This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

China Stocks: Price vs. Fundamentals

Stocks in this article: CWS BSPM DYP

Along with Orient Paper (ONP), my favorite price vs. fundamentals play is Duoyuan Printing (DYP). DYP traded down to an almost absurd level of $7.84 when the market had its mini meltdown. But similar to China Wind Systems, DYP announced results that significantly beat expectations on a day when the market was rebounding, in a rally fueled by European stimulus money. As a result the stock leaped by over 25% in 2 days to as high as $9.74 on significant volume. I was gobbling up shares below $8 while I could and continued buying up into the $8-9 range.

Despite the rapid jump in the share price I didn't sell a single share for two reasons. First, I think the stock has room to run by about another 50%. Second, the fundamentals are so strong that even if it trades down I don't lose any sleep over it. This is my safety stock. DYP has a market cap of $280 million, but has $140 million in cash and receivables on its balance sheet. Cash flow from operations in the first quarter alone was nearly $20 million. The company beat revenue guidance by a wide margin and continues to enjoy gross margins of more than 50%. Revenues grew by 34% vs. last year. In terms of valuation, in the $9-$10 range, the company trades at less than eight times earnings, despite being a NYSE listed stock with huge growth and margins. In the past I have compared this for valuation purposes to Duoyuan Global Water (DGW) which has slightly less attractive fundamentals and yet trades on 3-4 times the earnings multiple. DGW and DYP are both run by the same chairman and have similar fundamentals and I feel that the valuation discrepancy makes DYP an easy choice at current levels.

Biostar Pharmaceuticals (BSPM) has turned out to be a case of snatching defeat from the jaws of victory. I correctly picked this one out at just under $4 and noted that the $4 threshold share price was the only thing holding BSPM back from its uplisting. Sure enough, seven trading days after reaching $4, the stock uplisted and shot as high as $5.50 - a 38% run in a few days. What followed was a perfect storm of negative events.

2 of 4

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.66 +9.43 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs