Toro Investment Partners

[AlphaMine]

Kevin-  what are your thoughts on implied vol here?  Vol showing nothing to worry about in Dec (Tradestar pointed this out).  Anything interesting in Jan or March maturities?  I am long the common and have been trading around options.  I still want to express long bias

Like I mentioned off hand before, the trading volume has become anemic as it always does between Thanksgiving and New Years, some who work on Wall Street could speak to the fact it is a ghost town during this period.  That being said I don't think one can draw any conclusion from price action with volume at 25% or less than the avg daily volume, most particularly in smaller cap stocks with smaller floats.  Even medium sized orders move the stock noticably right now.  I used to think he technical traders reliance on volume as a "qualifying" characteristic was just Voo Doo Magic but after trading during this season for the last 7 years I can tell you my personal rule is to only trade super high volume stocks (BAC for example) during the holiday season.  For a few years I was actively trading BIDU and I can tell you it would just act crazy as heck after Novermber then go right back to normal in mid January when volume came back.

I think the opportunity in Jan-Mar for NQ sets up incredibly well with a number of factors pushing the long side.  All of this is predicated on at least a decent special report/audit of course but after new year you will have funds looking hard for performance.  An NQ in the $13-$14 dollar range, with a clean bill of health, it's a no brainer double IMO.  It deserves to trade at least at 70-80X PE based on growth, more if the multiple compression of MoMo stocks lightens up in Jan as I anticipate.  The more I see CNBC talking heads parroting that we have a buble the more I think we'll climb that wall of worry.  As tradestar's well writtn blog points out, I belive if you are looking for the short term gain then the exit point for you should probably be right before the report results are announced, in his case study it appeared to me that stocks routinely sold on the news with nice run ups preceding the report but after it's release date is anounced.  However I wouldn't be surprised at all to see NQ north of $30 in mid-late 2014 unless there is some major unknown negative or the macro-Market environment becomes challenging.

If it deserves to quote at 70-80 times as you mentioned, which QIHU, VIPS etc do quote at, then your price target of $30 is off by $80-$90 i.e next year EPS=$1.50 = price target of $100-$120. Might sound insane, but this where I think this company should be in 1 year from now.

Yeah you are correct and in a hot bull market a stock this size can and often does trade at a PE nearly equal to CURRENT annual growth %.  If the report comes back clean I expect that to qualify the stock for a higher PE than before the MW report because of how scrutinized it has been.

The way the growth has been lately vs what I would say was a slow start for NQ (since inception) makes me think if they were doing anything shady it was a bit in the past but allowed the transition into where they are now.  You know like the Aristotle Onasis move where you say you have a fleet of boats, go get a bunch of huge shipping contracts AND THEN use those to actually buy the boats you alleged to have from the start.  It's a relatively victimless fraud as long as the contracts are fulfilled properly on time.  NQ has the revs and growing potential now for sure (right we all essentially agree on this point now?) so if they did a little dirt to get here it will warrant only a slap on the wrist at most IMO.

[admin]

Lets not lose sight of the fact that so far there is only a little smoke and no fire on that 'little dirt'. And what Toro showed us about the MW report (combined with their post-reverse merger track record and the media blitz), much of that smoke is created by MW.

There isn't, as of yet, anything near a smoking gun, except that of MW, which was clearly not written in good faith.

That doesn't mean there are iron clad guarantees, but those that did DD in China have bought post MW, that should considerably increase comfort levels, as did the fact that Macquarie wasn't worried about Yidatong.

[kevinh]

So where exactly is this Toro update? Their DD was completed on Nov 26th...

[Mountainbiker]

So where exactly is this Toro update? Their DD was completed on Nov 26th...

Hmm, the SP is weakening going into close....

[harry2013]

So where exactly is this Toro update? Their DD was completed on Nov 26th...

From Toro email:

..........

We have not found anything of concern in our DD.

If we sold, we would need to report our sale per SEC disclosure rules, since we hold a 5%+ position. We have not sold, so we have not reported anything.

We don't know what precipitated the move on Friday, and it's impossible to tell at this point. As longer-term guys, we don't care too much about it.

We have not put anything out because we did not think the timing was good, and we do not want our message diluted by half a dozen coordinated short sellers on SA.

[Haggerston]

So where exactly is this Toro update? Their DD was completed on Nov 26th...

From Toro email:

..........

We have not found anything of concern in our DD.

If we sold, we would need to report our sale per SEC disclosure rules, since we hold a 5%+ position. We have not sold, so we have not reported anything.

We don't know what precipitated the move on Friday, and it's impossible to tell at this point. As longer-term guys, we don't care too much about it.

We have not put anything out because we did not think the timing was good, and we do not want our message diluted by half a dozen coordinated short sellers on SA.

Thanks Harry. Nice one.

[admin]

Thanks for clearing that up

[Mountainbiker]

So where exactly is this Toro update? Their DD was completed on Nov 26th...

From Toro email:

..........

We have not found anything of concern in our DD.

If we sold, we would need to report our sale per SEC disclosure rules, since we hold a 5%+ position. We have not sold, so we have not reported anything.

We don't know what precipitated the move on Friday, and it's impossible to tell at this point. As longer-term guys, we don't care too much about it.

We have not put anything out because we did not think the timing was good, and we do not want our message diluted by half a dozen coordinated short sellers on SA.

I guess Toro knows how the short sellers work. They will do it when it is least expected.

[kevinh]

Does Toro actually own 7.6M ADRs or 7.6M common shares. 7.6M common shares does not put them at the 5% level while 7.6M ADRs does.

And the 13-G filed shows them owning ADRs, not common shares, which would make their entire NQ position ~$100M. See below:

http://archive.fast-edgar.com/20131112/A...-yNFG-q-1/

"American Depositary Shares each representing five Class A Ordinary Shares, par value $0.0001 per share
(Title of Class of Securities)"

[RacerX]

Does Toro actually own 7.6M ADRs or 7.6M common shares. 7.6M common shares does not put them at the 5% level while 7.6M ADRs does. And the 13-G filed shows them owning ADRs, not common shares, which would make their entire NQ position ~$100M. See below: http://archive.fast-edgar.com/20131112/A...-yNFG-q-1/ "American Depositary Shares each representing five Class A Ordinary Shares, par value $0.0001 per share (Title of Class of Securities)"

According to Bloomberg they own 1.518 million ADR's  4.88%

Other big holders:

Altimeter   1.899            6.11%

Oberweis 1.802             5.8%

Chinarock 1.711            5.5%

GSR Partners  1.437     4.63%

B of A 1.304                  4.31%