The sort of financial information we all take for granted in the west is not quite so universally available in China. A leader in the business of correcting that condition is headquartered in Beijing.
China Finance Online (NASDAQ: JRJC) provides online financial data and analytics to customers in the People's Republic of China. The firm serves individual users and institutional clients with subscription-based packages that integrate financial and listed company information from multiple sources. Users can obtain financial news, research reports, real-time stock quotes and historical financial information for China's listed stocks, bonds and mutual funds. Database operations include search, retrieval, delivery, storage and analysis functions.
The stock popped in late September and early October on several instances of positive analyst commentary, word of a financial database development agreement with Tsinghua University, and a company announcement of favorable guidance. Management expected Q3 revenues of $7.1-7.5 million, versus prior guidance of $6.7-7.1 million and Street consensus of $6.75 million. The firm also anticipated FY08 revenues of $45-51 million, versus consensus of $40.87 million.
Following the gain, shares have been defining a bullish "pennant" consolidation pattern. Equities frequently leave pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the issue with one "buy", one "hold" and one "sell". The JRJC Sales Growth rate (42.50%) and EPS Growth rate (300.00%) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 2% of the outstanding shares. Over the past 52 weeks, the stock has traded between $3.95 and $47.68. A stop-loss of $32.80 looks good here. Note that the company is next expected to report quarterly results in late November.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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