Xinhua Finance Media Limited

This stock is another Chinese company. The fundamentals do not look that great, but the chart and the analyst recommendations look positive. As we have stated before, when using foreign based stocks for a covered call, we strongly recommend the hedge wrap strategy due to an increased volitilty level. All investing carries risk. Please do not invest money you cannot afford to loose.

Xinhua Finance Media Limited (XFM) is a diversified media company in China. XFM has developed an integrated platform that includes the creation and production of content that is distributed across nationwide television and print media outlets, and radio in Beijing and Shanghai. XFMGÇÖs business operates across five groups: media production, broadcasting, print, advertising and research. Beijing Taide Advertising Co., Ltd. (Beijing Taide), an affiliated entity, XFM acquired 50% of Beijing Jingguan Xincheng Advertising Co., Ltd., or Economic Observer Advertising. In June 2007, it acquired Singshine (Holdings) Hongkong Limited and Beijing Mobile Interactive Co., Ltd. On July 2, 2007, the Company acquired the entire stake in a Virgin Islands-based company, which holds 100% stake in Convey Advertising Company Limited, a Hong Kong-based company. In November 2007, the Company acquired JCBN Company Limited, an advertising company with operations in Shanghai, Beijing and Hong Kong.

Xinhua Finance Media Ltd: Stock Rating Summary

3
Xinhua Finance Media Ltd, a micro-cap company in the consumer services sector, is expected to underperform the market over the next six months with above average risk.

FundamentalGrade: D
• The most recent quarterly earnings report was slightly lower than analysts’ consensus forecast. Neutral/Negative
• Earnings growth information is unavailable or inconsistent.
• Earnings estimate revision information is unavailable or inconsistent.

OwnershipGrade: C
• Insider trading information is unavailable or inconsistent.
• Shares are neither being accumulated heavily nor sold heavily by financial institutions. Neutral for a small company like XFML

ValuationGrade: C
• The price-to-earnings multiple is lower than average for all stocks in the StockScouter universe. Positive
• Price-to-sales information is unavailable or inconsistent.
• The ratio of XFML's price-to-earnings multiple to its five-year growth rate is unavailable or inconsistent.

TechnicalGrade: NA
• Relative strength information is unavailable or inconsistent.
• Moving average information is unavailable or inconsistent.



Average brokerage recommendation is Strong Buy.


Trades:
Covered calls
Buy stock @ 4.88
Sell March 5 call @ 0.65
13.3% return in 37 days

Hedge Wrap
Buy stock @ 4.88
Sell March 5 call @ 0.65
Buy March 2.50 put @ 0.10
11.3% return in 37 days

Talk to you tomorrow.