This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Separating Winners From Losers in China

Yet for some reason, Synutra has a market cap that is $250 million greater than American Diary. Stock prices are unpredictable, and investors don't always focus on profitability.

Companies that consistently generate profits and cash their stock prices can't hide in the low digits for very long. In addition to Orient Paper, a good example is China Agritech (CAGC). With China Agritech, each quarter shows continued improvement, and any surprises are consistently positive. As a result, the share price has traded from the single digits in August last year to nearly $40 at present.

Among battery makers, consistent winner Hong Kong Highpower Technology (HPJ - Get Report) has seen its share price rise from $1.18 in August to nearly $9 at present. Similar to China BAK Battery, Hong Kong Highpower has been the beneficiary of a lot of short-term news hype, including obtaining research coverage from Rodman & Renshaw, a contract with Siemens and approval for relisting to Nasdaq.

But unlike with China BAK Battery, the gains in Hong Kong Highpower's stock price tend to not rapidly fade away but rather keep boosting the stock higher.

The next task is to figure out how much more share-price upside remains with these profitable winners. I recently visited Orient Paper in Baoding, and based on their continued capacity expansion and expansion into even higher-margin product lines, I think there is still plenty more upside.

With Hong Kong Highpower and China Agritech, both stocks have risen very far very fast and will likely continue to deliver profits, but their share prices may be fully priced at present. And again, the decision to hold the stocks is the same as the decision to buy them -- either way you end up long at the end of the day.

4 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
SBAY $0.00 0.00%
CBAK $4.60 -0.97%
HPJ $4.33 2.12%
ONP $1.85 11.00%
AAPL $130.28 0.47%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs