Chinese brokerage firm Noah Holdings (NOAH) has proven it can weather even the wickedest storms, and I will re-purchase the stock in the Growth Portfolio and Aggressive Growth Portfolio today.
Last night NOAH announced profits of $0.41 vs $0.34 a year ago, for 21% profit growth. That makes it $1.60 in profits the prior four qtrs for the company.
NOAH stock closed at $30 yesterday, then fell slightly at the open today, and now risen $31.50, up $2 on the day. More importantly the stock is breaking out.
Noah Holdings is a small company, thus has little analyst coverage. There’s no qtrly estimates, but we do have annual estimates of $1.65 for 2015 and $2.01 for 2016. These will likely change in the coming week, but as of now the company sells for just 16x next years earnings.
My Fair Value on NOAH is $40 which is 20x 2016 estimates. That gives the stock ample upside.
I had owned NOAH in the past buying at $16 on May 14, 2013 and selling at $25 on July 9, 2015 during the Chinese stock market crash. My thought was brokers would be hit hard from the stock market downturn, but obviously Noah has weathered the storm, and for now there are clear skies ahead.
To create cash for the purchase I will sell Walgreens (WBA) from the Aggressive Growth Portfolio. WBA has lost some momentum as of late. Still, I will continue to hold WBA in the Growth Portfolio as it has long-term appeal.
