Ctrip.com, Melco Power Higher on Earnings

Two of our China Stock Digest stocks soared Thursday. Here's what you need to know:

Ctrip.com (CTRP)

Ctrip.com was up almost 24% for the day yesterday after announcing very strong and better than expected earnings. Well OK, the earnings were better than Wall Street expected, but given our research team in Shanghai's input… they are right in line with what I have been telling my China Stock Digest subscribers to expect. Being the only China investment newsletter with full-time staff in China is paying off once again. Our view is that CTRP, currently at $51.85 will be a $70 stock by the end of this year.

Many, if not most, of our China blue chips are extremely undervalued. Take another of our stocks which was active Thursday.

Melco Crown Entertainment (MPEL)

I have previously written extensively about how Melco is trading at a huge discount to US gaming stocks without the exposure to the same recessionary forces impacting Las Vegas. The stock jumped nearly 16% yesterday to $7.75. But don't sell yet. We have a price target of $20/share on Melco and I for one plan to collect it.

The lesson here is that China, unlike the USA, is not in a recession. It's a lesson it may take the doomsdayers a while to pick up on.

Disclosure: Long CTRP and MPEL.

Comments

[buyforeclosures]

Great Jim ...now I am screwed with Melco at $5 a share!