Selling July 7.5 Puts on CBEH
Posted: 25 May 2010 11:23 AM   [ Ignore ]  
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May 25, 2010 – Selling July 7.5 puts on China Integrated, at $0.50. The company recently guided for FY10 revenues at $387 million and net income at $49.5 million. If the stock moves below $7.50 and we get put the stock, we own it at $7 (exercise price less the premium received to sell put). At $7, our entrance point is at a $299.6 million market cap, or .77x this year’s guided revenue and just over 6x this year’s guided earnings.

The company has a diversified fuels (petrol and biodiesel) business in a growth market – China, with expanding distribution. A $7 entrance point, in our opinion offers little downside risk if we are put the stock. If the stock maintains above $7.50 between now and the July expiration date, we pocket the premium on the put.

Important Disclosure:

This information is intended to assist investors.  The information does not constitute investment advice or an offer to invest or to provide management services and is subject to correction, completion and amendment without notice.  Any such offer, if made, will only be made by means of a confidential prospectus or offering memorandum or management agreement.  It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future results or expectations.  As with all investments, there are associated risks and you could lose money investing.  Prior to making any investment, a prospective investor should consult with its own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of that investment

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