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Gold/Mining/Energy : Noble China (NMO) on TSE. Chinese Brewery Stock
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To: Lee Matheson who wrote (197)10/6/1999 8:42:00 AM
From: Mario Gallant  Read Replies (1) of 248
 
I think your right Lee, let's hope we will see some positive news soon. Things have a habit of taking a lot longer then predicted for this company. One would think that Mr. Pennal would refrain from using statements such as ( before the end of next quarter or within a few months etc ) how many times did we see months turn into years with this company. Having said that I still hold because I think the shares are still grossly undervalued.

I think the share buyback is going well. Yes it's helping to support the share price and at this rate they will buy about 10 % of outstanding shares for only 3 million dollars. I think we will see the company continue this strategy into future years and eventually this will have a real effect on earnings per share reported. At this rate this company will only spend about 60 % of last years profits to cancell 10 % of the shares outstanding.

If we do the math I think you will agree that in a few short years the company could only have about 5 or 6 million shares outstanding and without any profits from the other breweries could easily make $ 1.00 per share in earnings. Will the shares still trade for $3.30 when they make $1.00+ profits per share? I think not. Lets not forget that the company had 18 million dollars in cash at the end of last year. They could make an offer to repurchase almost 5 million shares today at 4.00 and would only be left with 5 million shares outstanding with 5 million + in profits a year.

Regards,

Mario.
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