Lottery Ticket Purchase 100 of VIMC: EXTREMELY SPECULATIVE

As a lottery ticket purchase I bought 100 shares of VIMC at $1.97 this morning.  This is a Chinese company called Vimicro International, and its business is described in this description from Reuters:   Reuters.com  It is hard to find any information on the company.  It filed last year an annual report with the SEC for 2007.  Form 20-F I could not find a more recent quarterly report filing with the SEC. 

I did find its 3rd quarter release at Reuters, and I can pinpoint in that report something that attracted me to VIMC as a lottery ticket only.  Cash was listed at 119.762 million U.S. dollars. Reuters  I did not see any long term debt.  The market cap of the company now is around 70 million at the $1.97 price according to the statistics at  Yahoo! Finance.

Price to sales is at .78 and price to book is .48.  Yahoo! Finance

The company also announced a stock repurchase plan  of up to 25 million worth of its ADSs,Reuters.

The only report on this micro cap Chinese company comes from Morningstar which has a favorable five star rating on it.  I recognize, as does Morningstar, that this stock has a high level of uncertainty attached to it and I view it as extremely speculative.  Therefore, I devoted less than $206 of my capital to it, an amount consistent with my lottery ticket category.     I expect some of these lottery ticket purchases to end up as worthless as my powerball picks.

I believe the company did an IPO in the U.S. in 2005 and the stock traded up to $23.34 in 2006 before starting its long descent to the current price of less than $2. For 2008 and 2009, it has been fluctuating in a range of $1 to $4.

This is a link to my Gateway Post on my Lottery Tickets category in my asset allocation scheme. LOTTERY TICKET PURCHASES: LINKS IN ONE POST

DISClAIMER

  I am not a financial advisor but an individual investor trying to navigate my way through a difficult market. I have never worked for a financial institution and never will.  In these posts, I am acting as an unpaid financial journalist and an occasional political commentator.   I am also aggregating financial news stories that I view as important and providing readers of these posts with links to those articles, sort of a filtered, somewhat intelligent, free search engine.  Any discussion made by me of particular securities  is not a recommendation to buy or to sell.  Trade at your own risk.  Consult with your financial advisor prior to making any purchase or sale. I will try to identify my sales too but it may take a few minutes after I implement them to create a post explaining my reasons.  The sale may before or after the post.  Before buying or selling any stock, even one recommended by a trusted financial advisor,  please research it and make up your own mind which is what I always try to do.  Research would include reading reports, reviewing financial records, earnings estimates, sec filings and prior earnings releases and news.  In this post, and all others by me, I am merely describing my reasons for purchasing  or selling securities, and the potential pitfalls that I identified prior to purchase or the reasons for a sale.  The securities mentioned in this and all posts written by me may not be suitable for others based on their unique financial position and risk profile.  By way of example, it is unlikely that I will ever need the funds contained in my retirement accounts. Always read the prospectus before buying a Trust Certificate, bond, preferred stock or other bond or bond like investments.  Information contained in my posts has been obtained from sources believed to be reliable but cannot be guaranteed.  It is always important to follow the investment process. the investment process/links to further information on canadian energy or royalty trustsInvestment Process Part II: Bonds and Bond Like Investments   NOT A RESEARCH SERVICE/Add of PWE Last Week   These posts by me do not constitute investment advice, nor shall they be construed as a guarantee of future results, or as an offer of any transaction in securities.   All content in these posts is provided for informational and entertainment purposes only, and it is a form of entertainment for me.  Anyone interested in a topic may want to review all discussions contained in the blog about it by using a relevant search term in the box at the top. Opinions are subject to change and they certainly evolve over time as information is assessed and analyzed for compatibility with prior opinions, the only process for a serious investor, and a topic of frequent discussion in this post.