China Stocks for the Holidays, Part 2

This is the second part of my series on China stock picks for next year. (Here's part 1.)

My goal with this series is to identify companies worth following that I haven't mentioned yet.

OK, first up is Worldwide Energy and Manufacturing USA(WEMU.OB). When I met Jimmy Wang from Worldwide Energy and Manufacturing USA, I could sense the overwhelming optimism that got him into trouble earlier in the year. Their backlog last I checked is being serviced and it was larger than their price per share. Things are shaping up for a fourth quarter that makes you wonder why you didn't own this now.

I figure margins will improve, but not to where they were as demand picks up again. Did I mention uplisting? It's inevitable in my opinion starting now. Rumors suggested that $5 was when they were going to get taken "seriously." Taking a look at their forward guidance and their ability to make guidance in the past, I'd usually grin and move on. In this case, I would advise taking a second look, and a third.

In fact, RedChip gave a third quarter visibility update on Worldwide Energy and raised the target price to $8 as the company reiterated top-line guidance of $60 million. My opinion is that the comparable companies in the solar industry are significantly more expensive at this point. Eight dollars still doesn't appear high enough if the company's estimates going forward are accurate. See the full report here.