China MediaExpress (US:CCME)

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China MediaExpress (US:CCME)

Post  Max on Fri Jan 14, 2011 10:53 am

Picked this up on monday at 17.75. Dropped to about 17 on tuesday. Sold at 20.37 on wed. 15% gain.

I took the tip from Old School Value, and then researched it myself and decided the valuation looked good. I am pretty sure I sold out early as this could reach $30 based on current EPS of $2.36 and book value of $5. If you factor in expected growth (this company has contracts to provided television-based advertising on buses in China), then who knows what the stock price could go to.

I didn't really research it all that well, trusting in the recommendation of a site I have come to repsect. I did not post it here, since I did not want to pass on a speculative tip that I am only taking on faith. I am buying LSG on the same grounds (different source), so I will not post the analysis here.

Max
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Re: China MediaExpress (US:CCME)

Post  lukera on Fri Jan 14, 2011 1:01 pm

Nice job on the 15%!!!

As far as posting speculative buys, I think there is nothing wrong with it so long it is presented as such.

Sometimes speculation is needed to point people in the right direction for a starting point to research!!!

Cheers!
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Re: China MediaExpress (US:CCME)

Post  Max on Wed Jan 19, 2011 2:23 am

Back in on CCME at average of $19.30. Expecting to bail somewhere between $20-25.

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Re: China MediaExpress (US:CCME)

Post  Max on Wed Jan 19, 2011 10:52 am

Sold at $21.02. Gain of 8%.

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Re: China MediaExpress (US:CCME)

Post  Max on Thu Jan 20, 2011 11:06 am

Back in at 19.75. Going to try it one more time.

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Re: China MediaExpress (US:CCME)

Post  Max on Mon Jan 24, 2011 11:00 pm

Average cost is now $19.50. Current price is $19.15. Ouch. I believe in the valuation and trust others with regard to the growth story, so I am confident to wait and will keep averaging down as necessary.

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Re: China MediaExpress (US:CCME)

Post  Max on Thu Jan 27, 2011 10:56 am

Sold at $21.45 this morning. 10% gain in approx 1 week. Slow and steady.

Based on the news of the short squeeze, I think this stock is going to the moon, and probably should have stayed in.

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Re: China MediaExpress (US:CCME)

Post  Max on Sat Jan 29, 2011 12:59 am

Bought at $20.75 and sold at $21.60 today for 4% gain. Seeing how long this streak of trading can last, then I post a summary of all trades.

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Re: China MediaExpress (US:CCME)

Post  Max on Tue Feb 01, 2011 4:31 am

Ouch, what a beating. Luck finally caught up to me. It turns out this company may be a fraud. Hanging in there to find out.

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Re: China MediaExpress (US:CCME)

Post  Max on Wed Feb 02, 2011 11:21 am

OK, based on the research I have found (admittedly nothing concrete), I can see there are some legitimate concerns, but nothing that could not be explained away. The balance of evidence in support of the company is taking the auditors, analysts, and private investors on faith that they have done their homework on the stock.

I am holding on, because I think in a few days when they release the new financial statements, it could change things. Not buying more, because I am already own too much, and there is still a looming possibility that the rumours of fraud are true.

The price can move dramatically either way. If only I was into options.....

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Re: China MediaExpress (US:CCME)

Post  jkucher on Wed Feb 02, 2011 9:26 pm

Hmmm, Options. I'll look into it

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Re: China MediaExpress (US:CCME)

Post  jkucher on Wed Feb 02, 2011 9:31 pm

Too Expensive

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Re: China MediaExpress (US:CCME)

Post  Max on Thu Feb 03, 2011 10:28 pm

Come on! A second guy trashing this stock?

The first guy was apparently fired and charged with some kind of fraud at the investment firm he worked for.

This guy, Carson Block, Esq, was a lawyer who was apparently disbarred for some other kind of fraud. I was curious what esquire meant, so I looked it up on wikipedia:

In the United States, the suffix Esq. is most commonly encountered among individuals licensed to practice law. This usage applies to both male and female lawyers. The term was assumed by the legal profession, and not granted to it by any governmental authority. Some states also address its ministerial officers (such as justices of the peace, commissioners of deeds, and notaries public) using "Esquire" as a suffix.

While it is often claimed that some jurisdictions within the U.S., such as California, expressly indicate that "Esq." is for use by lawyers only, what those states actually state is that using the title "Esquire" is one among many factors that, in certain circumstances, may be taken as evidence that someone is falsely claiming to be a licensed member of the bar.

OK, maybe it takes a con to know a con or something like that, but I read the reports. While it does raise a lot of doubts, it also could very easily be explained away.

With financial statement release in a week, I am going to have to continue to wait it out and see if real numbers change things, but right now, I am down $7,000 on this stock from the peak and counting (approx 40-50%). I only made about $2,000 on it before it crashed, so it is still a pretty deep hole.

Tempted to average down, but if I had done so earlier in the week after it dropped from $19 to $16, I would have been crushed today when it dropped from $16 to $11.

Question is: even if they clear their name, will the stock rebound or are investors permanently scared off because of the mentioned of fraud?

Max
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Re: China MediaExpress (US:CCME)

Post  lukera on Thu Feb 03, 2011 11:18 pm

I would hedge a bet that if the financial statements come out to back up the their legitimacy *sp then you will be rewarded handsomly.

However, if the fake lawyer is telling the truth, be quick with your trigger finger!

As a side note: i think it is relatively easy to become whatever you want in the U.S. as long as you pay the money for it.

Quick example below:



$30 for the licence and I am legally allowed to marry anyone in the state of Michigan....tell your friends (I give discounts Smile
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Re: China MediaExpress (US:CCME)

Post  Max on Fri Mar 11, 2011 9:24 pm

OK, trading halted today pending news. Some rumours that there is an offer to buy out the company, and with this level of short activity, that may send the price skyrocketing on monday. However, before I get my hopes up, I should also entertain the possibility that whomever is offering to buy the company will not be offering top dollar.

Financials should be released in a few days (with auditor review).

This is a stock to watch to learn a lesson in the future on how a short sell attack goes down. Either we learn that the shorts are generally right, and would not take what I consider to be an extremely risky position betting on a company to go down unless they were sure of themselves. Or we learn that shorting over false accusations will correct itself in time and we get to see how a massive short squeeze plays out.

Either way, we should know by monday.

HF (the other chinese stock I own) is one that makes me a little more nervous (the company admitted in the past financial statements to having a minor deficiency in their controls, their CFO submitted his resignation, and one of the board directors has resigned shortly after that.).

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Re: China MediaExpress (US:CCME)

Post  Max on Tue Mar 15, 2011 10:25 am

OK, news is out. The auditors resigned, and the CFO quit. This company is definitely a fraud. The stock is still halted for trading and I am not sure how I should play it once trading resumes. Just bail at whatever price I can get?

So, lessons learned:
-Just because an auditor has signed off doesn't mean it is not a fraud (auditors set it up so that the responsibility is generally with management and not with the auditor).
-Just because a big name investor buys it doesn't make it legit. (Hang Greenberg of Starr investments made a huge initial investment, and inserted on of their people on the board of directors).
-Short sellers are unlikely to pick on a completely innocent stock considering the amount of risk inherent in short selling. From now on I will give the shorts the benefit of the doubt rather than assuming a short selling conspiracy.
-Stick to position limits and entry into position with smaller increments (I got greedy and put $15k in this stock almost all at once since it was moving so fast). I will post a summary of my trading activity for this stock like the success stories.
-Glad I did not use TFSA or RRSP, so that I can deduct the loss from other capital gains and not lose any TFSA contribution room. Speculative stocks will always be risky to include in TFSA, but then again, I should have the assumption I will make a profit overall, otherwise why am I investing in the first place.

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Re: China MediaExpress (US:CCME)

Post  Max on Thu Mar 17, 2011 12:47 am

Here is the history of my trading with CCME. It was looking pretty good, keeping discipline, until..... my last purchase. I still haven't sold as the company is halted for trading. Current price is $11, and will probably start trading again at $4 or less.

TypeCompanySymbolDate# SharesPrice (CAD)Total Amount
BuyChina Media ExpressUS:CCME2011-1-1020017.75-3550
SellChina Media ExpressUS:CCME2011-1-1320020.374074
BuyChina Media ExpressUS:CCME2011-1-1410019.6-1960
BuyChina Media ExpressUS:CCME2011-1-1810019.35-1935
BuyChina Media ExpressUS:CCME2011-1-1810019.1-1910
SellChina Media ExpressUS:CCME2011-1-1930021.026306
BuyChina Media ExpressUS:CCME2011-1-2020019.75-3950
BuyChina Media ExpressUS:CCME2011-1-2410019.62-1962
BuyChina Media ExpressUS:CCME2011-1-2420019.06-3812
SellChina Media ExpressUS:CCME2011-1-2750021.4510725
BuyChina Media ExpressUS:CCME2011-1-2820020.75-4150
SellChina Media ExpressUS:CCME2011-1-2920021.64320
>
Total2196
>
BuyChina Media ExpressUS:CCME2011-1-3180019.5612-15648.96

Plain and simple: I got greedy. I stopped using slow and steady purchases, and went all in with a big purchase right away, keeping faith in my analysis of the book value and earnings and expecting a quick turnaround. I ignored book value and traded on earnings. I grew tired of waiting for deals and lowered my standards of research into the financial statements. I based my opinion on faith in the research of others. I ignored the short sellers evidence that there was a problem with the stock because the evidence was weak and from sources that lacked credibility. I believed in a short selling conspiracy as more likely than a corporate consipracy. I ignored the balance of risks: relatively small upside vs. potentially massive downside with nearly equivalent probabilities. I was afraid to take a loss even though I had ample chance to get out with only minor loss. I was afraid to admit I was wrong, which kept me in the stock longer than I should have been.

It is an expensive lesson, but I have moved on and continue to trade. I have a similar position in Hanfeng Evergreen. Logic tells me that after my experience with CCME I should cut my loss on HF as well and move on. It takes a special kind of idiot to get hit so hard and keep coming back for more, but thats what I am going to do by continuing to hold HF. Oh well, "If your gonna be dumb, you gotta be tough".

Max
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Re: China MediaExpress (US:CCME)

Post  Max on Sat Dec 17, 2011 1:04 am

Forced to sell at $0.05 to take a tax loss. OK. Moving on now, and not looking at this one again.

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