Short sellers have found a real sweet spot in the China sector, and have some up with a winning formula that takes advantage of unusual circumstances. The remedy for this is the passage of time.
(Vocus/PRWEB) February 09, 2011
Larry Isen, Chief Editor of Emerging China Stocks, has identified Longwei Petroleum (LPH), China MediaExpress (CCME), Gulf Resources (GFRE), and China Biotics (CHBT) as traders' best buy candidates among Chinese names.
"Short sellers have found a real sweet spot in the China sector, and have some up with a winning formula that takes advantage of unusual circumstances....The success of these Cyber Smears has cast a giant black cloud over the entire sector, and between the macro picture in China and the fear climate in the US, we find ourselves in a nasty corrective phase for the sector as a whole....The remedy for this is the passage of time." says Isen in the most recent edition of Emerging China Stocks.
The recent wave of doubts about the reported numbers from Chinese companies has focuses less on the companies themselves, and more on the auditors. As a result, the auditors have stepped up their efforts considerably, and are believed to be doing things with much more precisions and thoroughness. The end result is likely to be, for 2011 and beyond, the most accurate and reliable results Chinese companies have ever reported. Isen ultimately feels that is what will be needed to put China's U.S.-listed stocks back in American investors' good graces.
Isen adds about China MediaExpress "According to the SEC filings, CCME has achieved $155 million in revs through the first 9 months of 2010. The company has netted $68.53 million in profits, and has $170 million ($4.85 per share) in cash. No debt, and $1.86 in EPS...The Global Hunter analyst has CCME delivering $213 million in revs for 2010, with net profits of $106 million, or $2.88 EPS. $190 million is the estimate for cash at the end of CY'10...Looking at these numbers, is there any question why Forbes calls this company the 'Best Small To Mid Cap' growth company in China?"
Longwei Petroleum is viewed as a winner if fuel costs rise in 2011, which could enhance its profit margins. The company has a June year end, so investors have only seen the FYQ1 at the end of September. Q2 numbers should come out soon, and Longwei is on track to deliver well in excess of $1/2 billion in revs this fiscal year, and could deliver in the range of $60 million plus in real profits (though this number could be distorted by the continued existence of outstanding warrants).
Investors seeking more information about these opinions on the afore-mentioned stocks, along with buy/sell recommendations other Chinese equities, can visit the ECS web site located at: http://www.emergingchinastocks.com for more information.
About Emerging China Stocks
Larry Isen's Emerging China Stocks ("ECS") is an online premium subscription service offering aggressive growth investors timely investment ideas focused on emerging China. ECS's main mission is to present investors with the best small cap growth stocks in China that trade with U.S. listings.
ECS provides monthly, weekly and flash alert e-newsletters as a guide to help investors profit substantially from small cap growth stocks in China. Its advisory services provide timely economic and market news informing investors of what's going on in China today and what it means for their Chinese investments. Members of ECS also receive password protected access to an exclusive Member's only section for 24/7 access to specific stock recommendations, portfolio performance, report archives and much more.
Larry Isen's Emerging China Stocks is a complete look at profiting from the world's largest and fastest growing emerging market, China. Investors are encouraged to visit Emerging China Stocks by going to: http://www.emergingchinastocks.com for more information on its advisory services and how to become a Member.
Disclosure: Larry Isen and Emerging China Stocks consultant Tom Xu owns shares in China MediaExpress, China Biotics, Gulf Resources, and Longwei Petroleum.
Emerging China Stocks
Source: Emerging China Stocks