Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Bosco & Crossy's stock picks,talk area -- Ignore unavailable to you. Want to Upgrade?

To: Ed Ajootian who wrote (34763)	10/18/2009 6:24:37 PM
From: Crossy	Read Replies (3) \| Respond to of 37387

Ed, well, I don'T dispute their growth potential, however they are just a single player in the PRC market, and their own 10K mentions Alfa-Laval as the biggest player in China. For the PHE industry, 30% annual growth rate with a 50% gross margin imho doesn'T justify a PSR of 6 or beyond for its players. While blended growth rate might be somewhat higher, maybe 45-50%, it'S still pretty expensive. If you are willing to pay up here it'S fine with me. I am not. To me this is China craze gone rampant. I'm a value player - not intending to become a bagholder. To find such situations at PSR around 1 is what I consider prudent - not jumping on top of an already much touted stock idea If you want a backgrounder on the Price/Sales ratio (or its more complete sibling - EV/R) I'd suggest to look at the writings of Ken Fisher - it'S all there. It'S pretty obvious that PSR (or EV/R) needs to be applied across ONE industry and not between industries as this ratio is depending on the value chain and margin potential. It'S true, higher growth situations can command a higher EV/R ratio but 6 is a value I gladly pass on... You won't believe it but this is my "first test" (besides indebtedness) for manufacturing firms. Resource and extraction plays are indeed different. But I don't get into the top EV/R (PSR) ratio players within an industry as a matter of principle. Ultimately all these firms have to JUSTIFY their valuations. rgrds CROSSY BTW: just found another US based heat exchanger play on the NYSE, ticker is SPW. I'd rather watch ALFA.ST, LXU, MOD, AAON, SPW for a good entry point. Thermo-solaire applications will be a frugal way to conserve energy - unlike the photovoltaic mania. And it will extend to all the world, not just China

To: Ed Ajootian who wrote (34763)	12/10/2010 3:52:49 PM
From: Crossy	Read Replies (2) \| Respond to of 37387

re: HEAT - Smartheat Inc (Nasdaq: HEAT $5.60 +9%) Ed, revisiting your Smartheat play, I think that NOW the time is ripe for a safe, low-cost entry into this high-growth niche. I never disputed the credentials of the company but at EV/R in excess of 5 earlier this year I had my reservations regarding the valuation metrics. Right now, at an EV/R of around 1.5, it'S an entirely different matter. This PRC related play is now even cheaper than WFI.TO (Waterfurnace), one of the market leaders in geothermal heat pumps and advanced HVAC solutions in North America. with valuation risk removed, imho the time appears right for smartheat Inc. (Nasdaq: HEAT) at this point ! The stock has been gathering momentum recently for a nice year-end rally. rgrds CROSSY