Friday File — Brands, Hospitals and the Yuan

by Travis Johnson, Stock Gumshoe | August 16, 2015 12:15 pm

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Source URL: https://www.stockgumshoe.com/2015/08/friday-file-brands-hospitals-and-the-yuan/


16 responses to “Friday File — Brands, Hospitals and the Yuan”

  1. lynnegaudette says:

    Change of subject, I received an email from Investor’s Alley saying that 19 major banks to shut down. Do you have any comments about this?

  2. archives2001 says:

    Great article today Travis!
    btw, I’ve recently been getting teasers on selling put options and I note Scottrade and others are now allowing this.
    Perhaps you could give us your take awa offer some links, pro and con.

  3. richtog says:

    Is it not TradeStops.com rather than Tradestops.net?

  4. ken says:

    Travis: Your comments on the Yuan and the 2% change is the canary in the coal mine. Every Govt that has tried central planning has lost control at some time. And you are also correct that tying an economy to the price of gold is not too effective either but at least the price and ownership of gold is not unlike the ability of a nation of produce goods for export and the value of its production property be it ag land or non ag land which are the only metrics that should be accepted and used.

  5. pjwa says:

    In itself I do not see the Yuan adjustment as a big deal, as you say Travis; though it maybe one more ruction point on Xi’s forthcoming US trip. But I think he will fairly say that Asian currencies had tended to be weakening against the USD recently, which is the competitve marketplace.
    Certainly China’s economy needs bolstering.
    I disagree with your use of the word bubble, particularly in respect of housing. The Chinese housing market has a very significant amount of equity in it. If anything, it had been over-restrained by government action. I sold two properties earlier this year to buy a house in the UK; I did not think the market was heading South, and I will retain an interest in two more all admittedly in Shanghai.
    As for the stockmarket, The China A share Fund’s portfolio is on a prospective PE of 13.7x (end July) and is expecting 30.7% earnings growth this year. Having lagged the market rally last year, it has been catching up in 2015. It is mildly geared presently, expecting its portfolio to perform positively.
    The market, though, is too heavily dominated by large caps in a few sectors. The government, after allowing margin-trading, like many others failed to recognise the extent of margin-trading engendered outside the brokerage system. That certainly created an over-inflated bubble, which has seen a significant correction. Although the enormous rally had been very rapid, it followed a desultory market over 5 years. The valuation at the outset was definitely low. Whether the government’s direct support and now implicit backing is sustaining a ‘bubble’ is not yet clear.
    It had though foolishly recommended investment when the index was rising, which had left it an obligation. So we do not now have a clear, free market, though the small medium caps in the private sector are likely to be more directly company-performance driven.

  6. pjwa says:

    Apologies for the repetition; separately China is so de-stabilising foreign website access that usage is wretchedly slowed and my first attempt at posting did not appear to have succeeded.

  7. Are you overseas as well, David? We don’t usually have issues with comments not submitting unless the comment is flagged for moderation, though sometimes cached pages will cause it to appear that the comment isn’t published yet.

  8. traydon says:

    Back to ICON for a minute, if we may. Thank you for bringing it to our attention months ago, Travis. I thought it was overpriced, but kept it on the radar and subscribed for email alerts from their website. On this recent drop, I decided to buy. The main reason is their interim CEO, Peter Cuneo, whom you did not mention. He was a board member and I believe the departure of the old management including the founder was actually a decision made by the board. Do a little research on Peter Cuneo. He has had four turnarounds at companies as diverse as Clairol, Black and Decker and Remington Products and Marvel Entertainment. I cannot imagine anyone more qualified to move this share price back up and to the right.

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