Below is a Bloomberg stock screen of Chinese companies listed on the Singapore
Stock Exchange. These companies are known as the S-Chips. The stocks listed
in the table have Wall Street analyst estimates for 2010. While the market
caps are relatively low, they would be much higher if the stocks were revalued
to PE multiples of even half of those seen around the world.
We do not recommend buying all or any of these shares, but we do suggest that
each stock be valued both on its own merits and relative to other equities
trading around the world. Some of these companies are struggling (such as Caterpillar
in the US which is trading at 20X earnings), but, on the other hand, some are
amazing growth stories.
One of the reasons that the S-Chips are so cheap relative to other equities
around the world is that in the past a few of them were associated with scandal.
We argue that it is impossible for all of the S-Chips to be fraudulent and
encourage investors to analyze them because they may be some of the world's
greatest stock values. For example, China Sports is trading at net cash and
2.6X earnings compared to its much larger competitor Li Ning that trades in
Hong Kong at 20X earnings. Could the consumer environment for shoes and sporting
apparel be so different for these two companies? Maybe, but it is definitely
worth the effort to figure it out.
Continental Capital Advisors, LLC was formed to offset the destruction of
wealth caused by the global devaluation of currencies by central banks. The
name Continental Capital symbolizes the 1775 US Currency, "the Continental",
which was backed by nothing and quickly became devalued.
Disclaimer: The above is a matter of opinion and is not intended as
investment advice. Comments within the text should not be construed as specific
recommendations to buy or sell securities. Individuals should consult with
their broker and personal financial advisors before engaging in any trading
activities. Certain statements included herein may constitute "forward-looking
statements" with the meaning of certain securities legislative measures. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of the above mentioned companies, and / or industry results, to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Any action taken as a result of
reading this is solely the responsibility of the reader.
Continental Capital Advisors, LLC was formed to offset the destruction of
wealth caused by the global devaluation of currencies by central banks. The
name Continental Capital symbolizes the 1775 US Currency, "the Continental",
which was backed by nothing and quickly became devalued.
Disclaimer: The above is a matter of opinion and is not intended as
investment advice. Comments within the text should not be construed as specific
recommendations to buy or sell securities. Individuals should consult with
their broker and personal financial advisors before engaging in any trading
activities. Certain statements included herein may constitute "forward-looking
statements" with the meaning of certain securities legislative measures. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of the above mentioned companies, and / or industry results, to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Any action taken as a result of
reading this is solely the responsibility of the reader.
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