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Strategies & Market Trends : Value Investing

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From: MCsweet	6/13/2013 4:41:53 PM
	Read Replies (3) of 78704

AERL/AERLR another speculative Chinese situation Low PE Macau gambling stock. They are doing a rights offering to pay off related-party debt (requirement before thet list in Hong Kong). The listing in Hong Kong will be achieved by transferring stock from the US (not issuing new stock), so it should create a good amount of buying pressure here. Rights allow you to buy stock for 3.00, so rights at 0.7 are currently undervalued versus stock at 3.77. I think this is a buy if it trades weak after the rights offering (or if you can buy rights cheaply). Cheap stock + rights offering and Hong Kong catalyst = interesting speculative play, but the usual due diligence caveats apply particularly regarding Chinese stocks and gambling stocks (too iffy areas). MC Review of previous Chinese speculative situations XIN, CCM have worked out well PWRD, GAME are working out, although I was early and should have kept bigger position longer. CNET has not worked out yet. I was too early, and they had disappointing earning guidance. Should have waited until more tangible progress on buyback, which I hope we will see soon.

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