Chinese growth is something of a phenomenon and although a
market like that can be volatile, and therefore risky, the
opportunities for a risk tolerant investor are attractive.
There are many Chinese stocks available on U.S. exchanges and
their fundamental and technical performance can be evaluated
like a traditional stock from North America or Europe.
Assuming that the global economy is not going to sink back
into a double-dip recession emerging market investments, like
those listed below, are likely to outperform the major stock
indexes by a wide margin.
We have listed the criteria we used to develop the search for
these stocks below. You can also run the search yourself at
. Try to modify the criteria yourself to meet your specific
In this case we've obviously limited the country on the stock
Optionable and Shortable:
We use this criteria to filter out stocks that have liquidity
problems and may be expensive to trade. It is usually safe to
assume that if the stock has listed options and is easy
enough to borrow that it can be shorted that there will be
enough liquidity to accommodate most tradings strategies.
Return on Equity:
Looking for a stock with a positive return on equity (ROE)
metric finds companies making a profit, and it summarizes a
lot of key fundamental data into one easy to use score. If we
were to deconstruct ROE you would see that it includes most
of the important information from the income statement and
Price/Free Cash Flow:
We're using this fundamental to find stocks with a low price
compared to their free cash flow. Finding companies
with strong cash flow can help reduce our risk because it
will be easier for the firm to fund growth in the near term.
Guangshen Railway Co. (
Breaking out above resistance, this stock could hit
over $20/share again soon.
China Life Insurance (
Currently breaking above resistance with a minimum upside
target of $69 per share.
China Southern Airlines (
Breaking out on a stronger Yuan, this stock is set to
China Education Alliance (
Breaking above resistance and off a double bottom
Fushi Copperwled (
Lots of volume on the recent rally. The current
breakout could bring the stock back to that upper level of
resistance around $12-13 per share.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.