Glen Doth Know

Tommy,

Glad someone looks through my notes. I just added this to my to-do list --- which is currently 7 companies long.

My dad ran a business called ARM Computing for 15 years. I am just carrying on the legacy.

A couple things:

1. Your notes reflect that you dig deep enough and that you have a sense of what you are looking for. That's a plus.
2. If I had any advice, or a cautionary statement --- make sure you never get caught up in 1 company and try to continue to prove that it is a good value. Always be nimble and always be comparing that which you are invested in to that which you could be invested in. If you like another opportunity better. Switch.

A couple similar companies off the top of my head that you might be interested in/familiar with

oil
Cneh, lpih, I think snen too. (snen is not a buy for me, but it's interesting)

Coal:

Sclx, chgy, pudc

Anyway, I'm sure there are more. The bottom line: Find the best way to allocate your money so that you are the most confident that you will not lose. I can't emphasize that enough. By doing that, with that mindset, you should do fine. The trick is figuring out what not to own instead of wasting lots of time evaluating 1 single potential opportunity. I call this relative valuation.

Maybe I have no idea what I'm talking about, but empirical evidence suggests otherwise,

Glen

-----Original Message-----
From: Tommy Gallagher [mailto:thomasmgal
Sent: Monday, June 01, 2009 9:51 PM
To: Bradford, Glen Richard
Subject: Re: CCGY

Hey Glen - congrats on getting the hedge fund started up. I wish you
luck. Does the ARM name have any significance? How'd you come up with
it?

A stock I came across tonight is CCGY - China Clean energy. Looks
like it may have bottomed in early March at .10 cents. With the
increase in diesel margins today of 8% and their new facility coming
online in September - this may be decent bargain. Their earnings
weren't impressive for last year or the first quarter. I didn't see
this in any of your round robins and was wondering if you've looked
into this stock at all. At 20 cents its pretty inviting. they were
initially on the docket to present at the china rising conference, but
they didn't. I'm not sure why Glass half empty - i should stay away,
there is a bad reason why they didn't present, couldnt get their act
together, were disinvited etc...glass half full - too much going on
with the economy, not enough time, another, some other benign reason
and now not everybody knows about this stock yet since it didn't
present and its an opportunity.

looks like it is getting some notice with 175k volume today.

Below is the link to the china conference website showing they were
originally scheduled to present and a piece of their quarter
filing...let me know what you think.

Thanks,

Tommy


http://www.chinarisingconference.com/news/news20090416.html

Labels: ccgy, CHGY, CNEH, lpih, PUDC, sclx

Anthracite Capital is Reinflating
By
Glen Bradford
Instead of talking about finance institutions that are being diluted like Citigroup (C) and financial institutions that are so hot they’re already above their November lows like Wells Fargo (WFC) and Goldman Sachs (GS), I’m going to introduce you to a better place where it’s bottoms up from here.
After getting the wind knocked out of it, Anthracite Capital shows signs of life. Granted that the price has probably exploded higher from $0.74 by the time this article gets published, let us use it at a baseline. What do we know about Anthracite at $0.74?
1. Anthracite is trading at a P/E of 0.487 if you knock out the Q4 2008 earnings nightmare and look back 1 year from Q3. The reason I took out Q4 is because the loss claimed appears to be a one-time huge write off, followed by positive earnings the next quarter.
2. Anthracite Capital is trading at a book value of 0.1.
3. Anthracite Capital is traded on the New York Stock Exchange. Let me repeat. This is a company cheaper than the listing requirements on the New York Stock Exchange. It either increases in price or eventually gets delisted.
All of these figures indicate that Anthracite is priced for bankruptcy. Where’s the good news?
1. They have pushed back the disaster twice already and have been in talks to resolve the issue. If I know anything about creditors, the last thing they want to do is run their debtors into the ground.
2. Anthracite was profitable in Q1 2009, just not as profitable as it used to be. If you optimistically flat line the profit figures from Q1 2009 into the future, your P/E is still 0.685. Note that Q1 of 2008’s Net Income Applicable to Common Shareholders is twice as large of that of any quarter as far back as I can see. So, comparing Q1 2009 to Q1 2008 isn’t fair to begin with. The bottom line here is that comparing the income of Q1 2009 to Anthracite’s history --- things match up but the revenues are weaker.
So, what am I doing about it? I’m buying. I probably already have a sizeable position. I’d say you could add this to my suggestions for 100% in 1 month, but that would be an understatement. I’d be surprised if AHR didn’t see $2 by June 18th.
Disclosure: Glen and his investors own AHR.


Title ideas: China: Harder, Better, Faster, Smaller
China: Go Small Or Go Home
By
Glen Bradford
Cramer’s a buyer of Bucyrus. I’ve been a fan of Bucyrus since I came across it in late August 2008. Back then, I grabbed the coattails of the top of the roller coaster and rode it down from $67 to $62. If I liked it then, imagine how much I like it now at $23, on its way back up. Up over 100% from its low, why is this growing company trading so cheaply with a P/E of 6.86? I’ve got one idea. Opportunity cost. If you want to play china the right way right now, you have to start small and work your way up to see the big picture.
Bucyrus makes the mining equipment. Let’s take a look at some folks that may use this kind of equipment and are trading at a discount to Bucyrus. To set the stage, Bucyrus has a P/E of 6.8 and is selling at 1.7x Book Value. Let’s look at some undervalued Oil and Coal ideas that are all less than half as expensive as Bucyrus with respect to both metrics.
1. Puda Coal (PUDC) is being featured at the China Rising Investment Conference today and is set to run from 10:00-10:30am. Puda Coal is a supplier of metallurgical coking coal to the industrial sector in the PRC. They are currently in the process of vertically integrating their supply chain. Goldman Sachs just upgraded the entire coal industry. The reason for upgrading the industry is mostly due to China. Looking at these numbers, I’m going to agree with Goldman.
2. Longwei Petroleum Investment Holdings (LPIH) is one of the leading diesel, gasoline, fuel oil and solvent oil distributors/wholesalers in Taiyuan City, Shanxi Province, P.R. China. Do note that they’re expansion is being financed through their working capital. Bank loans in China have been unbearably tough to get this last year --- so this is a strong point.
3. China North East Petroleum (CNEH) is engaged in the exploration and production of crude oil in Northern China. They just signed a contract to drill another 48 wells in the next 10 months, taking their total to 303 after the project is completed. Crunch the numbers and that’s 18% growth in production in 10 months.
4. Now, I would outline the advantages of China Energy (CHGY), but I did that 2 weeks ago. Instead I’ll give you a bonus pick that’s American. Crimson Exploration (CXPO) is even less than half of half as expensive by both metrics as Bucyrus. They are an independent natural gas and crude oil company engaged primarily in the United States, Gulf Coast and South Texas regions.
Now, I’m not telling you that you’re not likely to make a lot of money on Bucyrus right now. What I’m saying is that if you have two opportunities, and one of them is more likely to return more money than the other --- it would make sense to buy into the one with better returns, right? That said, Bucyrus in my opinion is definitely worth more in the long run. It’s trading less than its backlog and that’s pretty much sinful.
Disclaimer: Glen and his investors own LPIH, PUDC, CNEH, CHGY, CXPO.

Labels: ahr, C, CHGY, CNEH, cxpo, lpih, PUDC

Ahh the macro view.

I had an interesting conversation with a private equity analyst at Blackstone last month, his basic thesis was that commodity export dependent and goods export dependent economies are basically a form of leveraged economy and will run up the most during this recovery.

The US manufactures guns, no butter, and some MTV. No leverage.

They talk about the BRIC's, but it's really the IC's, Brazil and especially Russia are not in the same league as China and India, which have simply plowed through this recession without much of a whimper, and China's economy is much more commodity export and goods export dependent than India's, which seems to be service based.

One play I have now are 'triple happiness' stocks, e.g. PetroChina and China North East Petroleum, which have:

1) large reserve value increases due to dollar increase per bbl as the dollar devalues and demand picks up, reinflating per bbl oil prices

2) large cashflow increases due to dollar increase per bbl as the dollar devalues and demand picks up, reinflating per bbl oil prices

3) tremendous organic growth funded via assets which throw off gobs of cash

I sold off PTR and placed most of it into CNEH at the start of the month and it's produced a handsome return, but no sense looking a gift horse in the mouth, I need to diversify into some other China plays. Hence the screen.

-Gene


On Sat, May 9, 2009 at 5:00 PM, Bradford, Glen Richard wrote:
I agree.

Dumb money is what makes the stock market go so low and so high. We are on the upswing. Look to the VIX when the S&P is down, when both were down, I started loading up. The bottom was in.

I agree with all the money on the sidelines not sitting there much longer. Where is it going? USA Stocks or foreign stocks?

Last time I checked (like 4 months ago) the deals aren’t here. The money and exchange rates are looking good in eastern Europe and places where commodity exports are leading GDP drivers.

Only number crunch when you have to. If you want to know about dryshipping, just go visit a big boat yard and ask around if the jobs are good and see if ships are moving.

Glen

From: Eugene Franco [mailto:efranc]
Sent: Saturday, May 09, 2009 4:43 PM
To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

mutual fund follow on*
On Sat, May 9, 2009 at 4:42 PM, Eugene Franco wrote:
Since you like data crunching and your resume lists quite an array of programming and statistical knowledge, maybe you'd find this data fun to play with:

http://www.ici.org/stats/mf/index.html

The two most interesting pieces I've been looking at are the mutual fund money flows, and the money market assets.

One can see a clear flight to safety with MMA Gov't assets soaring 70% or $600 Billion from August 2008 to March 2009, massive dry powder.

The data indicates the dry powder is starting to be ignited, with $120B total drop in MMA assets of which $100B is MMA Gov't, but it would appear that ~80% of the dry powder is still remaining.

What's interesting is that most of this seems to be going directly into stocks, rather than heading into mutual funds, which have only seen $15B net inflows the past month.

So methinks this run up driven by hedge funds and retail traders that are pulling cash out of MMA, and that there will soon be a follow on as people reallocate their 401(k)'s back to stocks (dumb money).

Thoughts?

On Sat, May 9, 2009 at 3:51 PM, Eugene Franco wrote:
In HS to win stock competitions I just used two opposite high alpha portfolios.

Porfolio A has 10 highest alpha stocks.
Portfolio B is short 10 highest alpha stocks.

That was my temporary solution to the Kobayashi Maru, hahaha. Of course it doesn't work in real life, just silly high school stock competitions.

Eugene

On Sat, May 9, 2009 at 3:46 PM, Bradford, Glen Richard wrote:
Yeah,

Too bad they wouldn’t remove my first 2 weeks of trades. I was just putting stuff in and out to see how easy CAPS was to use.

Oh well,

Glen

From: Eugene Franco [mailto:efranc
Sent: Saturday, May 09, 2009 3:43 PM

To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

amen.

btw, nice caps rating!

Ahh.... overheating is an old friend..in high school I ran a P4 with a refrigeration unit (it sat under the desktop, I kid you not) so I could overclock it. In college my desktop used to crash from running backtesting on years worth of data, I would have to run the backtests at night when the dorm room was cooler and pray in my sleep that the test would run to completion.

I ended up upgrading to a dual core pc, my time was worth more than the $800 for a new desktop.

A touchscreen, sounds exciting, not sure I see the connection to operations research stock market software. What will the software do?

-Eugene
On Sat, May 9, 2009 at 2:24 PM, Bradford, Glen Richard wrote:
Gene,

Not a big deal. It’s not malware. It’s overheating. Plus, I use computers about 10x harder than your average user. Granted, I’m not doing autocad --- but I’m always downloading and analyzing large quantities of data.

Good news is I’m getting a touchscreen and I’ve wanted to write some operations research stock market software so that I can use that to its full capacity.

Glen.

From: Eugene Franco
Sent: Saturday, May 09, 2009 2:19 PM
To: Bradford, Glen Richard
Subject: Re: EMH and Chinese Small Caps

Oh no, I hope it isn't too serious of a crsh.

I had my computer taken over by malware in January, which is amusing considering I run 2 antivirus programs, and don't download garbage. The malware programmers are becoming better, they now block updates from anti-virus sites, block the anti-virus programs from running, lock the files to prevent them from being deleted, and prevent reboots into safemode.

After spending the weekend dealing with that I now have no fewer than 3 anti-malware guards and 2 anti-virus programs running, it's really getting outrageously ridiculous for windows xp.

Take care,
Gene
On Sat, May 9, 2009 at 1:53 PM, Bradford, Glen Richard wrote:
Eugene,
Glad you’re thinking. I agree with your X, Y, Z concept. My adjustment to it would be that that time Z would also include an environment that doesn’t change. Since the environment is constantly changing, the stock market is kind of a lagging indicator. There’s all sorts of inefficiencies.

Great! I love lists. My computer crashed www.glenbradford.com/blog I’ll let you know when I get things back up and running.

Glen

From: Eugene Franco
Sent: Friday, May 08, 2009 8:38 PM
To: gbradfo
Subject: EMH and Chinese Small Caps

Hey Glen,

Enjoyed your post on EMH on your blog and your articles on Seeking Alpha.

I had the EMH debate with a friend at Goldman Sachs FICC, the conclusion we came to is that for EMH to hold true one needs sufficient players X and freely available information for all parties Y, and these would eventually be reached given enough time Z.

I've been hand screening the universe of Chinese micro caps, and am curious what fields you use for your personal screen (i've weeded 700 down to ~30, but I am having trouble weeding the list down further). The screen results are attached. I'm currently long CNEH, but I'm looking to diversify my position with some investments in unrelated industries before I add leverage.

Take care,
Gene

Labels: CNEH, lpih

Tom,

Looking through HERO. CNEH in my opinion is just a better deal. No reason to screw around with HERO since it’s still losing money and it’s contracts are up in the air. I don’t think this rebound is going to send OIL above $60 in the short term (long term is another deal), not to mention July of 2008 and the surrounding 5 months caused a lot of people to start drilling their own oil. Supply is going to be huge. CNEH is intelligent, but I’m just not feeling HERO. Rule #1: Don’t lose money. I don’t want to take risks to make huge gains.

Not big on IO either. I think this one is a turn-around play and will probably turn back to huge profits in a year or two, but not a play right now. Their 2009 projections don’t look very pleasant. If they’re not optimistic, I’m not either. Oil can be bought cheaper at wall street than it costs to go find it and harvest it.

Glen



From: Tom Anthony [mail
Sent: Thursday, April 09, 2009 8:58 PM
To: Bradford, Glen Richard
Subject: Re: KHD

Thanks for the response, Glen. Yeah, ORS shot up and then fell pretty hard...glad to hear you got out when you did. I never made a position, I just never really felt confident with it.

Bought into CNEH the other day when it hit 1.35. Another one i've been watching is Hero - I know its not a China stock, so I'm not sure how interested you are - but its over 95% off of its 52 week high. Their earnings are at the end of the month. I bought into IO about a month ago and I'm thinking that Hero may have more upside potential, even though it looks like I may have missed its bottom... but I need to get a better understanding of them. I think IO is a pretty good investment with potential but maybe not as much as Hero. I dunno yet, but you may want to give it a looksee.

Anyways, like i said before, I enjoy reading your site... and I'm not ashamed at all of cherry picking CNO from you. hahaha.

Tom


On Wed, Apr 8, 2009 at 1:17 AM, Bradford, Glen Richard wrote:
Blog Wars Transcript:
Hey Glen - are you in this for the long haul or did you get out at the bounce yesterday?

Are you still bullish on ORS?

Thanks,
Tom A
5:20 PM

Glen Bradford said...
Tom,

I sold ORS at $1.04, something like 200% profit.

I am not a big fan of their A/R being something like 200 days of sales and increasing.

I'm hesitant until this thing gets cheaper or reports better A/R turnover. I'm familiar with the MCI swindles of the 1995 era. This could be similar. I have no idea; happy speculation.

Glen


From: Tom Anthony
Sent: Thursday, April 02, 2009 11:39 AM

To: Bradford, Glen Richard
Subject: Re: KHD

Haha. I don't think I can ever fault a guy for going out and having a few drinks...or more. I've been out of school for going on 4 years now - I definitely miss the random Tues/Wed nights out.

CNEH - their earnings report on Monday was pretty impressive. I really like oil and I have wanted to get exposure to oil in China.

They've been granted another year and half time to get listed on a major exchange. This may be a good time to pick them up before they list. They amended the terms in early March for listing.

In 04 when they changed to CNEH they had I think around 20 wells and planned to have 102 more wells completed in 4 years. From their recent earnings, it shows they have 219 operating wells - I would have to see that as a big positive.

I'm not sure of all the specifics with their PTR agreement, but for the first 10 years PTR gets 20% of their production and that jumps up to 40% in 2013. I'm not entirely sure how that will affect them in 5 years, but for the next five years its 20% of their production that PTR takes per their exclusive agreement and they have obviously been growing extremely well - 08 was a huge year for them.

They are not too far off their lows and their growth does seem pretty enticing. I haven't decided if I'm going to create a position at all - most of my money that I've planned to invest is already invested in the market and every month I try to add to it - I need to make sure this is a better play than something else. Let me know your thoughts.

Thanks - Tom



On Thu, Apr 2, 2009 at 10:25 AM, Bradford, Glen Richard > wrote:
Tom,

I’ve been looking into it. Looks like a cash / accounts receivable problem.

Same thing with ORS.

Take a peek at CNEH.

I will be digging deeper though. I went out last night instead of sorting through company information.

Glen

From: Tom Anthony
Sent: Wednesday, April 01, 2009 7:33 PM

To: Bradford, Glen Richard
Subject: Re: KHD

Hey Glen,

I read your article about CNO awhile back and just wanted to say thanks for bringing that opportunity to my attention.

I was wondering what your thoughts were on Asia Time Corp if you've looked at that stock at all. They had their IPO early 2008 which started out well for them but they are over 90% off their highs with a PE around .6. Obviously they don't have a lot of history though. Their last financials showed them with a good amount of cash on hand. I'm still waiting for earnings to come out. The same thing is going on with ORS - no earnings. I figured they would be out this week, but that hasn't happened yet. I know awhile back you were interested in ORS - are you still? Anyways, I enjoy reading your stuff - thanks.

Tom

I’m dumping XIN ASAP. I’m finding other opportunities that are significantly better. XIN is still a great company and will probably appreciate in price…

But, like most of my articles indicate: I will always drop a great deal if I find a better one. Right now, you can find growing companies with P/E < 2. That’s huge.

Just be glad you’re investing in china. It’s set to do significantly better than the US markets. The shanghai is already up about 27% so far this year, not to mention that it’s up more than that from its bottom.

I don’t plan on writing articles on the absolutely unbelievable deals I’m finding. I plan on putting them on my blog and trying to pick up a few more individual investors. When I feel that I’m personally invested enough, that’s when I’m going to take my ideas public again. I see no reason to tell other people about hidden gold when I am not set to profit from it.

Glen

From: Tom Anthony
Sent: Saturday, February 14, 2009 3:26 PM
To: Bradford, Glen Richard
Subject: Re: KHD

Thanks for getting back to me, Glen - I do appreciate it. My one concern with KHD was their ability to grow, but throw in the China stimulus and their cash on hand and I thought it deserved more research.

I've read through your blog and completely agree on XIN, I picked up some shares back when it was below 2 bucks. I don't know much about GHII, but will definitely do some more digging on it.

Thanks again, Glen

Tom
On Fri, Feb 13, 2009 at 8:39 PM, Bradford, Glen Richard Tom,

I was looking through their investor presentation. It looks like it may be cheap for a reason. The industry appears to be cyclical.

I think that there is probably more downside. That's my best guess. I would rather bet on companies that are going to grow in these hard times and are equally cheap.

Glen



From: Tom Anthony
Sent: Friday, February 13, 2009 10:58 AM
To: gbra
Subject: KHD

Hey Glen - I came across your blog the other night as I was researching AOB when I saw it at under 4.80. You seem pretty bullish on most things China and I'd like to get your opinion on KHD. It seems like every other value / bargain screen pops this one out. I'm trying to come out with a reason why this wouldn't be a good stock to get into, it seems that with its cash > market cap its a no brainer. What do you think?

Thanks,

Tom A.

------------------------------------------------------------------------

Tom,

I agree with your analysis on CPX. I’m leaving this one alone. I don’t see oil prices booming --- but CPX is likely to outperform the market --- just not enough for me to consider worth my time for this risk level.

COP --- not enough upside to be worth my time.

GCI --- probably going to $8, don’t see it going up past $20. The internet is awesome. I don’t invest in short term long term ideas. I need a long term idea.

HERO --- see above.


MGM --- sounds like a gamble. I’ll pass. I’m risk averse. We didn’t miss the boat. There is more upside, and then… there’s some downside… serious downside.

ZLC --- I prefer Blue Nile to Zales, but let’s take a peek. I think it’s cheap for a reason, or at least analysts do. I don’t want any diamonds. I don’t understand why people pay so much for them.

SKS --- I shop there but I don’t buy anything. I’m not a huge fan right now. There is upside though. Probably an easy double. I just don’t like playing games with companies in a rut.


From: tcors [mailt On Behalf Of Tom Corson-Knowles
Sent: Thursday, April 09, 2009 9:18 PM
To: Bradford, Glen Richard
Subject: Re: Real Stocks for Real Investors


Hey,

CPX looks decent. It has strong cash flow, strong balance sheet, and is earning about $150 M+, so it's effectively trading at 2-3x earnings. However, it's likely overcapacity in the industry will get worse if oil prices stay low. If oil prices boom, this stock will boom. If you were betting on oil prices rising, I am not sure if this stock would give you a better return as opposed to other options like COP.

I like Gannet. It is in the worst industry in the world in my opinion, but it is generating $1 b+ net income and trading for less than $900 M. It's current ratio is getting worse though and is coming close to 1:1. Long-term, this would be a bad investment because of the industry, but for 1-2 years or less, it could pay off well.

HERO is a lot like CPX, but they focus on offshore drilling. It's trading at ~ 1.6x earnings.

MGM is up a shitton. Looks like we missed that boat.

None of these companies really impressed me, but I will keep an eye on these 3, ZLC, and SKS.

Tom C.

----------------------------------------------------------------------------

thanks, alot of folks love the quote, we sell alot of high end knives to our military.
Last month we sold a big order to Homeland Security!

I went ahead about bought some CAEI today, glad I got in at $1

paul

People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf. Orwell

http://www.tdeknives.com/



-----Original Message-----
From: Bradford, Gle Ri
Sent: Thursday, March 26, 2009 05:24 PM
To: paul
Subject: RE: Nine Top China Plays
Paul,

You’re email didn’t pass my Junk e-mail filter. I found it anyway.

I’ll see what I can do. I run a bulletin board on ORS.

I invite you to check it out.

http://investorshub.advfn.com/boards/board.aspx?board_id=8745

I’ll be looking more at this since you pointed it out. Just curious, but do you usually get responses when you link to a knife website in your email? Haha, I can see that some people might be threatened. Good stuff.

I’m pretty good at getting responses. Shoot me your contacts that you’ve emailed and I send them looking like a student, people love students. People are afraid of knives.

Glen

From: paul
Sent: Wednesday, March 25, 2009 10:52 PM
To: gbrad
Subject: Nine Top China Plays

Hello there Mr. Bradford


I really enjoyed your read on the China picks. I have been accumulating many, many thousands of shares of ORS and I do believe it has a ton of potienal. I am considering buying several thousand more this week before the possible April 1, end of year release.
The BIG item holding down ORS is their Accounts Receivables. If they get them back in line, the stock will explode. I wanted to ask if you have found any info that suggests they have.
I have scanned all over the Internet and they will not answer emails so I was looking for any clue before I sink more money in. Just thought it would not hurt to ask another informed investor. Thanks for your time and keep up the good work.

paul

http://www.tdeknives.com/

---------------------------------------------------------------------------------

Hello Glen,

I've been following your blog and investing the remainder of my ancient investments (ever hear of CMGI?) from 2000 -2001, where, I must say, I lost just about every penny I ever made betting on the dotcom boom. Since last October, when I discovered your site, I've taken my remaining 1000 bucks and now have doubled it investing in your stock recommendations. That would have been nice with the original 40K, but I'll take what I can get.

Kindest regards,

David Wagner

D.A.Wagner Productions LLC

Labels: CNEH, GCI, HERO, IO, MGM, SKS, ZLC