InvestorsHub Logo
Boards
News
Market Data
Markets
Discover
Discover
Subscribe Login/Register
S&P 500
5,099.96
(
1.02%
)
US TECH 100
17,236.80
(
1.52%
)
Dow Jones
38,239.66
(
0.40%
)
Brent Oil
88.16
(
0.01%
)
Bitcoin
63,896.05
(
-0.91%
)
Post# of 585
Next 10
Reply Private New
Public Reply Private Reply New Post
Keep Last Read
Keep Next 10 Report Keyboard Shortcuts
Next 10 Prev Next

stanu78

Send PM Follow Ignore
Followers 23
Posts 2590
Boards Moderated 0
Alias Born 02/03/2005

stanu78

Re: None

Wednesday, 01/10/2007 10:52:14 AM

Wednesday, January 10, 2007 10:52:14 AM

Post# of 585
My pick is ETLT. Their numbers speak for itself.

Eternal Technologies (ETLT.OB)

Company Website : http://www.eternaltechs.com
Market Cap : $23M-$24M
Share price : $0.57-.$0.60 (recent price)
Diluted outstanding : about 40M shares
Preferred outstanding: 0
Cash + ST investment : $40M ($1 per share) (mostly restricted cash)
LT Debt : $0
Earning : $4M+ (and has been profitable for several years)
Retained earnings : $35M
Sales : $23M
PE : 6
Book value : $53M ($1.3 per-share)
Tangible book value : $47M
P/tangible book : < 1

ETLT is based in China. I would call them a conglomerate business (diversified business). They deal mostly agriculture industry (except the breast cancer first screening/detection business i.e. E-Sea) and looking to enter some other industry (such as microdisplay business). Their agriculture business area also diversified ranging from meat and embryo business, to mango planting and turtle breeding project (the latest on is a very new venture owning 22% of a turtle breeding project). The embryo and meat business is slowing down therefore (which is not the sole cause) they are looking for other new businesses to invest (as they want to grow plus they have ample cash to use).

I was tempted to pick AOB, NMKT or CXTI instead of ETLT but in the end I'll stick with what seems grossly undervalued. ETLT stocks has been low (low valuation) for a long time even the comapy performance has been great ($4M+ earning per year while building more cash balance) and there is no guarantee (nor that I am confident) that it will be any different in 2007

ETLT valuation is so low that people think it is a fraud. I heard many people said that ETLT is cheaper or better buy at $1 or $2, which doesn't seem to make sense to me (I ask them and they explain that by that price there will be more info/confident with the company)
The other scenario is maybe it is indeed a fraud (as some investors told me that some of ETLT key management used to be with CHCL), therefore the stock is always what it is (super low valuation). and what funny is, even those who believe ETLT is a fraud thinks it will touch $2 before eventually go to $0 (and some did buy though believing it's a fraud). Weird isn't it..

Some other concern that many investors had:
The nice cash position is restricted cash (can only be used in PRC) since they get favorable tax treatment (no income tax for their agricuture business for many years to come). This restricted status has been questioned by many investors, as to, "does the cash really exist if they can't be used outside China?" and the question whether the cash can be used to buy back shares or pay dividend (basically returning the cash to the owner/shareholder) was never answered clearly.

I'm giving ETLT management the benefit of the doubt that this time around they will do the right thing and will eventually bring value to the Shareholder.

Stan
PS: This is not a recommendation for an investment. Investment in ETLT is risky and you can lose all your investment. As a disclosure, I'm holding about 120K shares of ETLT in my microcap portfolio at average cost of .49 per share, so if ETLT goes under, I will lose some money too.
Public Reply Private Reply New Post
Keep Last Read
Keep Last Read Next 10 Report Keyboard Shortcuts
Next 10 Prev Next

Join the InvestorsHub Community

Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.

Sign Up