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Profit from Wireless Technology in China Editor’s Note: Our newest contributor, Wayne Mulligan, is back to give us his take on what to buy in China these days. As you might of read in last week’s article, Wayne is big on China. And today, he is combining his knowledge of technology stocks and insight into the Chinese market. Enjoy… What to Buy in China
Now I tried to stay away from this question when writing my original article. If you don’t have the time to really study this sector, then you’re better off finding one of the ETFs that tracks China’s markets and investing directly into those instead. But I can understand that some people out there do, in fact, have the time to study individual equities in this sector and just need a push in the right direction. So for today’s article, I’m going to discuss one stock that has served me well for a long time and that I think will continue to outperform the market over the long haul. But before I get into that, here are a couple of those China ETFs I was talking about. They’re definitely worth looking into if you want some exposure to China but don’t have the time to dig too deeply into the Middle Kingdom:
Both funds have been down this year, along with the equities markets in China, but as I said, this is for those who have a LONG TERM belief in this market and are looking to position themselves for the long term. ************Special Offer************ A Guest Pass to the Millionaire’s Market You now have less than a week left to get into the millionaire’s market. This is the market where some investors pay $5.8 million just to get in. This is one of the best-kept secrets on Wall Street, and for the next seven days, it’s open to you. This may be your only chance to see what it’s like on the inside, and put away cash like the big shots. Click here to collect your pass… ********************************* Stock Picking in the Far East For me, investing in China is a no brainer… We’re coming into a country while it’s still very early on in its growth phase. The economic picture is improving each month. And the companies don’t have to be terribly innovative in order to profit — all they really need to do is take a page from the playbooks of their Western counterparts and they have an instant recipe for success. So when I look for individual stocks to buy, I try to take a top-down approach. First I try to identify the most rapidly growing markets on a global scale — that’s how we got to China in the first place. Then I try to find the hottest sectors in these markets. Right now, I think you’d have to agree that the hottest sectors in China are commodities and technology. From there I try to find the sectors that I know the most about — in this case, it’s going to be technology (in particular, wireless technology). And finally I try to find the strongest companies within that sector. Then all you have to do is make sure you’re buying the stock at a reasonable price and from there it’s like shooting fish in a barrel! So now that the stage has been set — we’re looking for the strongest wireless companies in China — we can discuss the one stock I think could show long-term oriented shareholders some very handsome profits for many years to come. And that stock, my friend, is China Mobile (CHL: NYSE). Here’s the quick n’ dirty:
The bottom line: The wireless penetration rate in China will continue to increase and China Mobile will likely be the company most people will be using. That means BILLIONS of dollars in recurring subscription and services revenue for China Mobile — and some serious profits for shareholders. While the rest of the market in China has done well over the last 12 months (up roughly 45%) China Mobile did even better than that, rising almost 90% in the same period! ********************************* The Secret $2.9 Trillion “Wealth Recovery” Fund That Can Help Save Your Retirement As you read this, a secret $2.9 trillion government-backed “investment fund” could erase the “retirement worries” of millions of weary investors... Creating what could be the most persistent and reliable market boom in a decade... Hold the right shares and you could get very rich... Find out what they are here… ********************************* What About the Price? Great question! China Mobile’s closest competitor, China Unicom (CHU: NYSE), has a P/E of about 40. China Mobile’s is approximately 33. That means, relative to its peer, China Mobile is trading at a serious discount given how much larger and more successful the company is. The stock is 15% off of its October/November high and to me that smells like a buying opportunity. So for those who are looking for some long-term exposure to one of the strongest companies in the hottest sectors of the fastest growing market in the world, then China Mobile is the place to be! Click here to share some of your long-term stock picks in China, too! Sincerely, Editor’s Note: While China Mobile isn’t quite a penny stock, Wayne still sees some upside there. But obviously, it’s more difficult for that company to double in size as opposed to the two we just worked out in our latest issue of Penny Stock Fortunes. Gunner and I tackle a pair of companies that are set to beat the likes of Glaxo Smith Klein and Johnson & Johnson. To get on the list so you receive these the minute they come out, you need to read this now… |
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