There is no question that China has a bright economic future.
China remains the fastest growing economy on Earth despite its
#-ad_banner-#Remember, just like the stock market, economies
never travel at the same velocity in a straight line higher.
There are always aggressive periods of growth and slow periods.
Long-term investors can use the negativity surrounding the
weaker-than-expected economic numbers to find bargains in this
One of my favorite sectors to profit from the Chinese economic
growth story is telecommunications, specifically the mobile phone
market. A recent study published by Business Insider revealed
that smartphones are the fastest growing segment and will soon
overtake feature phones in the nation.
The Chinese smartphone boom has helped a variety of companies
prosper. One of my current favorites is
Sky-mobi Limited (NASDAQ:
. The company operates as a mobile application store that
provides a platform to purchase smartphone applications, games,
music, books and other media. It also provides a mobile social
media network named Maopao Community. MOBI is well imbedded in
the space and has contracts with 106 smartphone handset companies
and 1,170 feature phone makers.
Boasting a market cap of around $200 million and over 110
million users on the Maopao smartphone platform, MOBI is a major
player in the Chinese mobile market. It is currently adding over
380,000 new users every day.
The company recently posted fiscal third-quarter results for
the period ending Dec. 31, which showed a decrease in total
revenue but a 65.8% revenue increase from the smartphone segment
quarter over quarter. Smartphone revenue accounted for over 56%
of total revenue in the quarter.
The company turned a profit of $0.8 million in fiscal Q3, a
substantial improvement over the prior quarter's loss.
CEO Michael Tao Song said the stronger-than-expected growth in
the smartphone business helped to drive the quarter's financial
and operational turnaround, which saw over 763 million user
visits and over 128 million downloads.
He said, "This dramatic shift has occurred within only six
months since we began the monetization of our smartphone
business... With this strong performance and growth momentum, we
are confident that our strategies are working and our
capabilities are strengthening as we aim to further monetize our
Maopao smartphone platform."
Investors reacted very positively to the third quarter's
results, sending shares soaring over 30% this week to a new high
above $7, and I think this breakout momentum should continue.
Action to Take -->
-- Buy MOBI at the market price
-- Set stop-loss at $5.26
-- Set initial price target at $9.14 for a potential 27% gain in
This article originally appeared on ProfitableTrading.com:
This $7 Stock's Massive Breakout Could Result
In A 27% Rally
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