The market often makes little sense to me; if a company like Caterpillar (CAT) reported an earning report like we just saw from E-House Holdings (EJ), CNBC anchors would be in tears of joy and the stock would be up 20%. Instead EJ is up 2%, despite beating by 15 cents... AND increasing guidance. My first thought this morning when I saw the numbers was going to have to chase another one - guess not.
We had a very small long position as the stock had broken support the past few weeks but we are using today's muted reaction as an entry point to expand our position by just under a 2% allocation. Even better we have a nice entry point near $20.80 which is not too far above a nice support area so if the market begins to punish E-House Holdings again, we can exit with minor damage. We'll place a stop loss somewhere in the mid to upper $19s. As the month of October shows - this is a volatile stock. (range of $17 to $24)
I will update this entry with more details on the earnings as I have time.
8:08AM E-House China reports 3Q09 net income of $0.46/ADS, ex-item, vs. $0.31 First Call consensus; revenue increased 119% y/y to $86.2 mln vs. $78.9 mln consensus (EJ) 20.42 : Co issues upside guidance for Q4, sees revs of $103-$106 mln vs. $85.9 mln consensus. Co states, Our strong third quarter results clearly demonstrate the success of our strategy and our ability to create value for our shareholders. For the whole year of 2009, we expect to achieve more than 10 million square meters of new properties sold, which will set an industry record and further solidify our industry leadership position.
E-House (China) Holdings Limited (E-House) (NYSE: EJ - News) is a leading real estate services company in China. Since its inception in 2000, E-House has experienced rapid growth and is China's largest real estate agency and consulting services company with a presence in more than 30 cities. In addition to its national presence, E-House offers a wide range of services to the real estate industry through its various business segments including primary sales agency, secondary brokerage, consulting and information services, advertising and investment management.
Long E-House Holdings in fund; no personal position