I've just returned from the World Money Show, where some 10,000+ investors gathered to learn about global investing. I had a chance to meet with many of the advisors who were featured at the show, and I have been highlighting some of their favorite investment ideas. To view all of the stocks featured in this special global report, click here.
"As it feverishly prepares for the 2008 Olympics -- the biggest coming out party for a country in history -- China appears ready to take its place in the global economic elite," notes international investing expert Nick Vardy.
The London-based money manager and editor of The Global Bull Market Alert sees opportunity in Shanghai-headquartered, Home Inns & Hotels Management (NASDAQ:HMIN).
He explains, "Operating exclusively in China's fast-growth markets, Home Inn has become China's top budget hotel chain virtually overnight. And with the Olympic games putting China firmly on the global tourism map, Home Inns also offers U.S. investors the best way to profit directly from the massive demand for hotel rooms in China by foreigners.
"Incorporated in 2002, Home Inns has a head start in China that gives the company a huge first-mover advantage in a sector with vast potential. Domestic Chinese travel jumped almost 75% from 1995 to 2004, with travel spending growing to $66.1 billion. Home Inns already operates 134 hotels across China, opening 27 hotels in the fourth quarter of 2006 alone.
"An additional 48 hotels are already under contract. With operations in 39 cities, and having its pick of prime, underserved markets with strong population and economic growth, Home Inns is particularly well-positioned to take advantage of China's potential moving ahead.
"As always, with China, the numbers cannot but fail to impress. The occupancy rates of Home Inns are among the highest in the world, ranging between 94% and 98% -- compared with 67% to 69% for hotel operators in the United States.
"In the third quarter, Home Inns posted earnings of 9 cents per American depositary share, up 350% from a year earlier. Revenues hit $19.2 million, up 112% from a year ago. The company expects revenues between $20.5 million to $22.5 million in the fourth quarter.
"Of course, the question in everyone's mind is, how big can Home Inns get? Investment bank Deutsche Bank thinks Home Inns can easily triple its hotel portfolio over the next 24 months.
"With China's growing business travel and tourism able to support about 1,500 chain budget hotels, the upside is still huge. Indeed, with only one serious domestic competitor, Home Inns may be able to continue its current triple-digit percentage growth rates well into the next decade.
"With this kind of potential, Home Inns is not a cheap stock. But remember, the company is expected to grow at triple-digit percentage rates for the next two or three years. And the stock combines the tremendous momentum of a short-term trading play, with a serious long-term investment opportunity in a particularly dynamic sector in China."
Steven Halpern's TheStockAdvisors.com provides a free, daily overview of the latest stock ideas from the nation's leading financial newsletters.
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