This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China Stocks: Price vs. Fundamentals

The company received notification that they were in conflict with China SFDA advertising rules and the stock took a hit. Despite fully resolving the issue and quickly communicating the resolution to the market, the stock took a quick hit. Then the news of the SEC investigation of Goldman Sachs (GS) hit the market and BSPM took another hit, then there was Greece and the Euro then there was the 1,000 point drop in the Dow. And so on.

BSPM now trades right around $4 again, despite giving full year guidance of $18-20 million in net income. This is a stock that has already uplisted to the Nasdaq and yet still trades at five times guided earnings due to an overall negative market. Without a big upward push in the market, the catalyst needed to make this stock move may well just be next quarter's earnings which should prove the company is on track to meeting full year guidance. So it may take some time. I also think that since BSPM is now Nasdaq traded it will be easier to attract institutional research coverage. However when or if that happens is not predictable, so I am not looking for any immediate gratification on BSPM but rather think it is has strong potential over the coming months.

With both NEWN and DYP, a key contributor to their recent low prices has been the fact that both trade with unusually wide bid ask spreads. This means that when just a few investors panic and decide to sell out in a tough market the bid price drops quickly. As a result the selling investors panic even more and drop the share price further. In general I try to avoid putting myself in that situation. I only own stocks that I like based on fundamentals. When it comes time to sell I try to do so when the market is having a strong day rather than selling into a weak market and pushing the bid price down.

When the stock is down, I don't worry about my portfolio's value for the day because I am fully comfortable with the longer term prospects.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BSPM $1.13 -0.88%
ONP $1.58 0.00%
AAPL $129.62 -2.20%
FB $79.34 -1.50%
GOOG $532.32 -1.44%

Markets

DOW 18,041.54 -190.48 -1.04%
S&P 500 2,104.20 -21.86 -1.03%
NASDAQ 5,032.7510 -56.6110 -1.11%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs