Saturday, August 4, 2007

Fuwei Films (Holdings) Co. Ltd

Fuwei Films (Holdings) Co. Ltd is a NASDAQ listed security that has been trading in a range between $5.58 and $18.43 over the past year. With 13,062,500 shares outstanding, a recent price of $6.47 gives a total market capitalization of $91,437,500. While there are certainly larger companies, Fuwei Films (Holdings) Co. Ltd has definitely earned its place in the pack. Last year, Fuwei Films (Holdings) Co. Ltd created $0.68 in earnings for every share outstanding.

Fuwei Films (Holdings) Co. Ltd is currently priced by the market at 9.50 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Fuwei Films (Holdings) Co. Ltd is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.