By Gareth Soloway on June 10th, 2010 1:38pm Eastern Time
Some smaller Chinese stocks are trading at price-to-earnings ratios that put them in line for a "best buy" in my opinion. The drop in the market has made retail investors run from thinly traded small cap companies. As liquidity vanishes, small caps take the biggest hit. The fear of a major Chinese meltdown which has not and most likely will not develop in the near future has hit small cap China stocks even harder. At this time, there are some stocks that look like they could be big time movers in excess of 25-50% over the next few months.
China Armco Metals, Inc. (AMEX: CNAM) is a profitable metal play in China that is growing revenue at a 50% plus clip year-over-year. The stock was recently as high as $11.10 on March 4th, 2010. It is currently trading at $3.64. At this current price point, this stock is in my best buy category. I currently own some.
China Security & Surveillance Tech. Inc. (NYSE:CSR) is another beaten down Chinese play. It is currently trading at a price to earnings ratio of 4. These profitable China plays are trading at depression levels and China is still growing around a 10% rate. The fear of a major bubble popping in China is somewhat factored in.
NIVS IntelliMedia Technology Group, Inc (AMEX:NIV) is another one that has lost 50% of its value in the last couple months. This stock has had amazing growth and looks to continue to expand and grow. Profitability is not even a question here. It is trading just over $2.00 per share after being as high as $4.38 a couple months ago. The company should easily make $.50 - $.75 for 2010 putting them on pace to have a price to earnings ratio of 3-4. The company expects growth of 20-30% for 2010.
This list could go on and on. As a value small cap swing trader, I am very interested in these and other Chinese stocks trading at reduced levels. Any stock that has great growth and is trading at a P/E of 3-5 must be looked at closely. I will most likely be buying more Chinese small caps over the next few weeks at these levels. To get these entries, guidance and education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
Comments