Editor's note: This is the third article in a series on investing in China. The previous columns were China Investing: Like a Kid in a Toy Store and How (Not) to Invest in China.
Since June I've really been strapping myself into the Chinese uplisting rocket that appears to be taking a one-way trip. The direction? Up.
Uplisting's a required step to becoming available to more investors. What's hitting the ground running? I'll tell you.
recently has been beaten down from $5 in 2006 to 16 cents in the latest market crisis. That's down 95% in price on improving business fundamentals!
Puda Coal is reverse-splitting 1 for 7 and reincorporating in Delaware in an effort to uplist and gain the attention of some investors that will take it as seriously as I do. Now the shares are trading at 47 cents, which is ridiculously undervalued. Further note that the steel industry is taking off in China.
While I'm on that topic, take a look at
General Steel Holdings
(GSI - Get Report)
China Precision Steel
I hate talking about stocks that "popped" already, but the pop from
Sino Clean Energy
yesterday is more like pulling the choke on a chainsaw than pulling the plug on your vacuum cleaner. It's looking to reverse-split to uplist sometime in the next 180 days. Did I mention that it increased capacity by 250% and has a price-to-earnings ratio of around 8? This stock should rocket, especially because the company can increase capacity without expanding by another 185%.
, which just hopped onto the
, also works in the steel industry where its business is focused on protecting the environment.
China North East Petroleum
started trading on the American Stock Exchange last month and proceeded to fall more than 30%. Ouch! Its P/E is less than 5 and it has an organic growth of around more than 20%.
A stock I mentioned last week,
, joined the uplisting train by reverse-splitting 10 for 1 over the weekend and grabbed a new ticker symbol, changing from CHID to CMTP virtually overnight. Even though it's up 50%, it's still cheap. How many stocks do you own can you say that about?
For me, it's not a question of how fast, because I'm confident that over time, the speed at which these companies appreciate in price is going to be relatively faster than any index you could compare them with. The question is how high. I don't see these being the next
with five-digit percentage returns, but you won't see me complaining about 3% to 4% returns anytime soon. My current long-term picture is mostly dominated by four-digit percent return opportunities.