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Strategies & Market Trends : Fundamental Value Investing

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To: bruwin who wrote (789)1/11/2009 12:33:09 AM
From: Spekulatius  Read Replies (1) of 4719
 
re AOB. Why in the hell does a small pharma company like AOB need to run a convention center? This makes no sense. if they have too much money on their balance sheet that they don't need for their business they should give it back to shareholders. After all they own the company. A deal like this is very bothersome because it seem to indicate that management does not care about shareholders and do not play a straight game.

This is very common with Chinese companies. They book a lot of profits and have lot of cash on their balance sheet but don't pay dividends. None of the money goes back to shareholders ever it seems. They are just along for the ride. That's why they trade a large discount to intrinsic value.
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