Is It Time To Short Every Single Global Hunter "Buy" Recommendation?
A week ago when we summarized the most recent round of inbound humiliation by one alleged bucket shop known as Global Hunter Securities, which basically has a buy recommendation on every single reverse merger ever to come to the US, even the acknowledged frauds such as in that particular case CCME, we said:"Oh well - at least we can be certain next week's non
seasonally adjusted initial claims number will be at a minimum one (The
Seasonally Adjusted can well be negative - it is from the BLS after
all)." We were referring of course to the imminent termination of the sellside analyst covering CCME Ping Luo. You can therefore pardon our lack of astonishment when we read, literally minutes ago, the following release from Global Hunter: "We are discontinuing coverage of the following companies: AMCN,CCME, CHLN, CRTP, CVVT, HRBN, and SDTH. We are discontinuing coverage of these companies due to the departure of our analyst and due to a shift in our resources to other areas in the China space." Well, since we predicted the former, it was more or less expected, but we wonder what "other areas" in the China space has Global Hunter morphed to: will they soon be covering an as yet untought of pyramid scheme with a Turbo Buy? Or do by other areas do they actually mean perform due diligence instead of stamping everything that promises a coverage fee with a Buy rating. Which brings us to the topic of this post. Since Gobal Hunter's advisory reputation is smoldering in the sewer, we believe it is time to voice our own unsolicited advice, and tell readers to short every single company on Global Hunter's buy list. If today's example of DEER is any indication, the profit will be at least 20% in the span of a few weeks.
As readers know, we already discussed today's unexpected "discovery" by the analyst community that DEER (NASDAQ: FRAUD) is the latest stock to likely meet its reverse-merged maker in the purgatory of Over The Counter/Pink Sheet bulletin boards, where bid ask spreads are greater than the price of the actual stock. Yet as the chart below shows, we wonder just what magical demarcation line existed at precisely $11 for over 7 months! The flatline manipulation where there was a magical bid at all costs at $11 is beyond question. Of course, now that the stock has plunged below it, it is game over, as the next support is in the $8.00 range, following which the stock is taking the bullet train straight to zero.
We are curious if the porn-addicted securities regulator will actually move a finger to explain this chart which even a blind, mute and deaf monkey would recognize the inherent manipulated price floor in the name (until it breaks of course).
What we are not curious about, is the opinion that Global Hunter had on the name as recently as March 14, with a Buy recommendation and an $18 price target, this time by another analyst, Joe Giamichael - alas Joe may be joining Ping on the seasonally unadjusted initial claims line very soom. The gist is pretty much along the lines of what one would expect from any other alleged bucket shop.
So back to our recommendation: Global Hunter currently has a Buy recommendation on 71 companies and an Accumulate on 21, is Neutral on 28 and has a Reduce and Sell on precisely Zero. While we don't know nor care how many of these 92 companies are Chinese in origin, we are confident enough in the firm's alleged incompetence that we would put on a Short - Long basket in a 4 to 1 ratio, where we sell all companies that Global Hunter likes and go long all their Neutrals. In a month we are convinced we will have made at least 20%.
The selected companies that can be used to build this Short Global Hunter alleged incompetence portfolio come straight from the firm's just released research update.
Those who are confused can create a simple CIX which shows the average
price of all names in the table listed above. We have a sinking
suspicion when we refresh this data in a month or so, we will again be
proven correct as the inverted 45 degree slope persists.
We urge readers to do their diligence, which means reading even 1 sentence from the predominantly fraudulent public filings of the Buy-recommended companies above, as this would be more diligence than either the abovementioned company or most investors have performed when they decided to go all in on margin in this latest bubble which is about to deflate.
Full coverage universe from Global Hunter.
Global Hunter Complete Update