http://www.thestreet.com/story/10587084/2/good-china-stocks-undervalued.html
Two great examples of cash-rich China stocks that should have never reached their 52- week lows in March but did are Fuqi International (FUQI Quote) and China Sun Group (CSGH Quote). On March 9, someone somewhere sold shares of Fuqi International at a 52-week low of $3.31, implying a market cap of only $91 million. Based on the company's previous financials at the time, Fuqi had $58 million in cash and $48 million in inventory, mostly gold -- a total of $106 million in liquid assets alone.
At that price of $3.31, investors were selling Fuqi at a 10% discount to cash and a TTM (trailing 12 months) P/E of approximately 3. All this despite the fact that the company had more the doubled revenue two years in a row, reaching $368 million for 2008.
Also keep in mind, that on March 9, someone somewhere bought those shares of Fuqi at $3.31.
On Aug. 10 (about 100 trading days later), the stock reached a high of $30.10, a gain of 809%. On Thursday, the stock closed at $24.90, a gain of over 650% and a market cap of $690 million. Looking back with 20/20 hindsight, March obviously would have been a great time to buy Fuqi, obviously.
Two great examples of cash-rich China stocks that should have never reached their 52- week lows in March but did are Fuqi International (FUQI Quote) and China Sun Group (CSGH Quote). On March 9, someone somewhere sold shares of Fuqi International at a 52-week low of $3.31, implying a market cap of only $91 million. Based on the company's previous financials at the time, Fuqi had $58 million in cash and $48 million in inventory, mostly gold -- a total of $106 million in liquid assets alone.
At that price of $3.31, investors were selling Fuqi at a 10% discount to cash and a TTM (trailing 12 months) P/E of approximately 3. All this despite the fact that the company had more the doubled revenue two years in a row, reaching $368 million for 2008.
Also keep in mind, that on March 9, someone somewhere bought those shares of Fuqi at $3.31.
On Aug. 10 (about 100 trading days later), the stock reached a high of $30.10, a gain of 809%. On Thursday, the stock closed at $24.90, a gain of over 650% and a market cap of $690 million. Looking back with 20/20 hindsight, March obviously would have been a great time to buy Fuqi, obviously.
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