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Solutia Inc. (SOA)
The stock has moved from $19.51 to $27.52, realizing the daily gain of more than 41% for SOA investors. The reason for the sudden high jump in its stock price is due to the offer from Eastman Chemical (EMN) to acquire the whole company for $3.4 billion to leverage the growth of EMN in emerging markets, especially in the Asia Pacific region.
SOA is the global manufacturer of materials and specialty chemicals used in a range of consumer and industrial applications, including inter-layers and aftermarket film for automotive and architectural glass, chemicals to promote safety and durability in tires; and encapsulants, coatings and specialty chemicals for electronic, industry and energy solutions. At the current price, SOA is valued at 13.3x earnings, 3.5x book value and 14.9x operating cash flow.
Datawatch Corporation (DWCH)
The stock moved up from $6.29 to $8.6, giving investors a gain of 36.72% within one day. It is engaged in the design, development, manufacture, marketing and support of business computer software in the field of operational reporting and data analysis, data integration, enterprise content management and business service management markets, to allow the customers to access and analyze information. The movement of DWCH is because of the strong first-quarter results, released on the previous trading day. The first quarter ended December 2011 had a revenue increase of more than 50% year on year to $6.27 million, and the license revenue has been up 99% year over year. At the current market capitalization of $53 million, it is valuing the company at the very high level of 435x P/E, more than 8 times the book value and 46.7x the operating cash flow.
Quepasa Corporation (QPSA)
The company’s stock price moved from $3.68 to $4.9, for a daily gain of 33.15%. QPSA is the company in the social discovery field and it is the owner of Latin-American platform Quepasa and myYearbook. QPSA is the social media technology field focused on Latin audiences globally. At the current price of $4.9 per share, the whole company is worth nearly $165 million, giving the high valuation of nearly 12x its book value, and more than 10x its sales. TTM, it is generating negative earnings and operating cash flow, so the earnings and cash flows multiple is not applicable for this firm for now. This position can be considered to be extremely speculative for any investors.
Renren Inc. (RENN)
The advance of 26.2% within a day has given RENN a more than 25% daily gain closing of January 27. Anybody in the Internet technology field would know the company as the Facebook of China, the social networking Internet platform, based in China. The company generates its sources of revenue from online advertising and Internet value-added services. The company’s platform includes: renren.com, game.renren.com, noumi,com and Jingwei.com. The recent jump in its stock price happened after the report that Facebook Inc. may file for an IPO next week. Currently, the market values RENN at 1.7x its book value, 23.8x its operating cash flow, for the whole company worth more than $2 billion.
Disclosure: No position
About the author:
Money manager into global equities, especially with US and Vietnam markets. CFA level 3 candidate. Lecturer for Stalla - CFA course in Vietnam Visit Anh Hoang's Website
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