decision based on what he saw. his portfolio is at 250% because he trades well and protects capital.
i am sure david would love to see this fly for us still holding this stock,
thanks,
maxi
p.s. would love to see it hold 9
Hi,
It seems i did not see why the reasoning for the sale please post the reason, because before the sale it was keep CHINA it has good long and short term.
Which is what i thought we were doing. Is this stock all of the sudden a poor choice to keep?
John
Quote from: july1 on December 14, 2006, 02:11:14 PM
Hi,
It seems i did not see why the reasoning for the sale please post the reason, because before the sale it was keep CHINA it has good long and short term.
Which is what i thought we were doing. Is this stock all of the sudden a poor choice to keep?
John
I don't understand John, you didn't read my update or you disagree with the analysis and selling decision? My update is on the previous page of this thread, or else click here (http://www.3stocksonfire.org/trading/index.php?topic=7262.msg80934#msg80934).
When I saw the stock opening with a down gap I suspected it would make an intraday recovery, but I don't see it running to $10 plus anymore. All the data is in, and with it, the stock looks fully valued. If there's a slight miss of its internal estimates it will tumble.
At first I saw it as a good long term holding, but with time I learned more and I don't think CHINA is attractive anymore.
But, of course, I hope everybody at 3 Stocks gets a good profit in it (3 SOF Portfolio made 20%). I hope I'm wrong. Good luck :)
Strange, the link isn't going to the right place, here's the quote from the analysis on page 5 of this thread:
Quote from: David Randolph on December 13, 2006, 05:59:48 PM
There are flaws on my previous analysis. If revenue growth is just 25% for the next 10 years, EPS growth could never be 40%, it would be less. Why?
Because a $8.39 EPS translates into a $945 M net income in 2016, on just $2.8 B in revenues. That would be a 34% net profit margin, and that's impossible. The current net profit margin is just 5%.
So, let's go back a little. Say revenues grow 25% a year for the next 10 years, so revenues would be $2.8 B in 2016. Now apply a 5% net income margin and get $140 M in net income. This translates into an EPS of $1.24, multiplied by a 16 earnings multiple gives me $19.88 for the share price.
This means the stock's price average annual growth would be $8.55*(x^10) = $19.88 <=> x = 8.81%.
So, according to these estimates, buying CHINA now and holding for the next 10 years will deliver an average annual profit of only 8.88%.
That's not enough, but it is quite realistic. I guess the necessity is making me push harder on fundamental analysis. I have a 21% profit on CHINA, and a 10% loss on another stock I'll probably let go.
I'll take that profit, so the trading plan is to SELL CHINA around tomorrow's open !
It was a though decision.
Agreed with David and Melf on their points. CHINA could have gone the other way like EGHT did recently, and it is prudent to take profits while they are to be had when the chart and fundamentals dictate.
I will also add, the resulting opened position from selling CHINA and ASPV accomodated the addition of another Randolph Rocket, namely BFLY, which is currently up 7.3% on spectacular volume with room to run again higher. Together with GOAM being up 17% today, 6 other 3SOF picks and NMKT, my portfolio is up 4.3% at the moment, so CHINA has become a distant memory. Like David said a long time ago, sometimes stocks are like oranges, you squeeze the juice out of them and move on.
All this being said, best of luck to all fellow traders still holding, may CHINA rock on to new highs!
Hi : Very new here. Enjoying the site and discussions.
Have to also say that I did not see the info on why CHINA was a sell so was confused for a while.
Poorknight
CDC Soars on Analyst Initiations
Thursday December 28, 3:08 pm ET
CDC Shares Rise After 2 Analysts Initiate Coverage With Bullish Ratings
AP (AP) -- -- Shares of CDC Corp. rose roughly 10 percent Thursday after two analysts initiated coverage of the Hong Kong-based software maker with positive ratings.
CDC shares rose 88 cents, or 10.5 percent, to $9.27 in afternoon trading on the Nasdaq. They have ranged between $3.07 and $9.58 over the past year.
Raymond James & Associates analyst Mike Latimore on Wednesday began coverage of CDC with an "Outperform" rating. In a note, he said the company is uniquely positioned to take advantage of Asia's growing internet services market.
"CDC is in the enviable position of having leading technology ... in the small and mid-sized business markets while competitors are going through the distractions of acquisitions," wrote Latimore.
The analyst set a 12-month target price of $12, and projected 2007 earnings of 48 cents per share.
Oppenheimer analyst A. Sasa Zorovic on Thursday started coverage of CDC with a "Buy" rating and a $12 target price.
Zorovic predicted that in the first half of 2007 CDC will spin off each of its main business units into three seperately trading entities: CDC Software, CDC Games, and China.com, the company's news and information web portal.
"While we are bullish on all three lines of business by themselves, we do not see a compelling reason for all of them to trade as a single security," Zorovic states.
Zorovic set earnings-per-share estimates of 52 cents for 2007 and 61 cents for 2008.
I am going to take a position in china today. Some I feel this wont stay below 10 for long. :)
I think you're right. I just sold this on Dec. 23 and now really frustrated with myself. And now I can't even take a position because i'm fully invested. :'(
Supposedly, it's valued ~$14-$16 with all three of its sub-companies and should be worth more with the anticipated growth. I just read that somewhere so I really don't know WHY it is. I'm do a lot of TA. I don't know much about FA though so you may want to do your own DD. Anywho...good luck to ya!
Even though i'm tearing myself apart from the China sell, I still decided to keep AOB. If you're interested in the China plays, go ahead and check out AOB and see what you think.
Press Release Source: CDC Corporation
CDC Corporation Files Second Lawsuit Against Mgame in Korea
Friday October 19, 8:34 am ET
CDC Games Clarifies Payment History with Mgame
BEIJING--(BUSINESS WIRE)--CDC Games, a business unit of CDC Corporation and pioneer of the "free-to-play, pay for merchandise" model for online games in China, today announced that its parent company, CDC Corporation (NASDAQ: CHINA - News), has filed a lawsuit in the courts of Korea against Mgame, the developer of Yulgang. The lawsuit is for breach of contract and alleges that Mgame has breached contractual obligations owed to CDC Corporation by failing to provide certain financial and operating data and other information which Mgame is required to provide to CDC Corporation as a shareholder of Mgame.
As announced on March 23, 2007, CDC signed a definitive agreement to make a strategic investment in Mgame. CDC completed this investment on May 23, 2007. As a result of this investment, CDC became Mgame's largest external shareholder while extending its license of Yulgang to 2010.
"CDC Games believes it has been a strong partner to Mgame for the last three years," said Xiaowei Chen, Ph.D., president of CDC Games. "We have sought to live up to our side of the bargain as demonstrated through our long, consistent payment history to Mgame. It is regrettable that we need to take these actions because Mgame has failed to live up to their side of the bargain."
Added Dr. Chen, "We continue to serve the interests of our loyal game players of Yulgang with uninterrupted service. In fact the average concurrent users of Yulgang during the last two days has actually been higher than each of the last 1-month and 2-month daily averages. For our users, it is business as usual and we continue to book revenues as usual."
CDC Games has continued to make obligatory royalty payments to Mgame for its operation of Yulgang, which continues to operate in China today. Over the last 3 years, since July 2005, CDC Games has made 25 consecutive monthly royalty payments to Mgame, with an average fee of US $530,105 per month. Total payments to Mgame, including license fees and royalties over the life of the relationship, have amounted to over US $15 million. CDC Games just made its most recent royalty payment to Mgame last week.
Dr. Chen continued, "We believe that the length of our relationship with Mgame as well as the aggregate size and consistency of our payments have made us one of Mgame's most viable partners. CDC has made 25 consistent regular monthly payments to Mgame which were on time and consistent with our contractual obligations. The fact that we have continued to make payments through last week is indicative that we still believe in this relationship and want it to continue. We hope we can come to an amicable agreement with Mgame as we continue to have active dialogue."
The lawsuit in Korea is in addition to the lawsuit CDC Games has filed in the courts of Hong Kong against Mgame for breach of contract alleging that Mgame has not been providing adequate technical support of Yulgang, and Mgame has not been supporting CDC Games in their efforts to combat pirate servers. CDC Games will continue to aggressively pursue all available legal options to protect its interests and the interests of its game players.
About CDC Games
CDC Games is one of the market leaders of online and mobile games in China with more than 100 million registered users. The company's hit title Yulgang was among the first "free-to-play, pay-for-merchandise" online games in China and has received the "Top 10 Most Popular Games" award from the China Game Industry Annual Conference (CGIAC) for three consecutive years, in 2005, 2006 and 2007. Currently, CDC Games offers six popular MMO online games in China that includes: Yulgang, Shaiya, Special Force, Mir III, Shine and Eve Online. In March 2007, the company announced the formation of CDC Games Studio to establish strategic relationships with selected games development partners to accelerate the development of new, original online games for China and other targeted global geographies. CDC Games anticipates being able to deploy up to $100 million for CDC Games Studio investments through contributions from CDC affiliated companies, external partners and its internal resources. In August 2007, CDC Games formed a new subsidiary called CDC Games International (CGI) and CDC Games USA to launch new games internationally and to position CDC Games as a global publisher of online games. For more information on CDC Games, visit: www.cdcgames.net.
About CDC Corporation
The CDC family of companies includes CDC Software focused on enterprise software applications and services, CDC Mobile focused on mobile applications, CDC Games focused on online games, and China.com focused on portals for the greater China markets. For more information about CDC Corporation (NASDAQ: CHINA - News), please visit www.cdccorporation.net.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the possibility of resolving the dispute with Mgame, the success of any litigation against Mgame and other statements that are not historical, the achievement of which involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward looking statements, including the following: (a) the uncertainty of litigation; (b) the continued popularity of Yulgang; (c) the future growth of the online games industry in the China market; (d) the challenge in combating pirate servers; and (e) the willingness of other online games companies, media companies and governmental authorities participate in OGAAP. Further information on risks or other factors that could cause results to differ is detailed in filings or submissions with the United States Securities and Exchange Commission made by CDC Corporation in its Annual Report for the year ended December 31, 2006 on Form 20-F filed on July 2, 2007. All forward-looking statements included in this press release are based upon information available to management as of the date of the press release, and you are cautioned not to place undue reliance on any forward looking statements which speak only as of the date of this press release. The company assumes no obligation to update or alter the forward looking statements whether as a result of new information, future events or otherwise.
Contact:
CDC Corporation
Investor Relations
Monish Bahl
678-259-8510
[email protected]or
CDC Software
Media Relations
Scot McLeod
678-259-8625
[email protected]--------------------------------------------------------------------------------
Source: CDC Corporation
The "CHINA" Threads in Previous 3SOF Picks
Have been merged.
Got the go ahead to do so from Ramsburg.
I will be working here on this board to merge other threads also.
I will leave you Friday's closing chart while I'm in this thread.......
Good trading to all !
Regards,
Your fellow trader @3SOF
setravis
Updated view.......
52wk Range: 6.01 - 11.45
Volume: 2,183,728
Avg Vol (3m): 2,587,320
Technicals
MACD - Bearish
Last Price Quote is:
-6.83%below 13-day MA
-8.23%below 50-day MA
RS Rating: 12
Fundamentals
Key Data:
Market Cap (M): $836.79
P/E Ratio: 78.27
PEG Ratio: 0.898618
Next Earnings: 11/13/2007
Last Analyst Rating: Mkt Outperform
Friday's closing chart.......