Sino Forest Corporation (TRE.T)

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Sino Forest Corporation (TRE.T)

Post  lukera on Fri Jun 03, 2011 12:22 pm

Wow...check out this damning report and subsequent 58% drop in share price:

Muddy Waters Initiating Coverage on TRE.TO, OTC:SNOFF – Strong Sell


Scandalous.
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Re: Sino Forest Corporation (TRE.T)

Post  Fred on Fri Jun 03, 2011 4:42 pm

http://www.prnewswire.com/news-releases/sino-forest-comments-on-share-price-decline-123098823.html

Where is the real scandal?

Does this present a buying opportunity?

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Re: Sino Forest Corporation (TRE.T)

Post  Fred on Fri Jun 03, 2011 4:53 pm

http://www.netcastdaily.com/broadcast/fsn2008-0531-3b.mp3

This is a pretty good discussion. There is a part that starts around a third of way through that specifically that relates to this kind of scandal. I think its called "bash and cover". The discussion is pretty long, but worth a listen.

Fred

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Re: Sino Forest Corporation (TRE.T)

Post  lukera on Fri Jun 03, 2011 6:43 pm

yeah the company is firing back....50/50 shot here if you think the research report is right then you short(I have yet to short a stock). If the company is right then you gobble up as many shares as you can!

Either way, the share price will never get back up to it's former glory. at least not in the near future.

This reminds me of the recent situation with intertainment media (int.v) and the report released from seekingalpha.com.

Very interesting to watch. either way, I don't have the cojones to play the day trade on these situations.

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Re: Sino Forest Corporation (TRE.T)

Post  Max on Sun Jun 05, 2011 10:20 am

This was exactly the kind of information that got me into trouble with CCME. I bought at $19, and it is now trading at $1. I doubted the accuracy of these "reports", but should have taken a reasonable view that the balance of risk/reward has changed to where it was no longer worth the risk to continue to hold the stock.

The valuation looks very attractive. The book value (based on 2010 annual report) is approx $5 (conservative estimate), and the cash flow from operations is $2-3 per share. EPS is about $1 (conservative estimate of 300M shares outstanding).

The audit report is signed by Ernst & Young LLP. Do not know if this is the same Ernst & Young we know and love or the chinese version. Still, the report states clearly that management is responsible for fraud and the auditor is only responsible for making an opinion on the information they are given.

Again, I think if the allegations are wrong, the stock will go through the roof, but there is definite smoke here. How hard is it to buy a bunch of worthless land and say they are adding to inventory of trees? Who is counting?

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Re: Sino Forest Corporation (TRE.T)

Post  Fred on Mon Jun 06, 2011 11:06 am

Looks like the market favours the company's stance... But I'm put off after the drop they experienced ... and I'm put off the market for a while too.

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Re: Sino Forest Corporation (TRE.T)

Post  lukera on Mon Jun 06, 2011 12:13 pm

Yes, it does look like the market is favouring the company....for now.

I am put off by the market as well but what do you do when your money is tied up? sell at a loss or hold on through the rough times and wait for the recovery (bagholder tactic Smile?
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Re: Sino Forest Corporation (TRE.T)

Post  Max on Tue Jun 07, 2011 12:03 am

Just a side note. The TSX index is at about 13,300 right now. 52 week High is around 14,500. 52 week Low is about 11,000. Pretty much right in the middle. Sure, there is a long way to fall, if you look back to 2009 when it hit somewhere around 8,000, but it did not stay that low for long.

I think as far as the overall market goes, you are wise to stay cautious considering the ongoing credit crisis (not over yet by a long shot), and world economic slowdown, but in the grand scheme of things, it is likely that the market will be back to 14,000 within a few years, and on average whatever you buy will be up 5-6% from where it is now.

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