Investor Sentiment a Real Damper on Things
Monday, March 10th, 2008
By Mitchell Clark, B.Comm. for Profit Confidential
If you had millions of dollars in the bank and you had the inclination to be a stock market investor, you might just be happy about the current state of things.
Investor sentiment is so bad right now that even the most exciting, fastest-growing China stocks are having a difficult time generating any investor enthusiasm.
A perfect example of this is a company called E-House (China) Holdings Limited (NYSE/EJ), which listed on the NYSE last summer.
E-House Holdings is a major real estate services company in China that was founded in 2000. Right now, it’s China’s largest real estate agency and consulting services company. The company sells primary real estate agency services, secondary real estate brokerage services and real estate consulting and information services, and has received numerous awards including “China’s Best Company” from the National Association of Real Estate Brokerage and Appraisal Companies in 2006. E-House sells residential and commercial real estate properties in all major regions of that country.
This fast-growing company just reported its fourth quarter financial results — and they were impressive.
According to E-House Holdings, its revenues for the fourth quarter of 2007 grew 46% to more than fifty million dollars, up from revenues of thirty four and a half million dollars, generated in the comparable quarter. For all of 2007, the company’s revenues grew a whopping 116% to one hundred and twenty-one million dollars, up from fifty-six million in 2006.
Net income during the latest fourth quarter was a solid twenty-two and a half million dollars (approximately), representing an increase of 32% from seventeen million dollars. For the entire year, net income was close to forty-two million dollars, representing a substantial increase of 130% over net income of just over eighteen million dollars generated in 2006. By any measure, this is very serious profitability from a fast-growing business.
E-House expects that its first quarter 2008 revenues (typically its slowest quarter) will come in between twenty-nine million dollars and thirty-two million dollars, representing comparable growth of about 81% to 100%. For all of 2008, the company currently estimates that its revenues will come in between two hundred and ten million dollars and two hundred and forty million dollars, representing growth of between 74% and 98%.
Given the current state of things, I don’t think we’re going to see any major changes in investor sentiment anytime soon. It’s too bad, of course, because there are some really interesting companies out there right now that are doing great.
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Tags: chinese stocks, investor sentiment, real estate market, stock market
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Mitchell is a Senior Editor at Lombardi Financial specializing in small-cap stocks. He’s the editor of a variety of popular Lombardi Financial newsletters, such as Penny Stock Reporter, Micro-Cap Stocks, and Monster Profits. Mitchell, who has been with Lombardi Financial for thirteen years, won the Jack Madden Prize in economic history and is a long-time student of equity markets. Prior to joining Lombardi, Mitchell was as a stock broker for a large investment bank. While Mitchell is not working he enjoys fly fishing, motorcycling and tending to his hobby farm.



