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By Pehon | July 15, 2007
We have seen the greatest fall in Sino-Env’s stock price since its IPO. According to the board, it was an error trade that caused the single largest drop, trading at $2.4 on the 5th.
If what they said about the “error trade” was true, we are probably looking at a technical weakness, that once investors come to their senses, we might just see the stock price return to above its previous high.
But what are the signs telling us?
I remember a few weeks back, me and JL did raise a red flag about the possible “head and shoulders” formation. If what has been happening is anything to go by, the formation of the “head and shoulders” pattern has possibly come true.
However, we have also just learnt that the CEO of Sino-Env has made an Open Market Purchase on the 13-07-07. This leap of faith can tell us several things.
There is no reason for a company CEO to spend $5 million dollars on his company if there was really something fundamentally wrong with the company. What the CEO has done is to show long term value investors that the company’s fundamental is sound, and the recent drop presented a good chance to accumulate on weakness.
But for more skeptical investors, maybe you’ll like to wait for Sino-Env’s next financial report on the 14th August 2007, before plotting your next move.
July 16th, 2007 at 10:47 pm
Aiyo PeHon, I dont have this counter but have been watching since you started writing about it. Heart pain for you to see your margin wack down even after lifting of trading halt today.
Know you have a stop loss system you wrote about some time back. Hope you have a profit protection system as well. Regards
July 17th, 2007 at 8:23 am
Sino Environment’s CFO explained that
a. the company’s recent weak share price
performance could be attributable to its
upcoming flattish 1H2007 performance, and
dismissed rumours such as flooding at its plants,
insider selling and sacking of its CEO;
b. this in turn reflects the lack of new production
capacity in 1H2007;
c. however, this issue is expected to be resolved
by Aug ’07 as the company will be relocating to
a larger facility in Fujian province which will more
than double its VOC capacity from 3/month to
7/month;
d. the strong demand reflects China’s need to
urgently reduce their air pollution problems
(sulphur dioxide and toulene) ahead of the 2008
Beijing Olympics;
e. due to the new production capacity for VOC
that is coming on stream in 2H2007 as well as
new contributions from waste-water and dustelimination
sector, management expects a very
strong 2H2007 performance;
f. the company is currently in talks with 4-5 power
plant operators for potential desulphurisation
projects.
July 17th, 2007 at 8:18 pm
Thank you dion. Yes, i’ve recieved and read that mail, but just 1 thing.
where did you get this? did you deduce this?
“a. the company’s recent weak share price
performance could be attributable to its
upcoming flattish 1H2007 performance, and
dismissed rumours such as flooding at its plants,
insider selling and sacking of its CEO;”