Yes, unfortunately I can't help feeling that may be some truth in the points raised by Varuka and Gohawks.
Under normal circumstances, I would tend to think that aggressive buying of shares by the MD of a company is a fairly strong signal that the share price of a company is likely to be headed higher in the near future.
And indeed, one of the reasons I first bought into this company was because Charles Chen had been loading up on VMT shares. Unfortunately, that was six years ago, and -adjusting for the consolidation- the share price back then was almost three times higher than the share price at the time of writing...
So it does make you wonder if it is prudent to read to much into Charles Chen's VMT share purchases. You can't entirely rule out the possibility that he might be a little unhinged.
When in doubt, it is sometimes wise to turn to a higher power for guidance, and so I wonder if all-knowing Dr. Google might be able to provide us with some insight on this matter.
A former Google data-analyst by the name of Seth Stephens-Davidowitz recently wrote a book on 'big data' and the internet, and in one chapter of the book he asks the question as to whether Google searches can be used to predict where stock prices were headed.
At one point, he mentions that there was a correlation between Google searches for 'iPhones' and iPhone sales, however, he seemed to think that this information was already incorporated into the Apple share price, leading him to conclude that analysing Google searches can't be effectively employed to 'beat the market'. I'm a bit sceptical about this suggestion, and I doubt his conclusion would be applicable to any stock with a market cap below the $100 million or so mark.
Given that searches for iPhones seem to have correlated with sales of the same product, is it possible that Google could give us a few clues about how many units Vmoto have been shifting in recent weeks and months?. I decided to investigate this on the Google Trends website.
Well, over the past 12 months, it seems that worldwide searches for the term 'Vmoto' have been pretty stable, as can be seen below.
Nothing particularly notable there. However, it should be noted that recently Vmoto have shifted away from selling in low-margin, high volume regions to higher-margin and lower volume areas. In short, the search term 'Vmoto' is probably not the most reliable indicator for worldwide Vmoto sales.
The term 'Super Soco' may be a better indicator, particularly given the strengthening ties between Vmoto and Super Soco. In the case of Super Soco, Google searches do seem indicate that there has been an increase in the number of searches for this term around the world lately:
You can see above the spike in searches for 'Super Soco' in April, which coincided with the much hyped launch of that new 'Super Soco CU' scooter. It is interesting to note, however, that the 'Super Soco' search trend has been fairly solid since the product launch in April, and over the past week the number of searches for the term 'Super Soco' was still more than double the average number of weekly searches for the term in the second half of 2017.
Google trends might also be able to provide a bit of a gauge as to the level of interest in individual motorcycle models sold by the company. There are two Super Soco bikes currently advertised on the Vmoto website: the Super Soco TS and the Super Soco TC.
Here are the worldwide Google Trend results for the TS over the past year. These results do seem to suggest that there has been a rising level of interest in this product over the past two months:
Here is the same for the TC model. An even stronger trend is evident here, with searches hitting a 12 month high within the past week:
If we assume that Google searches are an indication of sales, as was suggested by Stephens-Davidowitz, these Google Trends results might imply that some of Vmoto's distributors are doing very well at the moment.
It should be noted, of course, that Vmoto's distributors aren't the only ones selling Super Soco motorcycles: Super Soco itself also sells these products directly. But Super Soco is focused on China, and Chinese customers would be using Baidu, rather than Google, to search for information about the company and its products.
And the Google Trends site also shows where the search results originate. In recent months it would seem that most of the searches on 'Super Soco TS' and 'Super Soco TC' originate in European countries such as Portugal, France and Germany (particularly Germany). Of course, as was mentioned in the presentation in May, the company has been increasingly focusing on European markets. This does suggest that Vmoto is likely to be the primary beneficiary for the rising level of interest in these Super Soco bikes in the aforementioned European countries.
So, fortunately, this suggests that Charles Chen hasn't lost the plot. The above results from Google Trends indicate that the most likely reason that Charles has been buying lately is because he knows that the Vmoto distributors in Europe have been experiencing strong sales over recent weeks.
(20min delay)
