Zhonpin (HOGS), my smallest company by far in the fund has earnings out today and the report is very solid, with good guidance. That said, it hasn't matter as the stock has been decimated despite today's 8% increase. On the plus side it is nice to see an AP report on earnings - usually one has to dig into SEC filings to find anything out about this company. This is yet another case where fundamentals mean nothing as hedge funds ping pong between chasing commodities or "early cycle" plays and ignore companies with good fundamentals or who do nothing but execute. Reminds me of the Blue Coat Systems (BCSI) saga or some of the solar stocks of late. If the hedge funds don't have you as a buy in their playbook - you can report good earnings all day and night - your stock will be trashed. For someone who tries to focus on fundamentals, it's a very difficult game right now; you get your 1-2 day pop and then the stock resumes trading in purgatory.
- China-based meat processor Zhongpin Inc. said Tuesday it swung to a profit in its fourth quarter due to higher pork prices that led to a big revenue boost in the company's largest division.
- For the quarter ended Dec. 31, the company reported net income of $5 million, or 17 cents per share, compared to a loss of $1.5 million, or 7 cents per share in the year-ago quarter. Excluding a non-cash compensation charge, the company said it earned 19 cents per share.
- Sales more than doubled to $100.6 million from $47.7 million in the fourth quarter of 2006.
- The company said its sales and revenue were helped by market expansion and a rise in the price of pork products in China.
- For the year, profit jumped to $18.5 million,or 80 cents per share, from $4.1 million, or 20 cents per share in the prior year. Revenue more than doubled to $291.4 million from $143.8 million in 2006.
- Zhongpin Inc. said Tuesday it expects 2008 profit to rise at least 62 percent.
- For 2008, the company estimated earnings between $30 million and $33 million, or $1 to $1.10 per share. In 2007, the company earned $18.5 million, or 80 cents per share.
- Zhongpin predicted revenue of $490 million to $520 million.
So 100% trailing growth, and 60%+ forward growth, all for a 10 PE ratio. And they say the market is rational.
Long Zhongpin in fund and personal account
1 comments:
I like this pick of yours too. But we both know, it's the big funds that set the price here.. and I'm afraid it is dead money until the chinese stocks (FXI) come out of current downtrend. Until then, its going to be viewed as speculative and toxic.
I'm on the sideline until the FXI picks up and shows some signs of a bottom. So far, it seems to be showing some positive divergence.. but we'll see if it can take out the downtrend resistance.
Post a Comment