This morning, top tier Chinese reverse-merger shop Global Hunter Securities issued a truly enlightening research report entitled “China: Margin of Safety Investing in China – Oxymoron or Moron?” At the end of the report is the following chart, reformatted for this post:
Research Cov. IB Clients Rating Count % of Total Count % of Total Buy 68 55.3% 15 60.0% Accumulate 21 17.1% 3 12.0% Neutral 28 22.8% 6 24.0% Reduce 5 4.1% 1 4.0% Sell 0 0% 0 0.0% NA 1 0.8% 0 0.0% Total 123 100% 25 100%
Not a single stock in their coverage universe, not one, is rated a “Sell.” Is it possible that the sharp minds, like Ping Luo, at GH have been unable to detect even one shady Chinese reverse-merger stock? Given that fraud is endemic to both the reverse merger space and China, it seems absurd that these folks believe over 70% of their universe is a buy or accumulate. Are they so blind, so greedy, or so complicit that none are outright sells?
Considering that Global Hunter is one of the shops that recommended both China Media Express (CCME) and RINO Intl (RINO) to clients, perhaps the better question for investors to ask is “Global Hunter: Morons or Mega-Morons?”