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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (38650)	7/30/2010 8:54:46 PM
From: gcrispin	Read Replies (1) \| Respond to of 78735

A couple of points: Actually my 2.2 basis takes into account the 1:4 reverse split. My original shares were purchased in the .40-.50 range. One of the reasons I halved my position was because it getting to be a significant part of my portfolio. "The question with all these capital raises is if they can outrun the effects of dilution." So far they have. My view is that the dilution, hasn't hurt the earnings to date. There have been a number of roll-ups in the last two or three years. Slide 10 in the presentation posted points out that they can purchase "non-operating production assets" because they have a bromine production license. The following quote is from the 10-K: Each of the asset acquisitions described above was not in operation when the Company acquired the asset. The owners of each of the assets did not hold the proper license for the exploration and production of bromine, and production at each of the assets acquired had been previously halted by the government. With respect to the Factory No. 2, the assets had not been operational for nine months; with respect to Factory No. 3, the assets had not been operational for eleven months; with respect to Factory No. 4 and 5 , the assets had not been operational for fifteen months; with respect to Factory No. 6, the assets had not been operational for eighteen months; and with respect to Factory No. 7, the assets had not been operational for twelve months; and with respect to Factory No. 8, the assets had not been operational for thirteen months Certainly this isn't organic growth, but there is a "value-added" boost to purchasing non-operational assets and bringing them into operation with their license. "I would prefer to see some organic growth as well with their existing assets." Furthermore, there is organic growth in the chemical division of their company. Slide GFRE 11 indicates that chemicals is becoming an increasing share of their total revenues as they climb higher on the value-chain. Slide 15 shows that they are increasing their lines of production in the chemical division. Of particular note is the fourth line of production for wastewater treatment chemicals. Below is the PR when they announced the line in January. faqs.org If the numbers in the PR pan out--and the revenue numbers from this line could be significant-- there will be plenty of organic growth in the chemical division.

To: Spekulatius who wrote (38650)	7/31/2010 9:42:11 AM
From: Madharry	Read Replies (1) \| Respond to of 78735

GFRE I dont understand your quibbling over organic growth. It seems to me that they will easily get to $1.50 earnings with what they have,and they operate as an oligarchy at worst. In addition they have the potential for added value growth in the chemical and pharmeceutical units. So to me on a worst case basis you are looking at less than 6x earnings and I see the risks as fraud of some kind, and the chinese pulls their license to do business. I believe a stock like this could easily sell for 15 times earnings as I belive that company can increase its per share earnings for the next decade. After all the company's product is used in clothing, Oil and gas drillling, water purification, and pharmaceuticals. I expect all of those areas will grow over time.