Rodman & Renshaw Wave the White Flag on China

Ian Cassel Blog Leave a Comment

Rodman & Renshaw posted on their website on Friday that they are dropping coverage on 14 China companies.

“Effective immediately, we are terminating coverage of the following companies to allocate resources more efficiently within our coverage universe.   Upon termination of coverage, any of our prior projections should not be relied upon. ”

I’m somewhat surprised at this move, but then again I’m not. Maybe Rodman’s research department was just sick of being the butt of all jokes at research analyst cocktail parties.  I’ve been to them, yes they do exist, yes they are lame. Most small cap research firms are a joke to begin with.  I’ve been on the other side of the table many times as the wink wink/nod nod was gestured.  “So you want research coverage huh?  Well let me introduce you to Joe CocknBalls investment banker”.  But I digress. Bashing China Small Caps seems “so last year”, so maybe this is the bottom of the trough so to speak.  I still say to pick up 30 of these chinese names, maybe 25% are frauds, and the rest are real and so cheap they would likely outperform anything else you buy as a group if your willing to hold for a few years.  Shorts and Short Publications have been pounding China Micros down to low single digit PE’s (if you believe the “E”) for months/years.  I’m still waiting for that lone analyst to make a name for himself vocally going long a few of these names.

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