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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (41907)4/13/2011 12:16:11 AM
From: Jurgis Bekepuris  Read Replies (1) of 78742
 
I tried to figure out why CHL was so "cheap" compared to CHU. And here's the scoop: CHU is plowing a lot of cash into their 3G network expansion. And they got WCDMA network vs. CHL's TS-CDMA, which is the Chinese standard. WCDMA is considered better, so investors are betting that CHU will win a lot of market share at CHLs cost. Furthermore, CHU has iPhone:

marketwatch.com

I wonder if the CHU-positive-CHL-negative sentiment is overblown or if it's totally correct.

-----------------------------

I recently read about Piotroski score and calculated it for CHL. Not very interesting IMHO, but here it is:

1. Net Income. Score 1 if last year net income is positive. 1
2. Operating Cash Flow. Score 1 if last year cash flow is positive. 1
3. Return On Assets. Score 1 if last year ROA exceeds prior-year ROA. 0
4. Quality of Earnings. Score 1 if last year operating cash flow exceeds net income. 1
5. Long-Term Debt vs. Assets: Is Debt decreasing? Score 1 if the ratio of long-term debt to assets is down from the year-ago value. 1
6. Current Ratio. Score 1 if CR has increased from the prior year. 0
7. Shares Outstanding. Score 1 if the number of shares outstanding is no greater than the year-ago figure. 1
8. Gross Margin. Score 1 if full-year GM exceeds the prior-year GM. 0
9. Asset Turnover. Score 1 if the percentage increase in sales exceeds the percentage increase in total assets. 1

Total: 6 / 9
Not bad, not ideal.
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