Dump The Psychologist and Buy China Stocks

China's Economy Has AOB, EJ, ASIA and EDU Pumped

0 Comment(s) - Post a Comment

# / Rating : 0 / 0.00 - 1 : 2 : 3 : 4 : 5

Wednesday July 1, 2009 9:30 AM PDT

By Karen Riccio

If the following statistics don’t convince you that China has risen again, you better take a visit to a psychologist.

•    So far in 2009, the MSCI China Index is up 30%.
•    May retail sales rose 15.2% vs. a year ago after April's 14.8% gain.
•    May's industrial output rose 8.9% on top of April's 7.3% increase.
•    Chinese investment in urban areas for assets like roads and apartments rose 40% in May versus a year ago.

And you might want to keep the good doctor around if you don’t have China or China-related stocks in your portfolio. Here are a few that trade on the NASDAQ or NYSE and cover a wide range of industries.

Rather than track $22 billion Celgene (NASDAQ: CELG), why not follow American Oriental Bioengineering (NYSE: AOB), a $500 million maker of traditional medicines in China? At $5.29, this stock seems heavily discounted. It's no secret that China is a massive market, and this company should be well positioned for growth.

As China continues to grow, rising incomes will allow more Chinese people to be able to afford AOB's products.

E-House (NYSE: EJ)
is the largest Chinese property agent. It is the Chinese version of Century 21. However, the firm faces very different housing market dynamics in China.

Chinese consumers tend to borrow considerably less than Americans or Europeans to finance home purchases, with down payments averaging about 40%. As a result of this lower leverage, China experienced a less severe drop in property prices.

Although buyers paused in 2007 after the government took measures to curb the rapid rise in real estate prices, the recent reversal of those policies has boosted the housing market.

The firm has a strong market position, doesn't carry inventory like developers, and has a healthy balance sheet with no debt.

Asia Info Holdings (NASDAQ: ASIA)
is a telecom company that provides billing software to major carriers. China's plan to adopt 3G, a much faster wireless protocol, was approved by the government in late 2008. Implementation cost is expected to top an eye-opening $60 billion.

On top of that, the government created a new wireless competitor by merging the wireless units of the two dominant fixed line operators in China, curbing China Mobile's wireless monopoly.

Asia Info Holdings stands to benefit as their billing becomes increasingly necessary as data services expand.

New Oriental Education (NYSE: EDU) provides foreign-language training and college test preparation courses. Education is highly prized in China, and the huge gap in wages between the educated and uneducated is leading families to invest heavily in their child's studies.

As the dominant player in providing early English education for children, New Oriental is a household name in China. The company has demonstrated success in helping students prepare for the Gao Kao college entrance exam, similar to the ACT or SAT here in the United States.

Finally, Longtop Financial (NYSE: LFT) is a great way to invest in the development of the financial sector in China. The company develops software to help banks run their business. This stock will allow you to ride the wave of financial sector growth yet avoid some of the risks inherent in China's government-influenced banking sector.

The company reported great quarterly results this past week, exceeding expectations with an equally strong outlook.

Bottom line: Dump the psychologist and buy China.


 


Post a Comment
 

Title of the comment

Content of the comment

 
Bookmark and Share
 
Welcome! 
 

Interact and communicate with other savvy investors. Publish your own research and analysis, comment and rate other member articles of interest.

Discover and share the next big hidden gems!

Join Today! Creating a free account is simple and easy. Just go to the menu bar at the very top of this page and select "Join".

 
Why Become a Member? 
 
  • Connect, share and prosper from insightful analysis by experienced investors and traders.
  • Communicate, collaborate and exchange ideas on stocks and other market related topics.
  • Promote your knowledge and expertise and gain access to valuable SEO tools and functions.
  • Learn from investors and traders who have successfully navigated the markets for years.
  • Identify stocks and other investment ideas you never would have found elsewhere.
 
Whitelist Us 
 

Having Trouble Getting Our Email Newsletter?  Whitelist Us.

Click here for more info...

Wednesday October 28, 2009 4:35 PM GMT
If you’re a fan of trading the SPDR S&P 500 Fund (NYSE:SPY), or any index vehicle for that matter, you may want to put your bearish hat on. It’s no secret that the market’s been sinking for the last few days - we’ve seen plenty of ebb and flow since March. What traders may not [...]
Monday March 30, 2009 2:50 PM GMT
Wow. It’s not too often stocks lose a collective 3% within the first 5 minutes of trading. I suspected we were due for a nasty pullback (the kind of dip I forecasted on Thursday), and sure enough, here it is. The S&P 500 has now given up 4.8% from Thursday’s high. Is this enough to [...]
Thursday March 26, 2009 5:53 PM GMT
I hate to be a wet blanket here, but since nobody else seems willing to do it, I’ll put the task on my shoulders. So, here goes - despite the 22% bounce since March 9th, it’s not like the market is out of the woods yet. We still have some barriers to break through before [...]
Tuesday March 24, 2009 6:11 PM GMT
Yesterday’s gain was touted as being the best gain of the year. Fine, but that’s no big deal. The sellers have been relentless most of the year, so it wouldn’t necessarily be a great feat to be the biggest gain of the year (less than three months) so far. What I’m kind of baffled about [...]
 
SCN Newsletters 
 
Friday November 20, 2009 8:46 AM PST
Since we didn't have any new trades last week, we definitely want to add a couple this week to refill some of the ones we carved out a couple of weeks ago. As usual, we've got one bullish pick, and one bearish pick. Advance Auto Parts Inc. (AAP) - Bullish Surprised? Don't be. Advance Auto Parts Inc...
Friday November 13, 2009 9:15 AM PST
Assuming today's trading is uneventful and we don't make an unexpected move within the next few hours, we're probably going to end the session a little higher than Thursday's closing levels. And, that'll mean a decent 2.0% gain for the week. The situation is not nearly as bearish as the numbers would...
Friday November 6, 2009 9:43 AM PST
Though stocks slipped back into the red pretty quickly this morning after disappointing employment news was digested, the market should end the day with a decent gain for the week. I still have my doubts about this week's rally though. The buying volume was never all that strong, and we're still overbought...

This community is currently in beta and is constantly undergoing active development.  Please be patient as we strive to bring you a usable, full-featured community that you will enjoy.  If you should have any questions, problems, suggestions, feature requests, rants, and/or raves, please do not hesitate to let us know by writing us as : webmaster@smallcapnetwork.com.