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Interested in gaining exposure to emerging markets such as China? For a closer look at some interesting stocks of companies based in China, we ran a screen.

We began by screening US-traded stocks of companies based in China for those that appear undervalued relative to earnings growth, with PEG below 1.

We then screened for strong sales trends by comparing growth in revenue to growth in inventory over the last year. We screened for stocks with positive sales trends, with faster growth in revenue than inventory over the last year. Since inventory represents the portion of goods not yet sold, faster growth in revenue than inventory is considered an encouraging sign.

To screen for strengthening liquidity, we also only focused on those companies with inventory decreasing as a percent of current assets.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall.

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Xinyuan Real Estate Co., Ltd. (XIN): Engages in residential real estate development in China. Market cap at $195.45M, most recent closing price at $2.68. PEG at 0.4. Revenue grew by 45.62% during the most recent quarter ($199.77M vs. $137.19M y/y). Inventory grew by 7.95% during the same time period ($768.65M vs. $712.05M y/y). Inventory, as a percentage of current assets, decreased from 66.23% to 56.24% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

2. China Biologic Products, Inc. (CBPO): Engages in the research, development, manufacturing, and sale of plasma-based pharmaceutical products. Market cap at $239.87M, most recent closing price at $9.37. PEG at 0.65. Revenue grew by 37.02% during the most recent quarter ($47.23M vs. $34.47M y/y). Inventory grew by 22.6% during the same time period ($70.58M vs. $57.57M y/y). Inventory, as a percentage of current assets, decreased from 42.99% to 37.76% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. RDA Microelectronics, Inc. (RDA): Designs, develops, and markets radio-frequency and mixed-signal semiconductors for cellular, broadcast, and connectivity applications. Market cap at $425.02M, most recent closing price at $10.01. PEG at 0.66. Revenue grew by 30.55% during the most recent quarter ($72M vs. $55.15M y/y). Inventory grew by -35.35% during the same time period ($29.3M vs. $45.32M y/y). Inventory, as a percentage of current assets, decreased from 25.68% to 14.49% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

4. Spreadtrum Communications Inc. (SPRD): Operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. Market cap at $895.51M, most recent closing price at $19.51. PEG at 0.45. Revenue grew by 17.54% during the most recent quarter ($161.11M vs. $137.07M y/y). Inventory grew by -44.98% during the same time period ($62.91M vs. $114.33M y/y). Inventory, as a percentage of current assets, decreased from 24.69% to 13.94% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 4 Undervalued Chinese Stocks With Strong Inventory Trends