Numbers: Third-quarter profit soared 82% to $9.4 million, or 58 cents a share, as revenue declined 1.9% to $44 million. Jinpan's operating margin extended from 16% to 22%. Its balance sheet houses $38 million of cash and $26 million of debt.
Stock: Jinpan has quadrupled in the past 12 months, outperforming major indices. The stock sells for a price-to-projected-earnings ratio of 14, a 27% discount to the peer-group average. The shares are also cheap based on book value and cash flow.
Catalyst: China's $586 billion stimulus has another year of payouts and about 38% is allocated to infrastructure development. Jinpan received an Underwriters Laboratories, or UL, certification in 2009 and is now exporting to developed economies.Consensus: Only two analysts cover Jinpan, but both advocate buying the shares. Roth Capital expects the stock to appreciate 20% to $29. It has gained 39%, on average, during the past three years, landing in the top 4% of stocks we cover.