For the record, I prefer stocks with low P/E's (they MUST have positive earnings), low debt, reasonable profit margin, in a good industry with room for growth, with various other criteria depending on the industry (for example, if the company is in a competitive industry, I want to see them turning inventory fast).
My current holdings (in no particular order):
1. AMERICAN ORIENTAL BIOENGINEERING INC (AOB): Chinese pharma.
2. CHINA DIGITAL COMMUNICATIONS GROUP (CMTP): Lithium battery manufacturer. One of my personal favorite stocks which has already made me a lot of money.
3. CHINA SUN GROUP HIGH TECH COMPANY (CSGH): Another battery manufacturer. I am waiting for them to dip so I can buy more, but they never dip enough for me to do it.
4. CHINA INSONLINE CORP (CHIO): Online insurance sales. Trading in a tight range at the moment (between 90 cents and $1.10). Still cheap for the price. When it breaks out, it should break out big.
5. CHINA INFORMATION SECURITY TECHNOLOGY INC (CPBY): Security software development. As the Chinese Internet grows, they can only get richer. Considering they already have government contracts, this is a "money in the bank" stock.
6. CHINA YONGXIN PHARMACEUTICALS INC (CYXN): Chinese pharma.
Now for some other stocks reviews (again in no particular order):
1. China Clean Energy Inc (CCGY): A cash bleeder. I'm not sure there's enough there to allow them to grow, aside from an intriguing business plan. Unfortunately, I'm sure biodiesel is being researched by every oil company on the planet, since adding biodiesel to their current oil reserves is a no-brainer.
2. Puda Coal Inc (PUDZ): If you are looking for coal exposure in the Chinese market, this is a good stock for you. Personally, I am not fond of the coal market. Even so-called "clean" coal is worthless, since the energy output is vastly reduced. In other words, you have to burn more clean coal to get the same energy output you would get from regular coal, which means the clean aspect is negated. This means the future for the coal industry is limited, at best.
3. Telestone Technologies Corp (TSTC): Wireless communications equipment manufacturer. Sounds good, right? Unfortunately, they are only turning inventory a little over 2X, which is low for both the industry (20X) and the sector (13X). While they have little debt and a low P/E, they have to get more efficient in managing their business before I get interested.
4. Perfectenergy Intl Ltd (PFGY): Dead company walking. This company is bleeding cash BAD! Sure they have no debt, but they will need some soon at the rate they are going. SELL!
5. China Growth Development Inc (CGDI): A fascinating little stock. Through one subsidiary, they sell sun care products in Florida. Through another subsidiary, they build and operate commercial real estate in China. A strange combination admittedly, but they make it work. The numbers (from Vanguard):
Current ratio: 0.83 (a little light)
Long-term debt to equity: 0
Total debt to equity: 0.16 (outstanding)
ROE: 6.37 (could be better)
Sales vs. 1 year ago quarter: 11.93% higher (good sign)
Price to book: 0.50 (say WHAT?! Amazingly low)
Net profit margin: 17.57% (sweet!)
Although I am not a fan of real estate exposure, commercial real estate would have to drop in China by half for this stock to be reasonably valued. For a 40 cent stock, this one is hugely undervalued. While growth potential is limited, it is definitely a "buy" at this price.
6. China Med Technologies Inc (CMED): This company specializes in in vitro technology. On the plus side, they make a lot of money, and they are growing (sales vs. 1 year ago have increased 92%). On the downside, they lose money overall because of their high debt (54% higher than their assets). If they could get their debt situation cleaned up, this could be a great stock to own. If heavy debt loads don't concern you, this is a solid "buy". But count me out.
7. Jiangbo Pharmaceuticals Inc (JGBO): My jaw hit the floor when I saw the financials on this one. This is the kind of stock where you ask, "Where have you been all my life?" Check out these numbers (from Vanguard):
Current ratio: 4.12
Long-term debt to equity: 0.04
Total debt to equity: 0.10
ROE: 38.03 (over twice the ROE for the industry)
Sales vs. 1 year ago quarter: -8.45% (this stock's only downside)
EPS vs. 1 year ago quarter: 4,783.83% (translation: This company has improved their efficiency significantly)
Price to book: 0.99 (in other words, if they liquidated tomorrow, they would still be worth more than their current stock price)
Net profit margin: 24.36% (almost twice the margin for the industry)
Be still my beating heart! I think I am in financial lust.