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China: Good long term decision

May 10, 2011 2:51 AM ETACRB, BSPM
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I am finding more Chinese stocks to be undervalued these days and it seems that it is purely volume based.  As these companies continue to grow and produce their value is trending downward as the initial push happens and then they cannot get a name out that is well known.

Take BioStar Pharmaceuticals (OTC:BSPM) for example.  Their financials look remarkable! Their stock price has done nothing but fall over the course of the last year.  Is this still fallout from reverse mergers and bad accounting? That is getting shored up as audited companies will be posting a 10Q for Q1 2011.

Asia Cabon Industries (OTC:ACRB), they have had sustained continued growth and can't get their stock price to rise since it seems very few people know to look at it or for it since it has no volume.

There lies the issue.  It seems like when a story comes out about these companies, the shoot up fast.  A spike in volume and boom, a spike in price.  And then it fades.  These trend lines seem to follow many of the U.S. stock trends through '08-'09.  While we were in a bit of economic downturn, nothing about SOME of the companies financials warranted the hemorrhaging of their stock prices. 

I think that starting to look at some of these companies and buying them now is a great strategy.  The amount of money needed to invest is low and the ROI should be 3x, 4x or more once they move.

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