6/30/11 - Failed Pump Makes Xinde Technology (WTFS. OB) Perfect

Here's a really quick post today because I don't have a lot of time.

Xinde Technology (WTFS.OB) is my latest perfect stock selection. On 4/14/11, this Chinese company did a 4-1 forward split. It appears they needed to unload some shares, so about two weeks ago, they initiated a $750K promotion in hopes of minimizing the slide in share price. See link below for the promotional literature:


Well, the pump failed and the share price has cratered from .80 to .08 in the last two weeks. The bullet points below are why I think WTFS.OB is now perfect:

  • The company still makes well over $100M annually in revenue
  • As of 6/29/11 the company has a PE of 1, which makes it attractive fundamentally
  • Many Chinese stocks have been bouncing recently after being hammered by the market the past 3-6 months
  • Its chart appears to be bottoming
  • The short interest in the stock is increasing, which fuels bounces as shorters cover

The morning of 6/30/11, WTFS.OB sits at $0.118. There is a chance that the stock retests the .09 area and could possibly go lower. However, I think at these levels, the upside greatly outweighs the risk. I'm putting a target of $0.25 on the stock to be reached at some point in the next 2-3 weeks. Xinde Technology (WTFS.OB) is the next perfect stock.