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Six Stocks for Trading the Chinese Economy
11/17/2010 12:01 am EST
Looking to take advantage of one of the fastest growing marketplaces in the world? Then be sure to keep these six Chinese stocks on your radar.
Let’s take a look at some of our favorites from the automotive, energy, and Internet sectors.
A-Power Energy Generation Systems, Ltd. (APWR) provides power and micro grids for industrial companies in China and Southeast Asia. They are a leading manufacturer of wind turbines. A-Power acquired Evatech, a company that specializes in thin-filmed solar power, at the end of last year.
APWR will hold its annual general meeting today, Wednesday, November 17. A-Power will be announcing earnings on December 2 before the markets open. Consensus estimates are at $0.29 per share. Prices are currently trading below the 20-, 50-, and 200-day moving average lines. Shares hit a 52-week low near $5.75 late in August.
Baidu, Inc. (BIDU) is a Chinese-language Internet search provider. They have 72.9% of the Internet search market in China. Baidu’s shares are trading near a 52-week high, and the company was recently upgraded by three analysts who pegged a price target as high as $130. CEO Robin Li said in a recent interview that the company, “Is focused on the future: Expanding into games, e-commerce, and online payments, establishing a Hulu-like video site called Qiyi, and exporting the Baidu brand abroad.” Baidu’s stock has been responding, up over 175% year to date.
Shares of BIDU are trading slightly above the 20-day moving average ($108.18), and 50-day MA ($100.86).
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China Automotive Systems, Inc., (CAAS) through its subsidiary, Great Genesis Holdings Limited, manufactures power steering systems and automobile products that it sells to manufacturers in both China and the United States. CAAS recently reported a $500,000 non-cash gain on a derivative valuation compared with a $3.1 million gain for the same period last year. The stock fell 6% last week regardless of the fact that they beat analysts’ expectations by $0.02 per share.
CAAS shares have remained within a relatively small trading range over the last few months. Keep an eye on support near $14 and resistance at $18.
Focus Media Holding Limited (FMCN) sells out-of-home television advertising time slots on its network of flat-panel television advertising displays. Screens are located in high-traffic areas such as commercial locations and in-store networks. Focus Media has increased about 24% since early September. Credit Suisse maintains an “Outperform” rating on Focus Media Holding Limited, and raised their price target from $24 to $29. Focus Media will announce their earnings December 6 after the bell, with the consensus estimate currently at $0.33 per share.
Shares of FMCN recently violated the 20-day MA support line ($24.83) and looks poised to test the 50-day moving average near $23.41. Also, be sure to keep an eye on long-term support near the 200-day MA ($19.10).
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SINA Corporation (SINA) is an online media company and mobile information service provider in the China. On Thursday, SINA announced a plan to collaborate with MSN China on social networking, blogs, and instant messaging services to users of both companies. SINA is scheduled to announce earnings on November 16 after the close, and analysts are looking for $0.43 per share.
SINA is trading slightly off its recent 52-week high ($63.52), and shares remain above the short-term 20-day MA support line ($57.22).
Sohu.com Inc. (SOHU) is an Internet company providing Chinese news, information, entertainment, and communication products. SOHU's main business consists of advertising, online gaming, and wireless services. Sohu.com was downgraded last Tuesday by analysts at UBS, cutting their outlook to “Neutral” from “Buy.”
SOHU is trading well above its 20- and 50-day MA support lines. The stock has doubled in less than six months after hitting a low near $40 in July.
By Josh Golebieski, contributor, PortfolioTilt.com
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