March 4, 2010 (Chinavestor) Chinese hotel chain operator, Home Inns & Hotel Management (NASDAQ:HMIN) released 2009 fourth quarter earnings today. Last quarter revenues increased from 2008 but fell slightly compared to the previous quarter. Nevertheless the company reported +38.7% revenue growth for full year 2009 compared to last year.
Still, investors are selling off shares of Home Inns & Hotel Mgmt. (NASDAQ:HMIN) in a similar fashion to Ctrip.com (NASDAQ:CTRP) on February 3. Yet Ctrip.com ended the month up 22% after investors digested the news. So it pays out to pay attention to details.
Earnings depict a similar picture to revenues: last quarter earnings grew from 2008 Q4 but dipped from 2009 Q3 - nevertheless the company made a lot more money in 2009 then in previous years. This is best illustrated by the red dotted trend line - earnings are on the rise!
What makes me to suggest that Home Inns & Hotel Management (NASDAQ:HMIN) is undervalued is the fact that current stock price of $33.35 is the same as back in December 2007 - yet revenues more then doubled and earnings grew four fold sine that year. Investors should look at long term trends in determining future stock prices - and not be goofed up by one quarter results. 2009 Q4 numbers break the uptrend - no question about it. But the boost from the Chinese New Year will come to show in 2010 Q1 numbers. Expect a nice surprise.
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