Migao Corp MIGGF

I expect a Migao rebound

[bnw]

The markets have been in a down mode (with the brief exception of the January 3, 2012 to April 2, 2012 period) since May 3, 2011.  At that time MGO SP was at $ 6.93.  What has happened since? Sino Forest and an unpopular large prepaid contract with a Russian supplier (since rescinded) and oh yes, a fall off in reported earnings.  I for one ignore earnings as they are the most easily manipulated line item on a financial report.  I prefer to base my assessments on Cash Flows from Operations (CF).  In the fiscal year ended March 31, 2011 MGO reported a negative CF of $21.66mil.  It subsequently reported negative CF's of $.67mil and $9.70mil in the next two quarters.  Pretty consistent with the previous year's performance. On Dec. 31, 2011 CF turned positive to $24.91mil and again was positive at $15.23mil for the quarter ended Mar. 31, 2012.  This to me signals a positive turnaround.  We'll see if the trend continues when the next quarter is reported on Aug. 14 or thereabouts but to my way of thinking, MGO has suffered more from the overall downward pressure on markets rather than any weakness with the company itself.  Presently I see signs that the market is about to turn positive.  I am waiting a confirmation of this, but when it happens I fully expect MGO to rebound, at least as high as $ 6.40 though the SP recovery will not be instant, it should occur within 9 months of a confirmed market upturn.