CAMK, is a “Chinese designer, manufacturer and distributor of branded outdoor clothing, footwear and equipment for children and teenagers”.
Today it issued a trading update (http://is.gd/WyLgJD), stating that it is “trading in line with market expectations for 2014”. Howerver, it also said: “the Group’s spring/summer order book is approximately 13 per cent. behind the same period last year, lead the Board to adopt a conservative stance towards its prospects for 2015”. This sent the shares down 19.4% to 37.50p.
CAMK appeared on Stockopedia’s Greenblatt screen earlier this year, and it was a company that I took a dim view of. Now you can see why. All the signs are there:
- It’s a Chinese AIM stock with a short listing history
- ROCE of 38.2% is implausibly high
- Operating margin of 27.8% is implausibly high
- PE of 1.78, suggesting the market knows something that the bulls don’t
- Plenty of cash (at least that’s what the accounts say), courtesy of stock issues
- Poor share price momentum
- Ostensibly a growth company, but at value-investor prices
- Poor cash collection, as witnessed by debtor days.
37.50p. ASX 3536