posted
Hey guys, sorry I haven't been as active as I used to. This pick is currently my favorite pick and I have done a lot of DD. AAACW is buying the warrants of the company of AAAC. Let me now explain the great potential.
AAAC.OB is a SPAC company, there main purpose is to find a private company to come in and merger with them.
If you read that press release you will see that after the merger there will be 15.3 million shares. Therefore at $15million net income that is almost $1 per share. If you price it with a conservative 15 P/E the stock should be at $15 minimum.
On April 17th, there will be a shareholder vote to pass this merger. Upon approval the stock will then be placed and trading on the nasdaq very shortly after. If you look at JGAC.OB they are a SPAC that got approval yesterday, and the company merging in is a lot less profitable and not as enticing. This gives me huge confidence this will pass.
Also look at the massive insider buying buy Jeffrey Feinberg of JLF fund. Go to www.insidercow.com and type in AAAC to see.
If the merger doesnt go through the warrants aren't worth anything that is why they are lagging to stock price. Currently AAACW is $1.96 and strike price is $5. AAAC is $7.60 so its lagging quite a bit. This is good! When the merger goes through it will catch up.
If the stock price goes to just $10 the warrants themselves are worth $5. You can buy the warrants now at $1.96 through the symbol AAACW.
I know this write up sounds like one of those typical convincing pump and dumper but it's not. I am invested in this one and believe it to have an amazing/risk reward.
I've been on allstocks for many years, the mods here will credit me on my honesty of putting out picks I believe in.
Posts: 6266 | Registered: Jun 2004
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posted
Hey Stocktrader, nice to see ya 'round. with the warrants at a set price of 5.00 is that all they will be worth or can they trade higher? Interesting stock here. TMAN...
-------------------- In the end, trust only yourself when trading stocks. Posts: 2048 | From: Texas | Registered: Feb 2006
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posted
The strike price is $5.00, I read in the filings that the warrants are callable at a certain price but WAY above where they are trading now. No reason why they couldnt trade higher. $5 is the strike price of the warrant not the most they can trade. For example if the stock is at $8..fair value of AAACW would be $3.
Guys if you need an example look at YTEC and APWR..those are recent SPAC's that used to trade at $7 prior to merger just like this one.
-------------------- Disclaimer: Not accountable for anything I say Posts: 6266 | Registered: Jun 2004
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posted
Yup..$3 soon, I was hesistant to put this on the boards because its so undiscovered and dont need people coming in that will sell out too early. Remember the company that is merging in will be making nearly $1EPS...warrants could go BIG. Holding until at least $3.60 then selling half
-------------------- Disclaimer: Not accountable for anything I say Posts: 6266 | Registered: Jun 2004
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posted
warrant move short term will probably be limited to the upside. After the merger on the 17th it will need to get its nasdaq listing and some attention from the big boys to start making its run. At that point stock should hit $10+ once quarterly reports come in. thats when warrants will explode again. HOLDING Posts: 6266 | Registered: Jun 2004
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quote:Originally posted by tmanfromtexas: The volume just dried up on this one. Just waiting and holding. TMAN...
Won't have much volume. To be honest I got more risk adverse here and even though im almost positive this merger goes through, I don't want to loose my complete investment because if it doesnt the warrants are worthless. Therefore, I sold my position, but I'm going to be buying as soon as I see the news approving the merger on the 17th
-------------------- Disclaimer: Not accountable for anything I say Posts: 6266 | Registered: Jun 2004
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posted
Ok, hopefully this question won't make me seem as green as I really am...but here goes. With what I know about warrants, this seems like a sure win investment. If the warrant price is 2.53 and the company's stock is currently 7.82, why wouldn't you want to stock up with as many as you can get your hands on? I read that the expiration date on these are in 2012. Even at current pre-merger prices, it's a 200% gain. Is there some stipulation on these that I am unaware of?
Posts: 1802 | From: Utah | Registered: Mar 2008
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posted
Sorry, up too late. Was playing with wrong numbers. Let me re-pose the question. If the strike price is $5 (is this the price you can exercise the warrant for?) and the current price of stock is 7.82, isn't that still a 50% return on invesment?
Sorry if this is a dumb question but I'm still learning. Thanks for any more infomation.
Posts: 1802 | From: Utah | Registered: Mar 2008
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posted
Ok, slowly thinking this through. If I were to buy the warrant at current price of 2.53. It would still cost me $5 (above the 2.53) to exercise it? Making the cost 7.53 per share to buy a stock that's 7.82 at market today. Making a 4% gain?
Once again, still new and my brain works better as I ask and pose the questions. Would welcome any clarification. Thanks again for the patience.
Posts: 1802 | From: Utah | Registered: Mar 2008
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posted
Sorry had to run out. Okay, so now we have the merger finalized. Think about this. Go look at the prospectus filing showing the revenue and net income of the company that merged in. Huge growth in the automotive industry, and this company is projecting 15million net income. It is a growth company as revenues and net income are increasing greatly year to year. For growth stocks P/E average is about 25-30. With 15million shares outstanding after the merger and 15million in net income EPS should be around $1. Nasdaq listing will be very soon for this company. Remember the warrant theoretical value should be stock price - $5.00 strike. This should be another APWR, YTEC move in a few months time.
-------------------- Disclaimer: Not accountable for anything I say Posts: 6266 | Registered: Jun 2004
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posted
Gotta be patient. This isn't going to be a one week winner. Bought in at $2.65, $2.68, and $2.70. Don't mind being down here at all!
This stock will soon be on the nasdaq. Once it is I'm expecting press releases to bring some exposure. Once they start gaining credibility the stock should move to $10 no problem, giving the warrants a $5 price.
From Hunan Tongxin website: "The company was awarded as follows: Top 100 enterprises for China Auto Parts, Top 20 Private Enterprises of Hunan Province, First Grade of Technology of the State Council in 2003. The brand name Tongsin was evaluated as a provincial famous brand in Hunan for 4 years, and the auto body of Tongsin was honoured the famous brand in Hunan by related tax departments."
Also more acquisitions expected: "Earnings guidance is expected to reach $15M. TXI anticipates the Chinese light and commercial vehicle market will continue to grow between 25% and 30% and it will complete an add on acquisition by the end of 2008."
So you now have a company about to be listed on nasdaq with a forward P/E currently of around 8 and further acquisitions announced by end of year.
Posts: 6266 | Registered: Jun 2004
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posted
Small time players who are tired of waiting are selling, no one is buying because its undiscovered on the OTCBB. Nasdaq listing will be very soon, and I expect shortly after a PR flurry to bring about some exposure in the investment community. Holding long.
Posts: 6266 | Registered: Jun 2004
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posted
Go look at their last press release, they already applied for nasdaq a while back. Could be any day now or up to months. Took YTEC 2-3 months to get nasdaq listing but its a $15 stock now Posts: 6266 | Registered: Jun 2004
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posted
Time to load up today! Wow look at these 07 earnings http://biz.yahoo.com/prnews/080430/clw040a.html?.v=1 After merger there is right now 13million O/S..they made 10 mill in 2007..trailing P/E .77 at a PE of 15 the common are worth $11.55. Warrants worth $6.55 at that point, warrants now at $2.67.
Forward P/E even lower, 08 they anticipate 15million net income!
-------------------- Disclaimer: Not accountable for anything I say Posts: 6266 | Registered: Jun 2004
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posted
Tman or anyone still here with me? It has been an awesome ride. Had shares of AAACW since $1.80, sold them and rebought only .05 higher back at $2.60 range, and bought more at $2.80 yesterday! Have you guys followed its 07 results or its 08 forecast! It makes this thing look so undervalued. Based on $1EPS this deserves to be at $15+ with the high demand for commercial vehicles in China.
I also bought AAAC at $7.85 yesterday. COO in conference call said nasdaq is any day now. Thats when institutions and investors will say oh boy it is time to jump in.
JLF fund owns like 20% of AAAC oustanding I believe.
Posts: 6266 | Registered: Jun 2004
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posted
Stock, I got out at 2.80 I believe and am on the sidelines. I have been looking at aaac and may jump in when funds are free. Do you think that the nasdaq listing may already be priced in for now until they get another quarter or two under their belt? Just curious for opinions. TMAN...
-------------------- In the end, trust only yourself when trading stocks. Posts: 2048 | From: Texas | Registered: Feb 2006
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posted
What made you jump out at $2.80 out of curioisity? I dont think nasdaq is priced in. Not enough investors know about this. When it hits nasdaq thats when people will see it.
Posts: 6266 | Registered: Jun 2004
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posted
So stock22, you say you don't think that it's priced in for the nasdaq listing? I'm thinking of getting in but we'll see. I might try to accumulate a position in hopes of beating the announcement.
Posts: 6 | Registered: May 2008
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