So I was researching international companies to invest in and came across International Paper, symbol IP. This company is turning the corner to growth, steadily increasing cash flow, and has a great business that sells its products worldwide. It looks like with so much positive cash flow recently that they might even bring their dividend back up. My mind started wondering if there was a Chinese equivalent when I stumbled on Orient Paper.
Now Orient Paper, symbol ONP, looks incredibly cheap compared to IP, only a PE of 9 compared to IP's PE of 15, and is in a tremendous growth phase right now. ONP is well off it's 52 wk high and looks better now then it did when at it's high. They are operating at a 50% margin meaning for every ton of paper it sells they double their money! ONP revenue increased almost 70% year over year last quarter and doubled gross and net profit! Can you find any other company that is putting up growth number like these, making money, and trading at only a 9 PE? This stock is a definite buy and I am starting a position as you read this.
What do you think about the boring business of paper production? Will it get better as the economy gets better? Can you find me a better option?
Friday, February 26, 2010
Friday, February 12, 2010
China Slowing? Time to Pull Out?
So all the headlines today say China is slowing lending which will slow growth and hurt our exports to them in turn slowing our recovery as well. Let's think about this rationally for a moment. What they did was increase the mandatory reserves required by lenders by a half percent. This they hope will curtail some of the wreckless lending on the part of Banks and other financial institutions similar to what happened here in the US.
The people of China don't use much if any personal credit lines as they like to pay for everything cash. Just ask the big credit card companies who have a hard time selling their wares to the Chinese people. So this move won't affect the spending habits of consumers in China in any big way.
So the question I ask is who is borrowing this "affected" credit and what sectors are the borrowers in?
Many borrowers are for real estate, won't affect our exports much, but should help to cool the inferno of a housing market they have.
Others are large companies borrowing to secure raw materials for production of products, this affects thier exports to us which are already in decline due to our depression and should help us get raw materials cheaper to make products to export to them, seems a win win for the U.S.
So I ask you, how is this small required reserve increase bad for anyones economy? If we had done anything remotely similar a few years ago we would have not had the huge bubble in housing which has bust and left us in this depression.
Hopefully these headlines will help me get some of the Chinese stocks on sale!
The people of China don't use much if any personal credit lines as they like to pay for everything cash. Just ask the big credit card companies who have a hard time selling their wares to the Chinese people. So this move won't affect the spending habits of consumers in China in any big way.
So the question I ask is who is borrowing this "affected" credit and what sectors are the borrowers in?
Many borrowers are for real estate, won't affect our exports much, but should help to cool the inferno of a housing market they have.
Others are large companies borrowing to secure raw materials for production of products, this affects thier exports to us which are already in decline due to our depression and should help us get raw materials cheaper to make products to export to them, seems a win win for the U.S.
So I ask you, how is this small required reserve increase bad for anyones economy? If we had done anything remotely similar a few years ago we would have not had the huge bubble in housing which has bust and left us in this depression.
Hopefully these headlines will help me get some of the Chinese stocks on sale!
Thursday, February 11, 2010
What I am Researching
Well it's been a long time since my last post, but I am still looking in the same place for stocks to buy, China. Here's is a list of what I am currently researching:
Guangshen Railway Co. symbol GSH
Income and balance sheet look good and if Buffett thinks rails will do well in the US I can only imagine how well the rails in China will do! Chinese imports are skyrocketing as they start to use the trade surplus they have accumulated to help increase the incomes of it's people. All these imports will need the infrastructure of the rails to move these from the ports to the people and GSH will be a major beneficiary. How about an almost 3% yield to collect while you watch this rail roll?
American DairyInc. symbol ADY
This stock quadrupled for me, I took profits, no longer have a position, and now that it has retreated by about 45% I am gaining interest in building a position again. ADY is the premier Milk product company, especially for infants, in China and was not in any way involved with the tainted milk scare that happened in 2008. Looking to start a position around the $20 level.
Guangshen Railway Co. symbol GSH
Income and balance sheet look good and if Buffett thinks rails will do well in the US I can only imagine how well the rails in China will do! Chinese imports are skyrocketing as they start to use the trade surplus they have accumulated to help increase the incomes of it's people. All these imports will need the infrastructure of the rails to move these from the ports to the people and GSH will be a major beneficiary. How about an almost 3% yield to collect while you watch this rail roll?
American DairyInc. symbol ADY
This stock quadrupled for me, I took profits, no longer have a position, and now that it has retreated by about 45% I am gaining interest in building a position again. ADY is the premier Milk product company, especially for infants, in China and was not in any way involved with the tainted milk scare that happened in 2008. Looking to start a position around the $20 level.
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