3SOF

Can somebody please explain to me what the effect on a stock is if it was on the short list for 13 days?

At the end of the 13 days do they try to buy the stock back and cover therefore causing the stock to go up?

Where to you think AOB is headed short term - the PE seems to be very low and the fundamentals are good.

Quote from: KCScott on February 10, 2006, 09:29:15 AM
La-Onda,

In order to short, you must "borrow" the shares to sell them. You buy them back later (hopefully at profit and return them to the owner) These shares are always (I believe) held in by brokerages in Margin Accounts

Obviously this means there is a finite amount of shares available.

Naked shorts means someone was allowed to short the AOB without those shares being available to borrow. If your link is correct, it means those who are Naked short will be required to cover their positions beacuse the shares they have sold do not exist.

I agree with KCScott's explanation. I would only change the last phrase from «...because the shares they have sold do not exist.» to «...because the shares they have sold were not previously borrowed.»

Over the last 3 trading days the company released reports about those 17,387,500 new shares that we already knew for some time, no surprise here.

Quote(2) Assumes that the selling shareholder will resell all of the shares of our
common stock offered hereunder. Applicable percentage of ownership is based on
62,635,788 shares of our common stock outstanding as of January 23, 2006,
together with securities exercisable for, or convertible into, shares of common
stock within 60 days of January 23, 2006.

So, on a fully diluted basis the company has 62,635,788 outstanding shares, so the market cap is about $324M (I'm assuming all warrants will be converted by private investors, but that's quite an assumption, since the conversion price is $6.90). I expect net income in 2005 to come in at about $10.7M, so the earnings multiple is about 30.

Is AOB overvalued? Perhaps ... or maybe it isn't as great as opportunity as I thought. I need to study some more before I jump into conclusions, but as I see more and more stocks maybe I'll find that AOB does not belong in a short list of 10 stocks to hold for the long term.

In the meantime, I have to say I'll continue holding AOB for the long term, as the stock continues to trade between $4.90 and $5.90.

We've learned yesterday that Morgan Stanley owns 6% of AOB. Probably we're about to hear the 4th quarter results rom the company, since they reported the 3rd quarter results on November 14th.

I hope revenue is about $15M and EPS is higher than $0.08, continuing its growth path (on the previous 3 quarters, AOB's revenues were $9M, $11M and $13M on the latest quarter).

If EPS comes in at $0.10 (would be great), the earnings multiple would be $5.09/$0.40 = 12.73, which would be very attractive, considering the company's growth.

Getting a little more confident, let's see what the quarterly presentation brings. Technically the stock is still trading between $4.90 and $5.90.

I received my "information" statement for AOB yesterday.

On Nov. 28 they received consent to increase the total shares from 60m to 150m and the issuance of the private placement, of 60M shares at 4.80.

The private placement is completed, but I don't see what the disposition of the other 30M shares is. Perhaps this is why the price has struggled to break the $6 barrier.

David:

  I would like to give some Chinese companies' stocks which at current value are quite attractive:

HRAY, LTON, SNDA all at around year low.

HRAY spent the whole year in $7.8 - $11.8 range. Most time it is traded in $8.3 - $10.3 and now $8.10.

Last three quarter earnings: $0.31, $0.25, $0.22. It will report earnings next Monday (estimate $0.17).

So this year's earning about $0.95 PE = 8.

May be, we can wait for its earning release to do futuer analysis.

SNDA: business transition year. CSCO holds 7%. It spent last two months to build its base.

LTON: all time low $6.00 and now $7.11. Long term very positive.

CHINA: announced that it bought an India outsourcing company today.

SVA: has the potencial to gain big once its production line put into use in the near future.

AOB: Short Interest UP 3.6% to 1.8M in Feb 2006
Wednesday, February 22, 2006 16:15 ET

According to new short interest data from AMEX, short interest for American Oriental Bioengineering Inc (AMEX: AOB) INCREASED 3.6% to 1,764,618 shares for the month ended mid-February, 2006.

SYMBOL       JANUARY        FEBRUARY        CHANGE       %CHANGE  DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
AOB            1,702,791       1,764,618         +61,827        +3.63%           2

Based on AOB's 20-day average daily share volume of 1,054,495, it would require approximately 2 day(s) of buying to cover this short interest.

Quote from: shawFund on February 21, 2006, 01:37:13 PM
David:

  I would like to give some Chinese companies' stocks which at current value are quite attractive:

HRAY, LTON, SNDA all at around year low.

HRAY spent the whole year in $7.8 - $11.8 range. Most time it is traded in $8.3 - $10.3 and now $8.10.

Last three quarter earnings: $0.31, $0.25, $0.22. It will report earnings next Monday (estimate $0.17).

So this year's earning about $0.95 PE = 8.

May be, we can wait for its earning release to do futuer analysis.

SNDA: business transition year. CSCO holds 7%. It spent last two months to build its base.

LTON: all time low $6.00 and now $7.11. Long term very positive.

CHINA: announced that it bought an India outsourcing company today.

SVA: has the potencial to gain big once its production line put into use in the near future.

Thanks for these stocks shawFund, I'll take a look at them when I have some more time.

Considering AOB, the stock may have a somewhat larger valuation, like TRAD, because recent growth has been very high. I hope the company continues to deliver exceptional growth going forward.

I'm not very confident on this pick, but I'll give it some more time to study and collect information. In the meantime, I'll continue holding it.

Now I remember why I choose AOB to update on the LTOF Portfolio, it was because KCScott sent me an e-mail about the company.

Unfortunately I don't open my e-mail box for about a week or so, so I have thousands of e-mails (honestly, I'm afraid of my e-mail box - don't think I'm crazy, I ain't, I just feel it enters my privacy ... strange thought).

Anyway, I'll open that box today, read KCScott's e-mail and write about AOB again tomorrow.

Received from Scott Trade in Mid February:














Also, I called the NY office on Friday to speak with IR.
Talked to Mr. Hung who said announcement for earnings release would be coming up soon.
They must release by 3-31 - He indicated Management had been very busy putting the money from the offering "to work" - could not elaborate further

check the link:

http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=4012271

Wow, AOB got slaughted today.  Took over $800 loss in one day. What do you think of the stock?

I did not own AOB now because I believe that it is fully valued at this price. Their private placement added the pressure.

Also the company is located in HEILONGJIANG province, the center of China's fraud state.

Even I first bought it last July, I was doubt about this company's credibility.

But I was over cautious at that time because they need to pump up the stock price in order to get private placement. As a result I only took small positions each time, except once that I hit the wrong botton and bought 15,000 at the begining of this year.

AOB on the other hand may provide good chance to take position. Want to wait for their earning release.

(1) Unless otherwise indicated, the warrants represented are exercisable at
$6.50 per share of our common stock.

(2) Assumes that the selling shareholder will resell all of the shares of our
common stock offered hereunder. Applicable percentage of ownership is based on
62,385,788 shares of our common stock outstanding as of March 1, 2006, together
with securities exercisable for, or convertible into, shares of common stock
within 60 days of March 1, 2006.


Unless I'm not understanding something, these warrants aren't exercisable until the share price hits $6.50

I don't think Alpha Capital A.G. & Longview Fund, L.P. are in this to lose money, so unless I'm missing something, That would seem to be very bullish development.

AOB is sitting below the BollingerBand and seems to have dropped below support. Where do we think this one is going? It looks oversold according to the Williams % (sorry don't know how to post a chart).

If the PE is only 15 - doesn't that leave alot of room fundamentally for this stock price to grow?

Well, today was down right ugly.    I had been sitting with a decent profit until today.  I was hoping to ride this one at least to earnings.  I checked on the institutional buying for today and saw there was a strong Buy message around 2:00pm for 500K at $4.62.  I am not sure how reliable Thomson Finance numbers are.  David, I was wondering if you had any thoughts on why the sudden drop and where to move from here?  Not quite in the red yet.  I appreciate any feedback.

Alien