A Second Look at Trusting the SmartHeat Move (HEAT)

SmartHeat Inc. (NASDAQ: HEAT) is such a small company that you might wonder what to think of a 100% rally in the stock after reporting a loss.  The company sells plate heat exchangers in the People’s Republic of China and it reported a loss in its fourth quarter after write-downs from two recent transactions.  The company also reported that it was initiating cost-cutting measures in an effort to save capital.  What seems to be driving the surge today is that this company said its slow demand in its markets was temporary and the company promised rigorous cost controls to keep its budget healthy.

SmartHeat is such a small company that even after a 109% gain to $5.72 it has a market value of close to $22.3 million.  Average volume is only 34,000 shares or so but the stock has traded almost 1.4 million shares today.  Even at $5.72, the 52-week trading range is $2.54 to $36.30.

It is amazing the rise and fall that has been seen in many of these highly speculative Chinese companies.  What is even more amazing is the bounce when you see any signs of life.  This is not really a bounce, but a catapult.

JON C. OGG