January 15, 2009

American Oriental Bioengineering Goes Shopping

AOB spent $70 million on a building yesterday, which sent shares down over 10% yesterday. The shares are down again today, close to their 52 week low. Authors at the Fool and Seeking Alpha have explained the move, which they believe was made in order to secure lowered tax breaks from the Chinese government.

The company still expects to grow income at a record pace into this year. Before you invest you must ask yourself if you trust the management team of the company. According to the articles, this has not been the first time that management has made questionable acquisitions. Still, at a price of just over $4.00 a share, this appears to be an opportunity to "buy cheap growth."

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