| Stock (Symbol) | Stock Price | |
BitAuto (BITA) |
$15 |
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| Data is as of | Expected to Report | Sector |
August 19, 2013 |
11/5 – 11/8 |
Technology |
| Sharek’s Take | ||
 China is coming out of a Bear Market, and now the top Chinese stocks are starting to take flight. The best stocks from a fundamental standpoint are Internet stocks — these possess the best sales and profit growth (and low labor costs, and ability to expand exponentially). Chinese Internet stocks are the hottest stocks in the market today.One under-the-radar stock I will add to the Growth Portfolio and Aggressive Growth Portfolio today is BitAuto (BITA). The company operates bitauto.com, a provider of Internet content for China’s Automotive industry. If you’re in the auto industry in China, and want to market yourself, you do it on Bbitauto.com and ucar.cn (another BitAuto site). The company grew sales 59% last year and is expected to grow sales an additional 35% this year. Profit growth is rapid as well — this stock fits the mold. |
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| One-Year Chart | ||
 BITA got the attention of big money investors when it beat the street August 8th. The stock spiked on HUGE volume with the new investments, and has since come down off its highs (I’m sure big money wants a price drop to buy more). BITA is currently trading at $15, up more than $2 today. Something is going on here. We need to get invested. |
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| Earnings Table | ||
 BITA popped after reporting profit growth of 118% last quarter, on a 41% increase in sales.The company beat estimates by a solid 4 cents per share last quarter, a nice jump from the penny beat a quarter earlier.Annual Profit Estimates also increased.There’s only two quarters of quarterly estimates available, but both of these show solid results should continue. This earnings table shows BITA fits-the-mold in every way. There’s not a bit of red (negative news) here. |
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| Fair Value | ||
 What’s nice is BITA is undervalued too. The stock’s selling for only 16 times earnings. I feel this is due to the stock’s under-the-radar stance and the fact China was in a bear market (which holds back leading stocks). This $15 stock is worth $20, but could shoot straight to $24, which would be around 25 times earnings. |
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| Ten-Year Chart | ||
 BitAuto came public in November 2010, and was a bad stock to own until around a year ago. During the downturn, sales and profits were still rising, but growth accelerated after 2012 Q2. Nice trend of growing profits every year, at solid rates. This stock deserves to be over $20 per share. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
6 of 24 |
BitAuto fits-the-mold, is undervalued, and has what it takes to make a big move higher. Still, this is a small Chinese stock which carries risk, and investors should be on the safer side and not make a big bet on this stock. BITA has some big money investors taking a position. We need to get in today. BITA is ranked 6th of 24 positions in the Growth Portfolio Power Rankings. I will sell Express Scripts (ESRX) and JP Morgan (JPM) and buy BITA in the Aggressive Growth Portfolio where it will rank 5th of 13 positions. |
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Aggressive Growth Portfolio
5 of 13 |
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