Long-Term Cash Flow Measure Says US Stocks are Overvalued

Stock prices have been risky when they have grown faster than corporate cash flow (1998-2000, 2007, 2017) and attractive when cash flow has risen faster than stock prices (1994-1997, 2001-2006, 2009-2014). Short-term stock prices trends are largely driven by investor sentiment, but long-term prices correlate with corporate cash flow retained to grow the value of … Continue reading Long-Term Cash Flow Measure Says US Stocks are Overvalued

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Colony Northstar May Have Been Pushed Lower By Selling From ex-Northstar Executives

Colony Northstar shares have fallen sharply in recent weeks (-18% YTD).  I believe the selling pressure comes from ex-Northstar executives.  The existing share buyback plan was largely completed by November and had little remaining capacity to take advantage of the falling price. In conjunction with the merger Northstar executives negotiated the following equity grants to … Continue reading Colony Northstar May Have Been Pushed Lower By Selling From ex-Northstar Executives

China Bears Now Critically Endangered

China is huge opaque and complex.  While the economic potential of 1.3 billion hard working consumers has always been evident, investors have usually been skeptical about the country's financial markets.  Few were willing or able to challenge the prevailing wisdom that a crash was right around the corner. Pessimism provided a convenient rationalization for ignorance, … Continue reading China Bears Now Critically Endangered

December 2017 NBS Price Data in Leading Chinese Cities With Home Price Restrictions

China’s National Bureau of Statistics (NBS) released its monthly report on home sale prices (LINK).  The segregation of “15 First-tier Cities and Hot Second-tier Cities” in the NBS report implies that they will be the primary focus of government policy: Intense market restrictions kept prices flat in 2017: NBS data show that rapid price increases are … Continue reading December 2017 NBS Price Data in Leading Chinese Cities With Home Price Restrictions

Sohu Valuation enhanced by successful Sogou IPO and potential Changyou privatization

Successful IPO of the Sogou search business clarifies the $1.5Bn value of Sohu's retained 33% stake ($39/share of SOHU) Possible privatization of the Changyou gaming business would deliver $1.4Bn of net cash before tax ($35/share of SOHU) at the unfair preliminary offer price or $1.8-3.2Bn ($45-$82/Share of SOHU) at fair value Sohu has minimal debt, … Continue reading Sohu Valuation enhanced by successful Sogou IPO and potential Changyou privatization

Changyou’s Buyout Price Should be Raised to at least $53

2/1/18 Update: Liquid Assets (cash+investments+loan) at 12/31/17 were $1127mm or $21.06/ADS.   Chairman Charles Zhang offered to acquire all outstanding shares of Changyou at a price of $42.10/ADS The offered price is significantly below the average valuations of competing companies (27.7 P/E for US/HK listed and 36.9 P/E for China listed) The offered price does not … Continue reading Changyou’s Buyout Price Should be Raised to at least $53

Xinyuan 4Q17 Contract Sales Estimate from CRIC

China Real Estate Information Corporation (CRIC – a subsidiary of E-House) released estimated 2017 sales data for the country’s top 200 property developers (LINK).  Xinyuan China is shown at #78 with estimated sales of 23.3Bn RMB year-to-date, which means 7.51Bn RMB for 4Q. CRIC does not have access to any official company records and compiles … Continue reading Xinyuan 4Q17 Contract Sales Estimate from CRIC

November NBS Price Data in Leading Chinese Cities With Home Price Restrictions

China’s National Bureau of Statistics (NBS) released its monthly report on home sale prices (LINK).  The segregation of “15 First-tier Cities and Hot Second-tier Cities” in the NBS report implies that they will be the primary focus of government policy: Intense market restrictions have kept prices flat in 2017 and the 12 month price change has … Continue reading November NBS Price Data in Leading Chinese Cities With Home Price Restrictions

Insider Buying at Selected Chinese Property Developers

Most real estate developers in China have reported strong contract sales in 2017 and enjoyed significant share price appreciation.  It is somewhat surprising to see that insiders have recently been adding to their holdings. Recap of share valuation and returns: In several cases (CIFI, SCE, and Yuzhou) it appears that purchases were intended to signal … Continue reading Insider Buying at Selected Chinese Property Developers

K Wah International: A Premier Value Compounder At a Bargain Price

This Hong Kong & China real estate company generated a return for shareholders (NAV appreciation + dividends) of 845% from 12/31/03 to 6/30/17, an annual IRR of 18% Shares trade at a 58% discount to book value and the fair value of the company's assets is higher than book The company's real estate sales earn … Continue reading K Wah International: A Premier Value Compounder At a Bargain Price