本文发表在 rolia.net 枫下论坛The stock has been trading down on heavy volume in last two weeks, but it is not a bad sign. If you noted the stock was only down 3% to 4% given such a high trading volume in a single day, I took it to mean buyers are still alive. After sellers were cleaned up, I expect to see the stock rebound very soon.
On the fundamental side, it is still very strong. MGO is a Chinese potash fertilizer play. I think the stock has been largely underfollowed by the market -it didn't seem to benefit from the algriculture boom at all. The stock price is almost flat from a year ago, while stocks in the same sector like POT and MOS more than tripled. I think the market will soon catch on this to give MGO a reasonable valuation it deserves.
The business has been doing very well. In 2007, revenue grew by 74%, and net income by 30%. The gross margin had greatly improved in Q1 after the high input cost caused some concern in the last quarter of 2007, showing the company's ability to maintain profitability in a difficult envrionment. All factories are currently running at full production, but capacity will even double by the end of 2009.
Export is not a concern at all. Export is not contributing any revenue at this stage; though, the company is testing water in overseas markets.
The CFO recently resigned for personal reasons. It's not a good news for the stock, but shouldn't be a big concern. I think the business is well managed.
The stock is cheap now. It is trading at 15 times 2008 forecast earnings, with PEG ratio less than 1. At the current price, I would add to my position of MGO.更多精彩文章及讨论，请光临枫下论坛 rolia.net
On the fundamental side, it is still very strong. MGO is a Chinese potash fertilizer play. I think the stock has been largely underfollowed by the market -it didn't seem to benefit from the algriculture boom at all. The stock price is almost flat from a year ago, while stocks in the same sector like POT and MOS more than tripled. I think the market will soon catch on this to give MGO a reasonable valuation it deserves.
The business has been doing very well. In 2007, revenue grew by 74%, and net income by 30%. The gross margin had greatly improved in Q1 after the high input cost caused some concern in the last quarter of 2007, showing the company's ability to maintain profitability in a difficult envrionment. All factories are currently running at full production, but capacity will even double by the end of 2009.
Export is not a concern at all. Export is not contributing any revenue at this stage; though, the company is testing water in overseas markets.
The CFO recently resigned for personal reasons. It's not a good news for the stock, but shouldn't be a big concern. I think the business is well managed.
The stock is cheap now. It is trading at 15 times 2008 forecast earnings, with PEG ratio less than 1. At the current price, I would add to my position of MGO.更多精彩文章及讨论，请光临枫下论坛 rolia.net