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!

5 Highest-Rated China Stocks

The shares have been on quite a run, up nearly 250% over the past year. Current valuations at first do look a bit lofty, as a middle-of-the-pack valuation score insists. At a trailing P/E of 50 and a forward P/E of 27, if the stock can continue growing at the nearly 37% compounded rate of the past three years, it could still be a good investment. Our model rates the stock a "buy" with an $83 price target.

Shanda Interactive (SNDA), a gaming stock, has suffered slowing earnings per share growth over the past two years. Still, earnings in the most recent quarter beat analysts' estimates. The stock has a low growth score (3.73 out of 10), driven mainly by depressed earnings over the past year, yet the market anticipates a 27% improvement in earnings through 2012.

Optimism is based on expectations for a strong product pipeline for 2011, which may diversify some of the revenue streams. The company also looks great from a solvency standpoint, with net cash on the balance sheet of nearly $1 billion (or $18/share). Our model rates the stock a "buy" with a $49 price target.

Baidu (BIDU) is probably the most recognized Chinese company. It's the leading online search engine in China and our fifth-highest "buy"-rated Chinese ADR. The stock has a $179 price target.

Baidu scores highest on performance (the stock is up 128% over the past year), efficiency (it has generated more income per dollar of capital than 90% of the companies we review) and solvency (very little debt, over $1 billion in cash).

Our model shows some hesitation based on the valuation of the stock. It currently trades at 90 times trailing 12-month earnings, and at 37 forward. If the company can continue to increase earnings at the three-year rate of 80%, the stock looks inexpensive at these levels.

Equity research manager Chris Stuart, CFA, joined TheStreet Ratings after working as a senior investment analyst with Merrill Lynch covering small-cap equity and alternative investment strategies. Prior to that, Stuart worked for One Beacon Insurance as an actuarial analyst and at H&R Block as a financial adviser.

Stuart earned his bachelor�s degree in finance from the University of Massachusetts, Amherst. He holds a Chartered Financial Analyst (CFA) designation and is a member of the Boston Security Analysts Society (BSAS) and the CFA Institute.

2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
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 17,107.15 +20.52 0.12%
S&P 500 1,990.22 +3.21 0.16%
NASDAQ 4,479.9910 +6.2940 0.14%

Brokerage Partners

Rates from Bankrate.com

  • 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